If you are near (or already) eligible for Medicare, you might be wondering about your Medigap options. You should consider Medicare Supplement Plan G as a choice for straightforward and affordable coverage.
It’s one of the most comprehensive plans available. It also offers good value when compared to other plans like F and N. The premium increases tend to be less with Plan G and your yearly out-of-pocket exposure is always known.
Medicare Plan G vs Plan F & N
As an independent broker, I found that many Medicare-eligible consumers leaned towards Plan F before 2020. Now they are deciding between Plans G and N most often.
Plan F covers all gaps in Medicare Parts A & B. So long as your medical care is a Medicare-approved expense, it will fill in all of the gaps. And Plan N has copays and does not cover Part B Excess Charges. Are these two (where available) better choices than Plan G?
Here is my review:
Is Plan G a Good Choice for Medigap Coverage?
What are the best arguments for Plan G Medicare supplement insurance? First, it’s important to know Plan G fills in all gaps in Medicare Parts A & B except for one. Plan G does not cover the Part B deductible.
The Medicare Part B deductible is $233 for 2022 – $30 more than when it was $203 in 2021. This is the largest year over year increase thus far, but still quite manageable. The increase can be explained by rising inflation metrics in the U.S.
For reference, the amount was $198, in 2020, $185 in 2019, $183 for 2017-18 and $166 in 2016. For years 2013-15, the amount was $147. It’s regulated and therefore does not increase much each year.
The deductible changes each year when officials at CMS (Centers for Medicare & Medicaid Services) announce new cost sharing amounts. So Plan F covers the one-time, yearly Part B deductible and Plan G does not. That is the only difference between the two. Plan N does not cover the Part B deductible either.
Medicare eligible consumers should consider Plan G for a couple of reasons. The first reason is simply cost. As you price Medicare supplements from the vast number of insurance carriers, you will see Plan G is over $25 less per month than Plan F in many cases. (And it’s not always much more expensive than Plan N.)
When you take $25 and multiply it by the 12 months in a year, you come up with $300. So why spend an extra $300 more per year in Plan F premiums to cover a $233 deductible? The math does not add up. You are saving money with Plan G over Plan F. And it’s one of the most comprehensive medicare supplements available.
Watch Our Video to Learn More about the Advantages of Plan G
What About The Annual Medicare Part B Deductible?
This all begs the question: What happens if CMS raises the Part B deductible well above $233? What if they decide to increase it to $500 or even $1000?
First, you should know Part B deductible increases are tied to inflation. So unless the rules change or inflation increases significantly, the deductible would only increase incrementally each year. This has always been the case.
In the unlikely event the Part B deductible increases significantly, Plan F premiums will increase in kind as it must cover this gap. Insurance companies will not absorb the increased cost should it occur. They will pass it on to policyholders.
One way or another you’re paying for it – either in the way of higher premiums or by meeting the deductible. With Plan G you are in more control and will almost always save money through lower premiums. That’s why it is a good Medicare supplement plan. Medicare supplement plans are worth the cost in many cases.
Plan G Is Now A “Guaranteed Issue” Medicare Supplement
Medicare changed the rules in 2020. Plan F is no longer available for those new to Medicare beginning January 1. See more on that below.
This means that like Plan F before, Plan G is now offered on a guaranteed issue basis for different reasons. This would be one argument against Plan G. Guaranteed Issue plans tend to increase in price more quickly because they are forced to accept consumers who may have health conditions. This drives up claims and in-turn increases premiums for all who are enrolled.
Plan N (same as before) is not a guaranteed issue policy. Thus, insurance companies can be more selective in who they accept for this plan. Medical underwriting will determine who qualifies.
With (perhaps) less unhealthy enrollees in a plan, there will be less claims. Rates will increase more slowly. It was not unusual to see Plan F rates go up more quickly in the past. Now that Plan G is a guaranteed issue policy (when applicable), we expect to see monthly premiums increase more quickly than with a Plan N Medicare supplement.
Some Medicare Supplements Discontinued In 2020
Yes, it’s true. Any plan covering the Part B deductible is no longer offered to those gaining Medicare eligibility starting in January 2020. Those who were eligible for Medicare before 2020 can keep their existing coverage, however. The three policies affected are Plans F, C, and High Deductible F.
What does this mean? In practice, discontinued blocks of business will trend older and perhaps unhealthier. And rates may increase more dramatically because of this. When rates go up, consumers shop. Those who are healthy enough to find new coverage (like Plan G, N or High Deductible G) will likely find new coverage, further exacerbating the problem. This happened with Plan J in 2010 when it was discontinued.
That’s why you see a lot of companies introducing Plan G to their portfolio. United Healthcare (AARP branded) and Anthem Blue Cross and Blue Shield now offer Plan G in Ohio and several others states.
High Deductible Plan G Is Now Available
Since the High Deductible Plan F rules have changed, High Deductible Plan G is the new option for those new to Medicare in 2020 and beyond. This policy is available to all Medicare beneficiaries both new and old. The plan is interesting as it has essentially two deductibles. The normal $2,490 High Deductible annual amount as well as the Part B deductible.
Will the Part B deductible also count towards the normal $2,490 plus high deductible? In most cases, yes it will. So you will likely only have to meet one. If, however, you met the high deductible with only Part A expenses, then you would still be responsible for the Part B amount.
It would be very rare for a situation like this to occur, but it’s something to be aware of. High Deductible Plan G is gaining traction. More companies now offer this choice. Premiums are very low and you can see any doctor or hospital that accepts Medicare.
Contact Us To Compare Plan G Medicare Supplement Quotes
In summary, when shopping for Medicare supplement insurance and comparing benefits, plans and prices – Medicare Plan G should be on your list. The premium difference usually makes up for the Part B deductible and the smaller rate increases are helpful. Contact us to learn more about Medicare supplement plans!