There are a lot of letters flying around the Medicare space, which can make it really hard to tell the difference between plans. We aren’t going to tackle all of them today, but we are going to talk about two popular Medigap plans, Plan F and Plan G.
First, let’s address what a Medigap plan is. These are also called Medicare Supplement plans, and they act as secondary insurance to your Original Medicare benefits under Parts A and B. There are only about ten Medigap plans to choose from, and they’re named by a letter of the alphabet. They include Plans A, B, C, D, F, G, K, L, M, and N.
The reason someone would choose to enroll in a Medigap plan is to supplement their Part A and Part B benefits. While Original Medicare offers great coverage, it still leaves you with quite a few out-of-pocket costs. A Medigap plan will pick up some or all of those leftover expenses, depending on which letter plan you choose.
The last thing you need to know about Medigap plans before we talk about specific benefits is that these plans are standardized. What that means is that no matter where you purchase a particular plan, it will always have the same benefits. You can get Plan F with Company ABC, and you’ll have the exact same plan as your friend who bought Plan F with Company XYZ. The only difference you’ll notice is the monthly premium.
Plan F has always been called the “Cadillac” of Medicare Supplement plans. It picks up every remaining cost for Medicare-approved services, leaving beneficiaries with virtually no out-of-pocket expenses. Pretty nice, right? There are just a couple of small problems with Plan F.
Medigap plans don’t often see changes. Their benefits remain the same from one year to the next, and new plans are rarely introduced. However, some changes did take place in 2020 after the passage of the Medicare Access and CHIP Reauthorization Act of 2015. The act stated that no newly-eligible Medicare beneficiaries could enroll in Medigap plans that offered first-dollar coverage, which Plan F did. The year 2020 was when that particular change went into effect.
So, if you turn (or turned) 65 on January 1, 2020, or later, you are not allowed to enroll in Plan F. (The same applies to Medigap Plan C, which also offers first-dollar coverage.) Anyone already enrolled in Plan F was allowed to stay on the plan. In addition, if you delayed Medicare enrollment past the age of 65, you can still enroll in Plan F as long as your 65th birthday was prior to 2020.
How much does this Cadillac coverage cost? That depends. All Medigap plans base their rates on a variety of factors. Premiums are calculated by assessing your gender, age, zip code, and tobacco status. On top of that, private insurance carriers can choose to set their own rates using one of three pricing methods. But, to give you a general idea, the average premium for Plan F in 2023 was about $172.
Now let’s talk about another popular option, Plan G. Plan G might just be the new Cadillac of Medicare Supplements since Plan F has age limitations.
Plan G is nearly identical to Plan F, with just one minor difference. Plan G does not include coverage for the Part B deductible. Right now (2023), the Part B annual deductible is $226. Plan G has no eligibility limitations as Plan F does. As long as you’re enrolled in Parts A and B, you can apply for Plan G.
The interesting thing about Plan G is that it often makes more sense to choose than Plan F. Here’s why. The average premium for Plan G in 2023 was $132 per month. That’s a $40 difference, which ends up being a $480 difference for the entire year. Even if you had to use your benefits and pay the Part B deductible, you’d still have $247 leftover! For this reason, we almost always recommend our clients choose Plan G over Plan F, even if their age makes them eligible for both.
If you’re currently enrolled in Plan F, it would be beneficial to chat with one of our local Medicare specialists. We can shop for plans and determine if you’d be able to save money by switching to Plan G - or even another Medicare plan. In most cases, you’ll need to pass medical underwriting to switch plans, but our agents will walk you through every step of that process. Call and speak with one of our advisors today!
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area which are United Healthcare, Aetna, Humana, Cigna, Blue Cross Blue Shield of Arizona, Centene, Devoted, and Scan. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.