Medigap Plan G can be a viable alternative to the most common Medigap plan, Plan F. While many people know about Medigap Plan F and its advantages, Plan G is often a better “deal” and is worth examining.
First of all, let’s look at how Medicare Supplement Plan G differs from Plan F. As you may or may not already know, Plan F is, in addition to being the most common Medigap plan, the most comprehensive plan. It pays everything that Medicare does not pay on Medicare-covered services and procedures. With Plan F, you have no out of pocket costs. Many people choose that route for the mere simplicity of not having out of pocket costs or receiving bills for medical care. However, the only difference in Plans G and F is the coverage of the Medicare Part B deductible, which Plan G does not cover. For 2014, that deductible is $147/year.
Since the deductible that Medicare Supplement Plan G does not cover is only $147/year, and that is the only difference in the two plans, it is easy to compare the two plans (F and G) on the basis of cost. The deductible amounts to a $12.25/month difference. So if the premium savings is greater than $12.25/month, then Medicare Supplement Plan G would represent an annual savings. With many companies, the premium difference is $15-25/month, which would result in an annual savings.
That is just the straight-forward dollar amount savings, but there are other advantages to ‘G’ that should be understood. First and foremost, Plan G is historically more rate-stable over time than Plan F is. The reason for this can be a little complex, but here is an explanation of it. Plan F is offered on a “guaranteed issue” basis in certain situations, such as losing employer coverage or losing Medicare Advantage coverage. In other words, if you have pre-existing conditions, you may be able to get a Plan F but not a Plan G if you fall into one of those “guaranteed issue” situations. Over time, this leads to the people on Plan F being (on average) less healthy than the people on Plan G. This leads to higher claims ratios on ‘F’ and larger rate increases.
In an example, a well-known, ‘A+’ rated insurance company recently had a rate increase in North Carolina of 8% on Plan F and 5% on Medicare Supplement Plan G. This mirrors similar results nationwide and symbolizes why ‘G’ can be a better choice. It represents, not only initial premium savings in many cases, but also greater long-term rate stability.
A further advantage of ‘G’ comes if you are comparing plans mid-year and are already on a Medicare Supplement plan. The Medicare Part B deductible does not reset if you change plans. It is tracked by Medicare on an annual basis. So if you have a Plan F and you have been to the doctor and met your deductible (your plan would have paid it if you have Plan F), and you decide to switch to a Medicare Supplement Plan G, you would not have to meet the deductible again. So the premium savings the rest of the year would be realized in net savings to you.
While many people do not take the time to understand the plans or the various options that are available on the different Medigap plans, it can definitely make sense to do so and result in money in your pocket. If you have questions about this or want to compare Medicare Supplement Plan G rates for your age and zip code, you can contact us online at Secure Medicare Solutions or call us at 877.506.3378.