The federal Medicare program for people aged 65 and older was signed into law on July 30th, 1965. Since then, there have been many revisions. The federal Medicare program was made available to those who are under 65 and permanently disabled in 1972. Medicare supplement plans were added in 1992 but were very different than the plans we know of today. Some plans included prescription drug benefits.
In June of 2010, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) went into effect, mandating the Modernized Medicare supplement plans we know of today. Today’s modernized supplement plans have more benefits and better consumer protections than prior to 2010.
In this article, we will examine the cost and benefits of Medicare supplement Plan G and Plan F to help you answer the question; which is better, Medigap Plan G or Plan F?
Medicare Supplement Insurance
With the Modernized Medicare supplement plans, the federal government created 11 standardized supplement plans, down from 14 plans previously. The plans were standardized so that the benefits offered would be the same regardless of the insurance company administering the plan.
The new plans included more coverage for both Part A and Part B services. Most importantly, these new plans are guaranteed renewable. That means the benefits never change from year to year.
Medicare supplement insurance plans are designed to add benefit to your Original Medicare Part A and Part B by paying some or all of the deductibles, copay, and coinsurance left as the consumer’s responsibility without a supplement. Medicare supplement plans also called Medigap Plans, place a maximum out-of-pocket limit on the financial obligation of the consumer to pay Medicare bills.
Medicare Supplement Plans
Medigap Plan F has the most comprehensive coverage of all the modernized Medicare supplement plans. Medicare supplement plan F pays 100% of the deductibles, copays, and coinsurance that is not paid by Original Medicare Part A and Part B. That means Medicare beneficiaries with a Medigap Plan F may have no Medicare bills. The cost of all Medicare services are covered by the combination of Medicare and the Plan F supplement.
None of the Medicare supplement insurance plans offered today include prescription drug coverage. That has to be purchased separately as a stand-alone Part D plan.
Because of the full benefits of Plan F, it quickly became the most popular of the 11 Medigap Plans available. In 2010, the first year of the new modernized plans, Plan F accounted for 40% of all Medicare supplement plans purchased. That number grew t over 60% by 2015. Of course, with the most benefits offered, Plan F also held the spot as the Medicare supplement plan with the highest monthly premium.
Plan F vs Plan G
Is Medicare Plan G better than Plan F? The easy way to tell if Plan G is a better value than Plan F is to look at their annual premiums. If the annual premium of (Plan G + Medicare’s Part B Deductible) is less than the annual premium of Plan F, then G is the better value. It’s that simple. But to learn more and why, read on.
Is Medicare Supplement Plan F Going Away?
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) set out to save Medicare by phasing out Medigap Plan F and Plan C. The act set to law that all people who were eligible for Medicare after 2019 could not purchase a Medicare supplement Plan C or Plan F.
Both plans will always be available to those who are eligible for Medicare prior to January 01, 2020, as long as they can pass medical underwriting qualifications if required. It doesn’t matter if the person had Medicare or a supplement prior to 2020, as long as they were eligible to start Medicare prior to that date.
Why Exactly Is Plan F Being Phased Out?
Both supplement Plan F and Plan C have what is referred to as “First Dollar Coverage.” First dollar coverage simply means that the supplement will pay the Medicare bill from the first dollar due. The beneficiary can see a doctor without any out-of-pocket cost.
Studies showed that when there was no cost to the consumer for doctor visits, some consumers tended to visit a doctor’s office unnecessarily. The number of frivolous office visits was a burden on Medicare. Those same studies showed that consumer behavior changed significantly when there was a copay as low as $20 or a small deductible. Consumers were much less frivolous.
Both Plan F and Plan C pay the Medicare Part B annual deductible. By phasing these plans out, Congress hopes to save Medicare money and prolong its life.
Can I still get Medicare Supplement Plan F?
Any person eligible for Medicare prior to January 01, 2020, can still apply for a Medicare supplement Plan F or a Plan C. Of course, in order to get either supplement, the individual must also pass any underwriting qualifications required by the insurance company. If you were not eligible for Medicare until January of 2020 or later, you cannot apply for a Plan F.
In all but four states, Medicare beneficiaries can be denied a Medicare supplement plan due to their health history. Those states where you cannot be denied coverage include Connecticut, Maine, Massachusetts, and New York. In those states, there is a perpetual open enrollment for Medicare supplement plans. Anyone with Original Medicare can apply for Medicare supplements at any time. No health questions or qualification is required. The insurance company must accept any qualified beneficiary regardless of health.
Although a person may be capable of purchasing a Medicare supplement insurance Plan F, the real question that should be answered is; is the monthly premium cost of F worth extra benefit over a Plan G?
How is Plan G different from Plan F?
As mentioned earlier, the only difference between a Medicare supplement Plan F and a Plan G is that with Medicare G, the beneficiary must pay the annual Medicare Part B deductible if billed. The annual Part B deductible for 2023 is just $226. If a beneficiary has outpatient medical treatment or services, they will pay the first $226 billed in 2023. Plan G has the most coverage of any supplement available to new Medicare beneficiaries.
Across the country, the annual premium for Medigap F is typically at least $300 more than Medigap G. Sometimes at much as $600 more. A person with Medigap G can pay their monthly premium plus pay the annual Part b deductible part of their Medicare bill and still have less money out-of-pocket compared to the premiums of Medigap Plan F.
Both Medigap Policy F and G pay the full Part B coinsurance. With the Part B coinsurance paid for, most outpatient services are fully covered.
Both plans pay the full Medicare-approved amount billed plus an excess charge. Both supplement plans have foreign travel emergency room visits. Not all supplements offer foreign travel emergency benefits. Both plans also cover all hospital costs. Your inpatient admission would cost you nothing, even if you were in the hospital for a year. Both Plan F and Plan G pay all your coinsurance and hospital costs not covered by Medicare.
The Plan F Closed Pool
Plan F and Plan G are both good Medicare supplements. However, as the years go by, the price increases for F should increase relative to G. Why? Because no young 65-year new Medicare beneficiaries can enroll in Medicare Plan F. The result is an aging pool of insured people. Every year the average age increase. The higher the average age, the more medical services, on average, are expected. More medical services means higher costs. Higher costs mean higher premiums.
Plan G will continue to accept newly eligible Medicare beneficiaries, keeping the average age lower and costs down relative to F. The answer to the question of Plan F vs G is clear that G is a better value. Plan G has lower out-of-pocket costs when considering the premium plus the annual Part B deductible.
What is the Deductible For Plan G?
Medicare supplement Plan G does not have a deductible. It simply does not pay the Medicare Part B deductible. This is important to understand because the deductibles for Medicare can change every year, but the benefits of a Medicare supplement Plan G, never change. As a result, the deductible you pay when you have a Plan G can change every year without the benefits of the supplement changing.
Can’t Afford Medigap Plan F?
According to a research study conducted by Gen-Re in 2021, almost 10% of existing Plan F policies lapsed in the year leading up to the study. That percentage is after considering mortality.
A lapsed policy is one that is canceled due to a lack of premium payment. It could be that those lapsed policies are due to people switching Medigap plans, changing to a Medicare Advantage Plan, or even quitting supplement plans altogether.
One can only conclude that for many, the monthly premium increases in a Plan F are forcing people to consider alternatives.
Is Plan G a Better Value than Plan F
To answer the question of Medigap Plan G vs F, of these two Medigap Policies, G is a better value than Medicare supplement Plan F. Their Medicare coverage is virtually identical. But your total costs are less with G.
We work with supplement plans from Hawaii to Virginia and Alaska down to the Florida key. Everywhere we look, when comparing Medicare Plan F to Plan G, we find the latter to be a better value. The Plan G premiums are more stable than Plan F and are low enough that even after paying the Medicare Part B deductible, the Plan G owner will save money.
Should I Switch from Medigap Plan F to Plan G?
If you find the premium increases of your supplement are getting uncomfortable, you should switch Medigap plans if you can. Every day, thousands of people switch plans to lower their out-of-pocket costs without significantly reducing their health care.
When Can I Change Medicare Supplement Policies?
You can switch your Medigap plan any day of the week, 365-days a year. Because the benefits never change, there is no need for an annual enrollment period. You can switch to a plan with similar coverage or the same plan with a different insurer. As long as you qualify medically, it can be a great decision to reduce your monthly premiums and the anxiety that comes with increasing prices.
How can I change Medicare supplement Policies?
Changing Medicare supplement policies is easy. The first step is to talk to a licensed insurance agent that specializes in Medicare. An independent broker should be well versed in Medicare plans, including Medicare Advantage Plans, the high deductible plan, as well as supplements.
That is where Medigap Seminars Insurance Agency fits in. Most people simply fill in a Medicare Supplement Quote Request and let us know which Plan and company they currently have. We use that information to shop the Medicare plans available and make certain you have enough information to make an informed decision.
We then have a conversation about underwriting and if you are looking for similar coverage, concerned about excess charges, or other concerns about what plans cover.
If we are confident you can pass medical underwriting, we will help you choose a date no more than 60-days in the future for your plans to switch. We help you through the application and monitor the application through the entire process. Once you have been accepted by your new plan, we will reach out to you and walk you through how to cancel your old policy.
Medicare Supplement Plan G vs Plan N
If you are going to shop plans, also consider Plan N. Plan N is often considered the best value of all the supplements with full coverage. Plan N has a little less coverage than Plan G but even lower and more stable monthly premiums.
What is the difference between Plan G and Plan N?
Like Plan G, you have 100% Part A coverage. You can spend an entire year in the hospital as an inpatient and not pay a dime. Also, like Plan G, you must pay the annual Medicare Part B deductible when you first have outpatient services during the year.
Unlike Plan G, with Plan N, you will also pay a copay when seeing a doctor for an evaluation or diagnosis. This office visit copay can be no more than $20. Plan N also has no insurance against Part B excess charges. You will need to confirm your doctor accepts Medicare assignment. Some doctors that accept Medicare have a contract that allows them not to accept Medicare assignment. These are the doctors who often include excess charges in their billing.
I believe that if you are considering switching your Plan F and Plan G, you should also consider Plan G vs Plan N. The objective is to find the best plan for your needs and your budget.
Medicare Supplement Plan F vs. Plan G vs Plan N
When comparing Plan F vs G, G should be a lower cost and more stable premium without much difference in benefit. They also both have high deductible plan options.
When comparing Plan F vs Plan N, you will find Plan N to be much lower in premium but will have copays that must be considered. Plus, you must make certain your doctors accept Medicare assignment.
All supplement plans, regardless of the plan letter, have the same covered services because they cover medically necessary services as prescribed by your doctor.
Can I Pass Medigap Underwriting?
Many people who have not switched Medicare supplement plans previously are concerned about passing Medigap underwriting. Medical underwriting for a supplemental health plan is much more lenient than it would be for life insurance. In general, the insurer is looking for critical or chronic conditions that would lead to higher costs in the future.
It costs nothing to speak to a licensed insurance agent about your situation. An experienced agent will look at your health history through the eyes of the insurer and quickly ascertain your probability of passing Medigap underwriting. Don’t let this concern stop you from researching your options and saving money. A lower premium will leave you with more money to spend on yourself today, lower your financial stress, and can improve your life.