When you opt for Original Medicare (Parts A & B) after you turn 65, a Medicare Supplement insurance plan is a vital piece of the insurance puzzle, filling the financial gaps that Medicare leaves you with. Now new rules mean you’ll be hearing more about one plan in particular: Medicare Supplement Plan G.
A Medicare Supplement plan is offered by private insurance companies and supplements the federal Medicare program covered services. You sign up for Original Medicare through the Social Security office, but you purchase a Medicare Supplement plan from a licensed insurance agent.
That’s because today’s most popular Medicare Supplement option, Plan F, will close its doors soon. As of 2020, insurers will no longer offer it to new enrollees. If you already have a Plan F policy, you can keep it. But premiums may rise more quickly as younger and healthier people aren’t added to the roles.
Once Plan F is unavailable for new sign-ups at the end of this year, the most comprehensive Medicare Supplement policy for first-time enrollees will be Plan G. Experts expect it to become even more popular than it is now.
Here’s what you need to know about this coverage, how your plan choices are changing, and what your best moves are to protect your finances against crippling healthcare costs now and in the future.
Why a Medicare Supplement plan is crucial
Original Medicare pays for only the first 80% of your doctor and hospital bills. A Medicare Supplement plan, commonly called a Medicare Supplement policy, picks up much of the slack, helping you cover out-of-pocket costs such as copayments, coinsurance, and deductibles.
Currently there are 10 standardized varieties of Medicare Supplement plans, all going by letters of the alphabet (A, B, and so on). These policies are sold by private insurers. All plans with the same letter offer the same coverage in most states (the exceptions are Massachusetts, Minnesota, and Wisconsin), though premiums vary by insurer. You can use this tool to compare prices.
You can use your Medicare Supplement insurance with any doctor that takes Medicare, anywhere in the country.
Why Plans F and G are the gold standard
Of the 10 available Medigap plans, Plans F and G offer the richest coverage.
The only difference between Plan F and Plan G now is that Plan F covers the Medicare Part B deductible amount, which is $198 in 2019. Plan F, which typically has higher premiums than Plan G, is currently the most popular plan, chosen by nearly 60% of Medicare recipients.
Medicare Supplement Plan G, like Plan F, offers generous benefits, including:
- Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
- Medicare Part B coinsurance or copayment
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part A deductible ($1,408 in 2019)
- Medicare Part B excess charges
- 80% of foreign travel emergency (up to plan limits)
So once you’ve hit your Part B deductible of $198 this calendar year, a Medicare Supplement Plan G covers 100% of your Part B expenses. Original Medicare covers 80% of a Medicare beneficiaries Part B expenses and the remaining 20% counts against your deductible.
Certain preventive services, like mammograms, cancer screenings, and flu shots, are already fully covered under Part B. As long as you go to a doctor that accepts Medicare, you’ll face no copays or coinsurance, even without a Medicare Supplement plan.
No Medicare Supplement plan, however, provides prescription drug, vision, or dental coverage. Nor do any pay for long-term care or private duty nursing.
How Medicare Supplement Plan G curbs excesses
Medicare Supplement Plans F and G offer another valuable benefit: They are the only two plans that provide coverage for Medicare Part B excess charges, which occur when a doctor bills you for more than the Medicare approved amount for a specific service.
While fairly uncommon, Medicare Part B excess charges can add up quickly. Medicare places no limits on your out-of-pocket spending.
Even if none of your current doctors bills for Medicare Part B excess charges, it’s worth considering whether doctors or hospitals that you want to use in the future might.
How to find the best price on Plan G
While the coverage provided by all Medicare Supplement Plan G policies are exactly the same, the premiums can vary by thousands of dollars. Since it’s common to pick one plan and stick with it, selecting an expensive Medicare Supplement plan at the outset could add up to an extremely costly mistake over the course of your retirement.
The premiums for Plan G policies are typically lower than what you’ll pay for Plan F. However, it’s unclear how rates for Plan G will change if the plans see a large influx of new participants.
You purchase a Medicare Supplement Plan G from a private insurer, either directly or via a broker. You pay monthly premiums to the insurer, separately from your $135.50 monthly Medicare Part B insurance premiums.
Why else you might want a Medicare Supplement policy
Medicare Supplement Plan G is just one of the Medigap plans available. It’s important to compare Medigap plans and choose the option that’s best for your healthcare needs (now and down the road) and your budget.
Anyone who has Original Medicare is eligible to buy a Medigap plan. You cannot however buy a Medigap plan if you have a Medicare Advantage plan.
Beneficiaries who went without a Medicare Supplement or Medicare Advantage plan spent an average of $5,374 on out-of-pocket costs in 2016, according to a study by the Commonwealth Fund, more than twice what those with a supplementary plan spent.
The best time to purchase a Medicare Supplement plan is during your personal initial enrollment period. Initial enrollment period is the first six months after you’re both 65 years old and enrolled in Medicare Part B. The typical enrollee will coordinate their Medigap policy to begin on the month they turn 65.
You can still buy a Plan G later, but you may have to go through medical underwriting. Underwriting could mean higher premiums or having a pre-existing condition not covered.
You cannot have a Medicare Supplement Plan G with Medicare Advantage.
Medicare Advantage (Part C) is a private alternative to replace Original Medicare (Parts A & B) and typically offers additional benefits. Medicare Advantage plans often limit your coverage to a particular network of healthcare providers. Plans that allow you to see out-of-network providers typically charge you more.
You must be enrolled in Medicare Parts A & B to be eligible to apply for a Medicare Advantage plan.
You may pay a premium for your Medicare Advantage plan, in addition to your Part B premium. To be clear, you will still need to pay your Part B premium.
Medicare Part G
Medicare Part G does not exist.
- Medicare Part A is the hospital insurance portion of Original Medicare
- Medicare Part B is the medical insurance portion of Original Medicare
- Medicare Part C is Medicare Advantage. Medicare Advantage is an alternative to Original Medicare (Parts A & B) that is offered by private insurers
- Medicare Part D is Prescription Drug Plans (PDP)
- Medigap Plan G is one of the 10 standardized Medicare Supplement insurance plans
Shop for Medicare Supplement Plan G
Look at Medicare Supplement Plan G prices with no obligation. Enter your zip code, birthdate, gender and tobacco status to get the most accurate prices. Or, shoot us an email at [email protected], or speak with a licensed insurance agent by calling 917-408-3690.
High Deductible Plan G
There is a high deductible version of Medicare Plan G. It offers the same benefits as the stand Plan G after you fulfill a deductible of $2,340.