Is Plan G Still the Best?

Plan G is the most comprehensive plan available to new Medicare enrollees. But is it the best?

Out of Pocket Costs

Medicare offers excellent coverage but there are a lot of out-of-pocket costs that people don’t take into consideration.

Original Medicare is broken up into Part A and Part B. There are separate out of pocket costs for each.

Part A will not usually have a monthly premium. There is, however, a deductible and copays or coinsurance. There is also no Out of Pocket Maximum. 

A deductible is the amount that you have to pay out of pocket before your insurance begins to contribute to the cost share. Part A is a little strange because it is not applied annually, but rather per benefit period.

For Part B, the deductible is applied once annually. In 2024, the Part B deductible is. $240.

Then there is coinsurance. For Part A your coinsurance is determined by the type of care facility and the length of care.

For Part B, your coinsurance is 20% of the Medicare approved amount. So if the Medicare approved amount for a given service treatment is $1000, your cost would be $200 (assuming you’ve already met your deductible).

Now, there is no out of pocket maximum for either Part A or Part B. An out of pocket maximum is basically a cap on your yearly medical spending. Once you’ve met this threshold, traditionally your health insurance carrier would be taken on the remainder of the bills for the in network covered services for the rest of the year.

So, you can see that these costs without an Out of Pocket Maximum can stack up. And that is where Medigap steps in. 

Comparing Medigap

There are 10 different plans to choose from with varying levels of coverage and varying price points.

Benefits are standardized. This means the benefits offered by Plan G will be the same regardless of who your carrier is. The only thing that would change is the price.

And remember, that if your doctor accepts Original Medicare, they accept your Medicare Supplement Plan, regardless of who the carrier is.

Prices

So, obviously Plan G is a great option. So, why wouldn’t you want one? Well, it boils down to the prices.

For example, the main differences between Plan N and Plan G are Part B excess charges and a few copays required by Plan N. If you could get a Plan N with a much lower monthly premium, that might offset some of these costs.

Run all of the numbers before choosing your plan comparing out of pocket costs and monthly premiums.

Rate Increases 

We used to often compare Plan F and Plan G in terms of value. That’s because the only real difference between these two plans is the Part B deductible. Plan F covers it. Plan G doesn’t. However, usually, when you compared the difference in costs for monthly premiums over a full year, Plan F would be more than $200 more expensive making Plan G the clear cut winner.

However, there was another reason to recommend Plan G over Plan F. 

Every year monthly premiums for Medigap (and health insurance in general) tend to increase to accommodate for rising healthcare costs and inflation. However, historically, Plan F rates increased at a more drastic rate than Plan G. Another point in Plan G’s favor.

However, now that Plan F is slowly being weeded out, Plan G rates may increase more drastically from year to year. So, Plan N might be a safer option. 

This is where working with a broker really comes into play. Brokers not only will be able to compare all of the rates for you more expediently than you having to call each individual carrier, but they also have experience working with these carriers year after year. So, a broker will be able to guide you not only the the least expensive options currently but the one most likely to increase a slower rate than the others.

And remember, with medical underwriting as a factor to take into consideration should you enroll outside of the initial six month window after you turn 65 and enroll in Part B, you need to be thinking long term.