Medicare is a very useful benefit and has helped millions of people as they enter retirement.
The one drawback is that there are a lot of medical expenses that Medicare does not cover or only partially covers, frequently referred to as “gaps”.
These gaps can be filled with supplemental plans (frequently called Medigap Plans) that are available in all 50 states. One of the most popular of these plans is Medicare Supplement Plan G.
Plan G Benefits
Medigap Plan G usually provides the following:
- Copayments/coinsurance for Medicare Part B
- The Deductible for Medicare Part A. This was $1,340 per benefit period in 2018. The benefit period starts when you go into hospital or a nursing facility. It will last until you have no longer received inpatient care at either facility for a total of 60 consecutive days.
- Coinsurance that is not covered by Medicare Part A when it comes to hospital costs. This is typically 20%.
- A total of a year’s worth of additional care in the hospital once your Medicare Part A limits have been exceeded.
- A total of three pints of blood for free in a calendar year.
- Coinsurance that is not covered by Medicare Part A when it comes to nursing facility costs. As with hospital costs, this is typically 20%.
- Copayment or coinsurance payments that are not covered by Medicare Part A and that relate to hospice care.
- Some coverage for emergency medical care if you are abroad and experience an emergency. You’ll be covered for up to 80% of costs, depending on the limits of the plan. The plan must approve the tariffs. You get a total of $50,000 in cover per year.
- In some cases, the excess charge that is incurred when using a health-care provider outside of the Medicare assignment will also be covered. This is useful in instances when you have specialists who charge above Medicare rates.
- The excess charge mentioned above is limited to 15% over what Medicare suggests. It may be levied in special circumstances, so do check upfront whether or not this applies in your case. If the procedure is covered by Medicare, Plan G should cover this charge.
- Medigap Plan G will apply as long as the original benefit was covered by Medicare. So, if Medicare does not cover the procedure, you’ll have to pay the full amount.
- You will still have to cover the cost of the outpatient deductible that is charged.
- By and large, though, this plan comes into action and settles whatever Medicare does not, once you have paid the deductible.
A range of private companies administer the plans. As a result, the benefits are standardized, but the costs are not, which means that you should always obtain a few quotes before settling down with one particular insurer. Your location, age, and so on will all determine how much you’ll need to pay on a monthly basis.
It also pays to learn how your chosen company will increase premiums later. These are the most commonly used methods for determining increases:
- Community-rated: Age doesn’t matter here – everyone pays the same. This arrangement is not fair to the younger plan holders, who will presumably be healthier.
- Issue-age-rated: You will be assigned a premium when you join up, based on your age at the time. Aside from inflationary increases, your premium won’t increase as you get older.
- Attained-age: In this case, the premiums will go up based on your age as you get older.
It does bear considering that all companies need to adjust their premiums annually due to inflationary pressures. A company that charges according to attained age, however, could well exceed these increases. It could end up the priciest option in the end.
You’ll need to enroll in Medicare Part A and Part B. This supplement, however, is not available in all areas. Go online to see whether or not the plan is available in your area. Normally all you’ll need is to provide your zip code to check on this.
If the plan is available in your area, you’ll need to qualify in terms of age as well. You must be at least sixty-five to apply for this plan.
There is what is termed an open enrollment period. This extends for six months from when you are either first enrolled in Medicare B or have turned sixty-five. Both conditions must be met for you to qualify for enrollment at this stage.
The benefit of enrolling during this open period is that you cannot be denied coverage. If you have a pre-existing condition, the insurer is entitled to impose a waiting period before full coverage for the condition commences.
They may not, during this period, load your premiums or decline coverage completely. They may, however, refuse to pay claims if it comes out at a later stage that you were dishonest about a pre-existing condition when you signed up for the plan.
Whilel Plan G is one of the two most popular medicare supplement plans, it is really only one of ten possibilities for most people.
These are the top alternatives to Medicare plan G.
Medicare Plan N
You could choose Medicare Supplement Plan N as an alternative if you want to save some money in terms of premium.
Plan N does not provide quite as much coverage, so it is a good option if you are a relatively healthy, active individual. It does provide many of the same benefits but does require that pay a copayment of $20 per doctor’s visit.
You’ll also have to shell out $50 for a visit to the emergency room if you don’t end up being admitted. Plan N does not cover the excess charge that doctors outside the Medicare system might levy. This is another thing to consider when making your final decision.
Medicare Plan F
If you’ve got a bit of extra money left over every month and a lot of medical bills, it might pay to go for the more expensive Medicare Supplement Plan F.
This is the most comprehensive of all the supplementary plans and ensures that you won’t have to pay copayments or coinsurance. It’s a good option to look into if you have a condition that requires you to use a specialist who charges more than standard Medicare rates.
Having said that, it is also the most expensive of the supplementary plans, so it’s not ideal if you’re a healthier individual. What is good about this plan is that insurers will usually give you a good deal on premiums if you are willing to increase your deductible.
That could allow you to have the best of both worlds if you’re healthy now but aren’t sure what the future might hold.
Medicare Supplement Plan G Bottom Line
Plan G has become the only plan that is as popular as Plan F. Since many people end up spending less money for the same coverage with Medigap Plan G it becomes a no brainer.
Getting the best rates on any Medicare supplement can best be done by getting quotes from multiple companies. Since all the Medigap plans offer the same coverage no matter which carrier you choose, getting the best prices is much easier than with private health insurance plans.
If the math works to where Medicare Plan G is a better deal than Plan F, it is a plan that is easy to use and to budget for each year.