Medigap Plan G can be a great alternative to the most common Medigap plan, Plan F.
Plan F is certainly the most discussed plan – in fact, some companies do not even offer Medigap Plan G, preferring to focus on Plan F and drive consumers towards that most comprehensive (and most expensive) option. Plan G is often discussed in comparison to Plan F since those are the two most commonly held plans – they make up about 75% of the Medigap market – and they are the two that many people choose to compare.
Medigap Plan G Premium Savings
Whereas Medigap Plan F covers everything that Medicare A and B do not cover at the doctor and hospital, Plan G covers all but the Medicare Part B deductible. This means that it covers the 20% coinsurance on Medicare Parts A & B and it covers the Medicare Part A deductible. Here is the chart that shows what the various plans cover: Standardized Medigap Plans Chart.
The deductible that Medigap Plan G does not cover, the Part B deductible, is only $185/year for 2019. So, the math on this is simple to do – if the premium savings realized on ‘G’ is greater than $15.42/month, you would come out ahead on Medigap Plan G over the course of a year. Now, some people do take in to account the “hassle” of being billed for charges that Medicare doesn’t cover (i.e. the Part B deductible), but overall, the savings on Medigap Plan G are apparent as long as there is $15.42/month difference in premiums between ‘F’ and ‘G’.
Often, the premium difference between the two plans is as much as $25-50/month, although this depends on the company, how they set their rates, where you live, and your specific age, gender and zip code.
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Rate Stability on Medigap Plan G
Another factor to consider when comparing Medigap Plan G and other plans like Plan F, in particular, is rate stability over time. Medigap Plan G, historically, has been more rate-stable over time than some other plans, including Plan F. This is due to “adverse selection” on the ‘F’ plan.
To further clarify, Plan F is offered on a “guaranteed issue” basis to people who are in certain situations including losing employer coverage, losing Medicare Advantage coverage, moving out of a plan’s service area, etc. Because health screening cannot be used in these situations and because the Federal Government mandates that insurance companies offer Plan F in these situations, there are, on average, healthier people on ‘G’ than there are on ‘F’. This can lead to fewer or smaller rate increases on Medigap Plan G.
Another consideration when it comes to Medigap Plan G is for people who already have a Medigap plan, particularly those who currently have a Plan F. If you have had your plan for a year or more, it is highly likely that you have had one or more rate increases from your current plan. If that is the case, it is almost certain that you can experience premium savings by switching to a lower-priced Plan F or a Medigap Plan G.
A final factor to consider, especially if comparing Medigap Plan G to Plan F, is that Plan F is ending for new consumers as of 1/1/2020. What this means is that Plan F will be “closed” to new/younger Medicare-eligible people. When this has happened in the past, rates on the “closed” blocks of business have gone up at a higher percentage than they have on plans that are still being sold. So, while Medigap Plan G has historically been more stable than Plan F, all signs point to that trend continuing, and potentially strengthening, in the future.
To find out if your Medigap rate is competitively priced or if you should entertain changing plans to lower your cost, you can contact us at 877.506.3378 or fill out a request online at Medigap Plan G quotes.
