For some seniors, navigating all of the options offered with Medicare can be difficult. This article is intended to give readers a clear idea of two of the most popular Medigap policies on the market and tips on shopping to get the best benefit for your dollar. Always review the Centers for Medicare & Medicaid Services Medicare handbook “Medicare & You.”
There are 10 Medigap policies to select from, all with different benefits. In my experience, you should only worry about 2: F and G. There’s one thing you need to understand about Medigap:
No matter what company you go with the benefits are exactly the same, only the premium (cost) is different within the same letter.
For example, Mutual of Omaha and United Healthcare offer Plan F. They are the same plan, just different costs. Shop the rate, period.
F and G are very similar plans. The main difference between the two plans is the Part B deductible. For 2013, the Part B deductible is $147. This means that you would be responsible for the Part B deductible if you elected to purchase Plan G, but you would not be responsible for any Part A or Part B co-pays. If you selected Plan F, you would not pay the $147 deductible.
The benefit in selecting Plan F is that you are fully covered for your premium dollar. You will have no out of pocket payments at the hospital or doctor’s office provided the services are covered under Medicare. The downside of Plan F is that it generally has the largest annual rate increase of all of the plans and it’s also the most expensive.
With Plan G, you pay a smaller premium because you are accepting a portion of the risk (the Part B deductible). Also, because of reduced payouts, Plan G’s annual increase is generally less than Plan F. The downside is that you are responsible for the Part B deductible each year. The Part B deductible does change each year, so you must be aware of what you would be responsible for out of pocket at the doctor’s office.
Choosing a Plan
Always discuss plans with a licensed insurance agent. You have the ability to find out what your needs are and how to cover those needs for the least premium dollar. I always suggest contacting an Independent Agent to assess your needs because they are able to shop rates with multiple companies to find the best plan for you at the least dollar amount. However, there’s a general guideline in selection between Plan F and G:
If the difference in premium between plan F and G is less (or only marginally higher) than $147 dollars, stick with Plan F. If you’re saving more than a $247 dollars a year by being in Plan G over Plan F, Plan G is a better plan. By becoming knowledgeable about the different plans, you are able to save money, get the best coverage for your dollar and be in control of your healthcare costs.
Finally, always remember that Medigap nor Medicare Parts A or B cover prescription drugs (except for admitted inpatient services). In order to cover prescriptions, you will need a Medicare Part D policy.