With the popular Plan F
going away soon, Medicare Supplement Plan G is looking better and better
by Beth Braverman ,
Considerable
Staff | April 16, 2019
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 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 if 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 $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:
·
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 ($1,364 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 $185 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
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.
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. 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.
Medicare Advantage
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
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