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 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.
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.