For most of the seniors who chose Original Medicare, the number one Medicare question I get day to day is… which Medicare Supplement insurance plan is the best.
There really are a few Medicare Supplement plans that answer that question. Most of the time, it does come down to either Plan F , Plan G, Plan N or High Deductible Plan F or G.
In this post though, I hope to help you figure out which Medicare Supplement, Plan F or Plan G is best for you if your financial means allow. These 2 are the most feature rich plans available. Be aware, you must have been Medicare eligible prior to January 1, 2020 to purchase a Plan F.
You must also be on or switching to Original Medicare to apply for a Medicare Supplement, period.
If you were to ask me 25 years ago when started offering Medicare Supplement insurance which the way to go, I would have probably shouted “Plan F” from the mountain tops. Truth be told, my happiest clients always touted iand most often, still do.
Why so happy with it? After all, it has a significant price tag attached to it…
You simply don’t have to hassle with anything.
Between Medicare and the Plan F, there is no dealing with medical bills as long as Original Medicare has approved the charges of the provider. The larger majority of seniors did, for many years, choose the Cadillac ” F Plan ” and raved about it.
However, it is important to understand, Medigap Plan F has risen in premiums at a higher rate than other plans including the comparable, Plan G for 24+ years plus now.
Many retirees have ended up with a variable degree of “sticker shock” when desiring “top of the line” so to speak.
Forgoing some convenience can offer significant savings to seniors preferring to save money and yet have great coverage.
Jumping forward to the here and now…I have a completely different attitude and mindset. Opinion will often leak into my recommendations based on real life experience with clients. Good or bad, it’s the truth. I have a good amount of wisdom you could say. I’ve watched consumers go through extensive rate increases since those paper rate sheet days.
A good independent agent should always offer advice of not only the upsides, but the possible downsides so you can reach a clear decision on what Medigap plan suits you the best.
What I say here is based on facts as well as experience of working with a lot of people on Medicare.
The Mighty Plan F
In the world of Medicare Supplemental Coverage, Plan F is clearly the top flight plan you can buy. You are not going to get a more benefit rich plan. Just understand you are going to pay for convenience and not every Medicare beneficiary can purchase this supplemental policy.
Sometimes I see questions about Part F of Medicare. There actually is no “part F” just Plan F. Plan F is supplemental insurance that goes with Part A and B of Medicare.
Yes, Medicare can be confusing.
There are 4 “parts” of Medicare to keep straight. They are labeled A-D. However, there are actually 10+, Medigap “Plans” called Medicare Supplement Insurance.
On all Medicare approved claims and with a Plan F, you will have nothing out of pocket.
It covers the Part B deductible which gives you first dollar coverage for outpatient services like visits to your doctor. To top it off…There is nothing you need to keep track of. Just make sure your premiums are paid to date.
The catch, with this plan, is that there is a lot more administrative costs to the insurance company. These costs are the management of typical claims submitted to the insurer. Nothing is free in this world, especially with insurance. You are billed hundreds of dollars to pay out the Part B deductible for you each year.
Sounds pretty good right?
Guess what…the insurance company charges hundreds of extra dollars to pay that $226 for you in 2023. The Part B deductible renews each and every year. Convenient it may be, but expensive for many that additional benefit is. Plan F policy owners are not going to get that benefit without paying the piper.
What happens if you do not go to the doctor? On a Plan F, you pay it in your premiums whether you go or not. Maybe you or someone else you know just visits the doctor for a yearly physical. That is a wellness benefit that Medicare pays 100% for. It is not even applied to your Medicare Supplement or Part B deductible. Keep this in mind.
Medigap Plan G – The Great Value
How about a similar plan that would let you save that $226 (2023 Medicare Part B deductible) each year? This plan will not charge you excess premium to cover the Part B deductible each year and still provided benefits nearly matching the highly regarded Plan F? What if I told you the cost was hundreds of dollars less a year as well even if you had to pay the $226 (in 2023) for outpatient care?
And…that policy is…drum roll please…the Plan G. If you have been looking for Medicare Plan G reviews, here is why you may seriously consider this plan…
The G Plan has been a favorite of this office for 24 years or better.
Arguably, the Plan G is definitely a better value for your Medicare Supplemental Coverage than a Plan F or the ” F Plan ” as it is sometimes called.
On any Medicare approved claim, the only expense of a Plan G that you pay the annual Part B deductible required by Medicare ($226 in 2023) if outpatient medical care is required.
This is your “skin in the game.” In return however, you save hundreds of dollars a year after paying the $198 out of pocket. Lower average increase in premiums over time have also been historical of the Plan G.
Let’s face it, insurance costs rise, they don’t go down as a general rule. Yes, you might have heard somewhere about ABC or XYZ company lowering the cost of Plan G.
Forget that one instance.
Over time, premiums go up.
Twenty years ago, Medicare Supplement insurance agents had nothing but paper rate sheets provided by each insurer. Now with our very modern database quoting technology it is very easy to see the percentage of increased costs. All the plans from all insurers have gone up quite a bit!!
On a very positive note, Plan G however has gone up considerably less than Plan F over the years and is now my first suggestion to seniors.
Who is the the Plan G for?
If you are the type of person who does not see him or herself visiting the doctor often and/or would rather live without some payment convenience of the Medicare Part B deductible in exchange for lower premiums than a Plan F, then Plan G is absolutely the top option.
Since I have lost count of how many people that have purchased Plan F with my assistance, I don’t mean to suggest it was a bad decision on their part. Plan F is a no hassle plan, period. To a heck of a lot of people, it is really worth the first dollar coverage. Even if it is more expensive to own year in and year out.
Their money, their decision. It may deliver service that they want.
With that said, it is also important that I mention a big change in the available Medicare Supplement plans effective January 1, 2020. Plan F is no longer available to people who were not Medicare eligible before that date.
I foresee a possible problem brewing for policyholders still on Plan F after that date…depending on your state incidentally.
You see…
Since the younger folk turning 65 will are not allowed to select this plan, the aging individuals covered under this plan can potentially experience larger rate increases than in the past.
Being a first dollar coverage plan, Plan F policy holders tend to be use coverage a bit more than those people who elect a the G Plan for example.
And sadly…
It is a fact of life, people generally do not get healthier in their golden years. Insurance companies have statistics and history to prove it. This is why insurance premiums are more expensive as we age.
So, without “young whippersnappers” (seniors age 65) entering the Plan F in 2020 and beyond, those blocks of business will just age. With greater losses comes higher premiums as the profits diminish for the insurer.
Then again, because all new applicants will be required to go thru medical underwriting, only those in acceptable health will be allowed to purchase a Plan F. This could lead to more stable premiums. Hard to say for sure.
Now, how your state regulates an insurer to offset the higher claims experience in Plan F will tend to determine the allowable premium increases. Some states do not allow insurers to charge their “loss experience” to one particular plan.
Now, am I telling you you should definitely hurry and buy a Plan F or Plan G?
No.
Not knowing your income level, needs and wants I can just make suggestions.
All Medicare Supplements are guaranteed renewable as long as you pay your premiums. No worries there. Medicare is not going to take away your Plan F coverage. This is just experience based advice combined with facts about Medicare Supplements to help you make a good informed decision as you move forward with Original Medicare.
The idea here is to give you some important details about the two most benefit rich Medicare Supplement offerings… Plan F and Plan G.
Is Medigap Plan F Worth It?
You must decide if paying for the ease and convenience of having no “skin in the game” insurance with Medicare Supplement Plan F. Personally, though I’m not on Medicare yet, my deceased business partner did chose the Plan G over Plan F. He was willing to have the responsibility of the Part B deductible each year in order to save money on his insurance premiums.
I truly hope this article has helped you make a better decision for yourself on your healthcare benefits. Reviews of Medicare Plan F are usually focused on the fact that it is the top of the line Medigap insurance but don’t always illustrate the cost versus benefits means.
The convenience of having all Medicare approved bills paid for with no hassle is a feature some seniors really love…even if the cost of ownership is higher.
Monetarily, the Plan F just does not provide savings over a Plan G… regardless of the claims history. Financially, regardless of medical claims, this is the fact.
Medicare can be a bit tricky to navigate. If you are confused about Medicare Supplemental coverage and how it works with Medicare, go to our article on “Your Medicare Benefits” to get a refresher course.
We are also advising seniors to look at the Plan N before deciding on one of the aforementioned plans. The new MACRA laws took full effect on January 1, 2020. As a result of the changes in the law, we are seeing elevated rate increases in Plan G. Considerably more than in the past.
Why?
Most likely a side effect of MACRA which has eased the entry into a Plan G under Medicare “guaranteed issue” provisions. This isn’t a good thing to keep Plan G rates lower… unfortunately. More people with serious health conditions are going to be offered this plan if they meet Medicare “guaranteed issue requirements.”
Further detail is beyond the scope of this article. Give us a call to discuss your questions.
Make sure you work with a seasoned Medicare specialist to guide you. Not all companies have stable rates and it is important to understand the history before you buy. Make sure your independent agent/broker has been around the block for a few years and has access to all the top Medicare Supplement insurance companies rates in the state.
If you have any further questions and or need or help, please don’t hesitate to call us 269-244-3420.