First-dollar Medigap coverage is when a Medicare Supplement insurance plan covers both the Medicare Part A and Medicare Part B deductible. With first-dollar plans, policyholders don’t have to pay these deductibles before their Medicare coverage kicks in.

Medigap plans C and F are the only plans with first-dollar Medigap coverage in the states that offer standardized plans. These two Medigap plans also provide extensive coverage for other Medicare out-of-pocket costs including co-insurance and co-payments.

The Medigap benefits chart below shows which benefits are covered by Plans C and F.

Medicare Supplement benefits C F
Part A hospital care co-insurance & costs
Part A hospice care co-insurance or co-payment
Part B co-insurance or co-payment
First 3 pints of blood
Part A deductible
Part A skilled nursing care co-insurance
Part B deductible
Part B excess charges
Foreign travel emergency

First-dollar plans are popular

First-dollar plans are the most popular Medigap plans available.

About 10.2 million people were enrolled in a Medicare Supplement insurance plan in 2012, according to a report from America’s Health Insurance Plans (AHIP). More than 6 out of every 10 Medigap policyholders had either Plan F or Plan C.

Plan F had 5.1 million enrollees in 2012, according to AHIP. Plan C had 1.2 million enrollees during the same period.

Proposals to limit first-dollar plans

Despite the overall popularity of first-dollar plans, lawmakers tried to limit first-dollar coverage provided by Plan C and Plan F several years ago.

The Affordable Care Act (ACA) required that the National Association of Insurance Commissioners (NAIC) review Medigap Plans C and F to ensure that physicians’ services are not being abused.

The NAIC responded that it did not find evidence for this claim, and no changes were made to Medigap Plans C or F. Our article on how Obamacare affects Medigap has more information on the proposed changes.