Medicare Supplement insurance, also known as Medigap, presents a wide array of options to choose from. Medigap Plan F is one of the most popular, since it covers all the possible out-of-pocket costs from Original Medicare.

However, it doesn't make sense for everyone, especially because of its limited eligibility rules. Here's how this plan stacks up against your other choices.

What Is Medicare Supplement Insurance?

Medicare Supplement insurance is private health insurance that can supplement Original Medicare (Parts A and B). While Medicare covers most of your health care expenses, you could still be responsible for some sizable costs such as deductibles, co-payments and coinsurance. Under Medicare Part B, for example, you're responsible for 20% of your doctor bills as coinsurance. If you need surgery or other serious medical care in retirement, this can leave you with large medical bills.

Rather than risking a surprise bill, you could buy a Medigap plan to cover these costs in exchange for a monthly premium. However, Medigap coverage varies widely: Including Medigap Plan F, there are currently 10 plans on the market today, labeled with letters A through N.

What Does Medigap Plan F Cover?

Medigap Plan F is the most comprehensive type of Medicare Supplement insurance plan, because it covers every cost on the Medicare benefits list. This includes:

• Medicare Part A coinsurance costs for hospital stays as well as coverage for an additional 365 days beyond what Medicare provides.
• Medicare Part B coinsurance costs for doctor services.
• Blood (first three pints).
• Part A and Part B deductibles.
• Coinsurance costs for approved hospice and skilled nursing facility care.
• Part B excess charges, which occur if a doctor charges more than the Medicare-approved amount.
• Health care in a foreign country.

When you have Plan F, you are as protected as possible against possible Medicare charges. This can be very appealing; other Medigap options do not include as much. For example, Medigap Plan A still requires you to pay the Medicare Part A deductible ($1,484 for entry into a hospital) and will not cover health care in a foreign country.

Who Is Eligible for Medigap Plan F?

You can only purchase a Medigap Plan F if you qualified for Medicare before 2020. Most people qualify for Medicare when they turn 65 — so, if you aren't yet 65 or you turned 65 after January 1, 2020, then you cannot buy Plan F under the current rules.

If you're blocked out, you might find a suitable alternative in Medigap Plan G. This covers nearly everything Plan F does; the only difference is that Plan G will not cover the Medicare Part B deductible, which is $203 per year in 2021. Otherwise, the coverage is identical.

Even if you meet the eligibility standards for Plan F, you aren't guaranteed to qualify. The decision ultimately lies with the health insurance company selling the plan. For instance, they could require medical underwriting, meaning that certain health issues may prevent you from enrolling. When people first qualify for Medicare, they enter a guaranteed sign-up period. However, people eligible for Plan F are past this point, which is why medical underwriting applies.

How Does Plan F Compare to Other Medigap Plans?

Plan F offers more coverage than any other Medigap plan — exactly how much more depends on which plan you compare it against. Plan G is very similar, covering the same Medicare out-of-pocket costs with the exception of the Medicare Part B deductible of $203 per year.

Others, such as plans C and D, also offer a high amount of coverage with only a few extra expenses compared to Plan F. On the other hand, plans K and L have significantly more out-of-pocket expenses. For example, Plan K asks you to pay 50% of most Medicare charges (although the most you could owe out of pocket in a year is capped at $6,220 for 2021).

Plans that offer less coverage usually cost less per month. Your specific premium will depend on your area and your insurer; in New York, Plan K costs typically between $63 to $115 a month, whereas Plan F runs from about $200 to $500 a month, according to the New York State Department of Financial Services.

How Does It Compare With Medicare Advantage?

Apart from Medicare Supplement insurance, another way to cover your health care expenses is through a Medicare Advantage plan. Rather than combining with Original Medicare, Medicare Advantage is a separate program also known as Medicare Part C. When you sign up, a private insurance company is completely in charge of covering your health care bills according to the plan terms.

The government regulates Medicare Advantage plans, so they must offer coverage that's similar to Medicare. However, what you get from a Medicare Advantage plan will depend on the insurance company. It's common for these plans to charge a lower premium than Medicare Supplement plans would, but they have higher out-of-pocket costs, especially compared with Plan F.

Medicare Advantage plans may carry extra benefits such as prescription drugs, gym memberships, dental and vision care — all things you wouldn't find on a Medigap plan. On the other hand, Medicare Advantage plans may use a more restricted provider network like an HMO that does not include your doctor.

To summarize, a Medigap Plan F usually charges higher premiums but offers more coverage and has a larger provider network; Medicare Advantage typically charges a lower premium and may include extra benefits, but it could have higher out-of-pocket costs and smaller provider networks.

Is Medigap Plan F the Right Choice?

Before deciding if Plan F makes sense for you, determine whether you can buy one in the first place. If you aren't 65 yet or turned 65 only after January 1, 2020, you wouldn't be able to buy this plan under the current federal rules. In this case, Medigap Plan G may be similar enough to serve your needs.

If you turned 65 before 2020, consider Plan F. Its main advantage is that it covers the most Medicare costs out of all available plans. This can make your retirement budget more predictable, because you pay only one monthly premium and do not have to worry about out-of-pocket costs. The premiums can be higher than those of other Medigap plans, though, making this a good option for those willing to pay a larger premium in return for cutting out surprise bills.

If you are in good health and prefer to pay a lower premium, other Medigap plans such as Plan K charge less per month. However, if you need health care, the out-of-pocket costs can add up quickly. Medicare Advantage is another affordable alternative to Plan F, provided you are OK with the potential downsides: more restricted provider networks and higher out-of-pocket costs.

As you weigh your choices, consider meeting with a health insurance specialist. They can walk you through all the different options and help you decide which plan best fits your retirement health care needs.