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The Case For Plan G Medicare Supplement Insurance

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Plan G Medicare SupplementIf you are nearing (or already) eligible for Medicare, you should consider Plan G as your choice for supplemental insurance.

It’s one of the most comprehensive plans available, but it also offers good value when compared to other Medigap plans like F and N.

As a broker, I find that many Medicare eligible consumers lean towards Plan F as it’s the most comprehensive supplement available today.

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. You will have no out of pocket to worry about, but is it a better choice than Plan G?

Is Plan G a Better 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 Medicare Part B deductible – and that amount is $183 for 2018 – the same as it was in 2017. It was $166 in 2016. For years 2013-15, the amount was $147. It does not move much each year as it’s tied to inflation.

The deductible can change each year when officials at CMS (Centers for Medicare & Medicaid Services) announce the annual changes to Medicare. So Plan F covers the one-time, yearly Part B deductible and Plan G does not – that is the only difference between the two.

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 available, you will see in many instances Plan G can be over $20 less per month than Plan F in many cases.

When you take $20 and multiply it by the 12 months in a year, you come up with $240. So why spend an extra $240 more per year in Plan F premiums to cover a $183 deductible? It does not usually make financial sense to do so. You are saving money with Plan G over Plan F!

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: “Well, what happens if CMS raises the Part B deductible well above $183? What if they decide to increase it to $500 or even a $1000?

First, you should know that Part B deductible increases are tied to inflation metrics.  So unless the rules change, or inflation increases wildly, the deductible should only increase incrementally each year as it has in the past.

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 are not going to absorb this increased cost should it occur. They are going to pass it on to policyholders.

One way or another you will be paying for it – either in the way of increased monthly premiums or by meeting the deductible when accessing medical care.  At least with Plan G, you are in more control and will almost always save money in the way of lower premiums.

Plan G Is Not A “Guarantee Issue” Medicare Supplement

And that brings us to the next point:  Consumers should consider Plan G because of smaller rate increases. The primary reason for lower yearly increases is Plan G is not a “Guaranteed Issue” Medicare supplement plan.

The only time Plan G can be purchased without medical underwriting (in most states) is when you are new to Medicare Part B and in your open enrollment window. Otherwise you must answer several yes/no health questions, list your prescription usage, and take part in a phone interview.

Conversely, Plan F is a Guaranteed Issue plan. This simply means there are a lot more ways people can purchase this Medigap policy without medical underwriting. Examples of this would be people who are losing group coverage, leaving a Medicare Advantage plan before one year, or moving to a new service area.

Thus, there are usually less people in general (and less unhealthy people specifically) enrolled in Plan G. When there are less unhealthy people in a Medigap block of business, the corresponding insurance company will usually increase rates more slowly.

As a broker, I have seen this many times. An insurance company will announce new rates for Medicare supplement plans, and Plan G increases will be lower. I see Plan F rates go up by 7-10% and Plan G rates increase by 4-6% on average.

In fairness, not all insurance companies price their Medicare supplement business this way, but many do. Many carriers adjust their rates per each plan, but not by all plans as a whole. And because Plan G is not a Guaranteed Issue plan, typically the increases are smaller.  That practice can save Plan G members significantly over a several year time period.

Some Medicare Supplements Being Discontinued In 2020

Yes, its true. Any plan covering the Part B deductible will no longer be offered to those who are gaining Medicare eligibility starting in January 2020. Those who were eligible for Medicare before 2020 can keep theses plan – and even shop for new ones – but new members will not be able to buy one. (The three plans affected are; 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, D or N) will likely leave the pool, further exacerbating the problem. This happened with Plan J in 2010 when it went off the market.

That’s why you see a lot of companies introducing Plan G to their portfolio now. Just recently, United Healthcare (AARP branded) and Anthem Blue Cross and Blue Shield began offering Plan G in Ohio and several others states. These companies are a little behind the curve if you ask me, but better late than never.

High Deductible Plan G Will Soon Be Available

The changes coming in 2020 will introduce a new policy – High Deductible Plan G. This coverage will be available to all Medicare beneficiaries both new and old. This plan will be somewhat interesting as it will essentially have two deductibles. The normal $2,000+ one as well as the Part B deductible.

Will the Part B deductible also count towards the normal $2,000 plus high deductible? In most cases, yes it will. So you will likely only have to only 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. Once introduced, High Deductible Plan G will likely be a big seller. Premiums will be very low with this coverage and also allow the insured to 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 – Plan G should be on your list when considering comprehensive Medigap insurance. The premium difference can more than make up for the the Part B deductible and the lower rate increases will make you happier in the long run. Contact us to learn more!

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