In the complex world of Medicare, one of the easiest things to compare and understand is Medigap plans. The plans are distinguished by their letters (Plan F, Plan G.) and they are standardized – which means that any company that sells that plan must offer exactly the same benefits and coverage as mandated by law.
Medigap plan F is the most comprehensive plan and the most popular. But Plan G is increasing in popularity and there are two reasons to look at this plan.
1. The only difference in coverage is small. The only difference between a Plan F and a Plan G is the annual Medicare Part B deductible - $166 in 2016. So, to see if it is better to purchase a Plan G over a Plan F is very simple. Take the cost of the Plan G premium for a year, add $166 and if the total is less than the cost of Plan F you can save money. For example here is how the math works:
Cost of Plan G per year - $1200
Part B deductible $166
Total Annual Cost Plan G $1366 per year
Cost of Plan F - $1700 per year
Cost of Plan G - $1366 per year
Saving Plan G over Plan F $ 334 per year
2. Beginning in 2020 you will no longer be able to buy a Plan F. Due to changes in the law all Medicare supplement plans will require the individual to share some of the cost of care. In this case, the Part B premium. If you currently have a Plan F – you will be able to keep it. But people new to Medicare will not be able to buy a Plan F beginning in 2020. So over time the costs of those plans will increase because there are no new, younger and healthier people coming into the pool of people who are covered. With increasing claims, the price of the plan will go up.
You do not need to do anything different with your Plan F now. But, getting familiar with Plan G now is a smart move. Remember, switching Medicare supplement plans requires you to answer health questions...So if you are thinking of switching to lower the cost of your premium, do it while you are healthy. And the Part B premium of Medicare goes up every year, and the cost of your insurance plan will also increase due to health care costs and your age, depending on how your plan rates are determined.
Right now not all insurance companies offer Plan G. The largest Medicare supplement company –AARP United Healthcare- does not yet offer Plan G. But expect Plan G to become more popular and offered by more companies over the next several years.