With a popular plan going
away soon, an option called G is looking better and better
Beth Braverman | October 16, 2018
When you opt
for Original Medicare (Parts A & B) after
you turn 65, a Medicare Supplement plan
is a vital piece of the insurance puzzle, filling the gaps that Medicare leaves
you with. Now new rules mean you’ll be hearing more about one plan in
particular: Medicare Supplement Plan G.
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 in just over a year, the most comprehensive
Medicare Supplement policy for first-time enrollees will be Plan G—and 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 Medigap 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,
and 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 your
Medigap insurance with any doctor that takes Medicare, anywhere in the country.
(To make sure a doctor accepts Medicare—more than 90% do—use Medicare’s Physician Compare tool.)
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 deductible,
which is $183 in 2018, $185 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:
·
Medicare
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 ($1,340 in 2018)
·
Medicare
Part B excess charges
·
80%
of foreign travel emergency (up to plan limits)
So once you’ve hit
your Plan B deductible of $183 this year and $185 in 2019, a Medigap Plan G
covers all of your doctor and hospital bills.
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 Medigap 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 what Medicare has agreed to pay for a
specific service.
While fairly
uncommon, Medicare Part B excess charges can add up quickly, and 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
While the coverage
provided by all Medigap 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 Medigap 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, though it’s
unclear how rates for Plan G will change if the plans see a large influx of new
participants.
You purchase a
Medigap Plan G from a private insurer, either directly or via a broker. You pay
monthly premiums to the insurer, separately from your $134 monthly Medicare
Part B insurance premiums ($135.50 in 2019).
Selecting an expensive Medigap plan at
the outset could add up to an extremely costly mistake over the course of your
retirement.
You can compare
Medigap Plan G policies via the Medicare website or
request a Medigap rate comparison shopping guide from your State
Health Insurance Assistance Program.
Note that Medigap
policies only cover individuals. If you and your spouse both want coverage,
you’ll need to purchase two separate plans. Some insurers will offer you a 5%
discount for bundling two plans together.
When to shop for a
plan
You can buy a
Medicare Supplement plan during a six-month open enrollment period that
starts the first day of the month you’re both 65 or older and enrolled in
Medicare Part B (hospital insurance).
You can buy a policy
later—say you want to switch into Medigap from employer-based benefits or a
Medicare Advantage plan—but in most cases outside of your open enrollment
period insurers are not obligated to sell you a plan and may subject you to
medical underwriting.
That means you could
be turned down if you have a preexisting condition, or charged a higher premium
based on your health.
There are some
exceptions to this, such as if you lose an employer health insurance plan or
move out of your Medicare Advantage service area, and some states have
different open enrollment rules. But unlike Plan F, Plan G does not necessarily
offer “guaranteed issue” rights in these special circumstances.
Once you’ve enrolled
in a Medicare Supplement plan, your renewal in that plan is guaranteed as long
as you don’t miss your premium payments, though your premiums may change.
https://considerable.com/medicare-supplement-plan-g/
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