When starting Medicare, most beneficiaries get the choice of going down two different routes. The most common route is Original Medicare (Part A and Part B) paired with a Part D prescription drug plan, and getting a Medicare Supplement. We talk about the other route here. Medicare has 10 standardized supplement plans, but the Plan F, Plan G, and Plan N are the most popular by far. They provide the best coverage to supplement the gaps in Original Medicare, but how do you choose which Supplement is the best for you?
Medicare Supplements Summarized
The most important fact to remember when shopping Medicare Supplement plans is that the letter plan you choose will provide the same exact coverage from company to company. The only difference between companies is the price, since supplements are standardized by the government. That means a Plan F that Company A offers for $125/month is the exact same product as Company B’s Plan F at $175/month. Most people are very happy with their supplement because it is paying the bills; they misattribute this being due to the company. It is actually the Plan that is paying, and it will continue to pay the same no matter the company you end up with. It is important to shop around every few years to make sure you are getting the best rate on your supplement.
If you live in Massachusetts, Minnesota, or Wisconsin, you have different standardized Medigap plans that you can buy, so they will not be named F, G, or N, but you can get benefits very similar. We can help you with this as well!
Plan F is the most popular plan among Medicare beneficiaries. 54% of people with Medicare Supplements have a Plan F. It is also the most expensive plan due to the fact that it is the most comprehensive. When you have a Plan F, you will have no deductibles or copays at the doctor. Everything that supplements can cover is covered by this plan.
Rumors about the Plan F going away have been circulating for years. This is only partly true. Beneficiaries who start Medicare on or after January 1, 2020 will not be eligible for Plan F. If you started Medicare before then, you will be able to keep your Plan F or even switch to a Plan F if you want to in the future. Nothing changes for you!
The Plan G is exactly the same as the Plan F apart from one aspect: the Part B deductible. In 2019, the Part B deductible is $185. After you pay the deductible every year, the Plan G basically turns into the Plan F, paying everything that supplements can cover with no copays. In most cases, the price of the Plan G is low enough to still be cheaper yearly than the Plan F, even after paying the deductible. For example, if a Plan F is $150 a month ($1800/year) and the Plan G is $125 a month ($1500/year), the difference yearly is $300. After paying the $185 deductible, you are still saving $115 a year. Many people are switching to the Plan G due to these savings; 19% of people with Medicare Supplements in 2018 bought a Plan G, up 4% from the previous year.
The Plan N is the third most popular plan, taking up 11% of the market in 2018. It does have more gaps than the Plan F and Plan G, but the trade off is that it is the lowest cost plan of the three. Like the Plan G, it does not cover the Medicare Part B deductible. In addition, it has copays, which includes up to $20 for doctors visits and $50 for hospital visits that do not result in admission. This $20 could add up if you go to the doctor a good amount, and could even make the Plan G or Plan F more affordable in the long run.
The Plan N also does not cover Medicare Part B excess charges. Excess charges occur when a doctor charges more than Medicare’s predetermined payment amount for a service or procedure. While some states do not allow doctors to charge these (these states are highlighted in the map), in states that they can, doctors have the option to charge up to 15% above the Medicare approved payment amount. While doctors doing this is relatively uncommon, if you are going to a doctor who does, these costs can get high. There is no annual limit on the number of times a doctor can charge these, or even an annual payment limit. The easiest ways to avoid these charges is to either get a supplement that covers them or make sure your doctor does not charge them.
What should you choose?
For most of our clients, we recommend the Plan G, as it gives you the most comprehensive coverage at the most affordable price. If you are currently on a Plan F, Plan N, or even another plan, you can switch to the Plan G. It is not a guaranteed right in most cases though past your initial enrollment period. You will have to answer health questions, which vary by company. Health questions are not impossible to pass though, even if you are sick. Just make sure to go to an insurance brokerage that can compare multiple companies health questions. Some states allow Medicare beneficiaries to change plans without health questions due to special exceptions or things like the birthday rule. States with exceptions such as these are highlighted below. If you live in one of these states and are interested in learning more, please reach out to us.
If you would like to compare the prices of Supplements in your area without giving any personal information, you can do that in the box below.