Although Original Medicare provides excellent coverage, for many Medicare Supplement Plans (also known as Medigap plans) are needed to bridge coverage gaps. There are quite a few options, but the most popular Medicare Supplement Plans are Plan F, Plan G, & Plan N.
Do I Need a Supplement Plan?
First, you need to understand what is covered by Original Medicare. Medicare Part A helps to cover hospital insurance. It will help cover:
- Inpatient care in a hospital
- Nursing facility care
- Nursing home care
- Hospice care
- Home health Care
Medicare Part B helps to cover your outpatient insurance. These are namely medically necessary services and preventative services. Medicare Part B will help cover:
- Doctors visits
- Mental health services
- Outpatient surgery
- Ambulance services
- Durable medical equipment, like wheelchairs or walkers
- Limited outpatient prescription drugs such as:
- Injections you get in a doctor’s office
- Certain oral cancer drugs
- Drugs used with some types of durable medical equipment—like a nebulizer
- Clinical research such as limited drugs, procedures, and services
Although many basic services are covered, Medicare Parts A & B only cover up to 80% of the costs for hospital visits and doctor visits. This leaves you footing the bill for the remaining 20%. This may not seem like a lot at first glance, with with surgical procedures ranging in the tens of thousands, you could wind up with a hefty out of pocket bill! Therefore, we highly recommend that our clients purchase a supplement plan to enhance their coverage. Additionally, neither Original Medicare nor Medicare Supplement Plans cover prescription drugs. For prescription drug coverage, you would need either Medicare Part D or Medicare Advantage.
Medicare Supplement Plan F
Until recently, Medicare Supplement F has been one of the most popular plans because it offers the most comprehensive coverage with a zero deductible. It’s probably the plan that you are the most familiar with. You may not know that there are other options that work just as well (if not better!) Additionally, due to recent changes, Plan F is only available to those whose Medicare Part A started prior to 2020. However, if you are currently on Plan F, and you love it, Medicare will not require you to change. But, be advised, without new enrollees added to the plan, it is expected that the rates will continue to increase. For this reason, you may want to consider alternative options.
Plan F Pros & Cons
Plan F is your most comprehensive coverage with an absolute zero deductible. It will cover 100% of your medical costs (except for prescriptions. For more information about prescription coverage, click here). Additionally, with Medicare Supplement Plan F, there is no medical underwriting. So, you cannot be denied.
However, with the positives, come some major drawbacks. Your monthly premium with Plan F will be much higher than other plans. These rates will only continue to increase with time. If later down the line, the rates become financially impossible or even just uncomfortable, it may be more difficult to switch to another plan. For that reason, we encourage clients to compare the savings with a Plan G now while you are still healthy.
Medicare Supplement Plan G
While Plan F may be the most comprehensive Medigap plan, it’s also the most expensive, and for that reason, more people are choosing Plan G to save money without sacrificing benefits.
As of 2020, plan G will be the most comprehensive coverage available to new Medicare Beneficiaries. If you had planned to enroll in Plan F, please do not worry. Plan G is exactly the same as Plan F except the deductible is $198 per year instead of the $0 deductible of Plan F. Because monthly premiums with Plan G are usually much lower than with Plan F, Plan G is actually more cost-effective.
With both Plan F and Plan G, you have the option to enroll in the High Deductible version which has lower monthly premiums. It may behoove you to do so if your monthly medical expenses are very low, you don’t have many doctor visits and you are in very good health. BUT the yearly deductible is $2,340, so you really want to consider carefully if this plan is worth the increased out of pocket.
Plan G Pros & Cons
When you consider the how minor the $198 deductible is compared with the monthly savings offered by Plan G, it is easy to see its appeal. Additionally, Medicare Supplement Plan G has additional cost saving benefits. Not only are the monthly premiums lower than Plan F, but they tend to increase at a slower rate. Lower, more stable premiums is definitely a good thing! However, Plan G may require medical underwriting. This means you can be denied. If you’re still healthy enough to switch, you can lock in those Plan G savings for years to come. If you wait several years to switch to Plan G, you may have developed a pre-existing condition possibly making you ineligible.
Medicare Supplement Plan N
Plan N is another popular option. At first glance, plan N seems very similar to plan G with the exception of the Medicare Part B Excess Charges and a few copays. So, Plan N offers all the same coverage with the same $198 deductible. With Plan N, the copays are up to $20 at the doctor and up to $50 at a hospital -rather minimal.
But what are Medicare Part B Excess Charges? Basically, a provider may choose to accept Medicare’s payment of services or charge up to 15% more than what is covered. With Plan N, you are responsible for these charges. And no one likes an unexpected bill. However, if you are willing to do a little research and are on a very tight monthly budget, Plan N may be worth consideration.
Plan N Pros & Cons
Although there are excess charges, many doctors accept what is covered under Medicare Part B. You can call ahead to determine if they accept it or simply go to medicare.gov. Additionally, if you are open to changing providers and are willing to do a little research, you can save quite a bit on monthly premiums with Plan N. However, you should exercise caution. Sometimes we just do not have the advance notice or ability to choose a provider. For example, many Centers of Excellence have excess charges beyond medicare, and should you find yourself needing to utilize these facilities, your bills could really begin to stack up.
Make Sure to Shop Around!
Medicare supplements are are standardized. This means that you will receive the same coverage regardless of the insurance company that you choose. The coverage is determined by the plan, not the carrier. Despite this, there are a wide range of prices based on the insurance company you choose. A more expensive company does not mean better coverage. This is why we encourage you to use the free services of a broker who can help, not only to pick the best plan for you but provide quotes for multiple insurance companies. The company you pick is almost as important as the plan you pick! If you pick the wrong one, you can end up paying too much for the same coverage. Additionally, with an unstable carrier, your rates could jump up exponentially from one year to another! And, let’s face it, some companies just have better customer service than others and are easier to deal with.
- Prices are fixed by law, so you pay the same price whether you use an agent, a broker, or by calling the company directly.
- When you use a broker, you have an impartial 3rd party to help you navigate between carriers. That broker works for you, not the insurance company. If you call the company directly, you lose that third party because that agent you speak to works for the insurance company, not you.
Also, remember, if your doctor accepts Medicare, then he or she will accept your supplement, regardless of the insurance company you choose.
If you have any more questions about Medicare Supplement Plans, please fee free to contact iHlealthBrokers at (888) 918-0518 or schedule a call today!
Also, make sure to check out our video below for more info on Medicare Supplement Plans.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
