Medigap Plan F or Plan G
The Difference Between Plan F and Plan G is $166.
It really is quite that simple. The difference between Plan F and Plan G is the annual Part B deductible of $166 (2016). After the deductible is met, Plan G benefits are exactly the same as Plan F. Plan F benefits include coverage for all copays, deductibles and coinsurance. This type of coverage has made Plan F extremely popular among seniors on Medicare.
Why Consider Plan G when Plan F is Popular?
It’s easy. Plan G is a great value and Plan F can cost you more money for basically the same coverage. Most people get Plan F because their friend has Plan F. Or, perhaps their agent or insurance carrier didn’t explain the other plans available.
Some agents will quickly tell you that everyone gets Plan F because it “pays for everything”. This is true. But you also need to make sure Plan F’s premium suits your budget. Plan G can be a much better value considering the benefits and low premium.
There are a couple reasons why an agent or insurance company might recommend Plan F over Plan G.
- Plan F typically has a higher premium than Plan G. The higher the premium the bigger the agent’s commission.
- Some insurance carriers don’t sell Plan G, so the best plan they can offer is Plan F.
There is only 1 difference between the plans.
This one difference is what can save you hundreds of dollars now and potentially thousands over time. Looking at the chart below, you can see the Part B deductible is not a Plan G benefit.
Although Plan F covers the Part B deductible, you’re still paying for it. It’s just added into your premium.
Why does Plan F cost so much more than Plan G?
There are several reasons. It costs money for the insurance company to manage, handle, and pay the Part B deductible payment for you.
This is factored into your premium dollar. So, you actually end up paying for this “convenience” with Plan F.
Plan F can also be more susceptible to rate increases. Because of its popularity and guaranteed acceptance with qualifying individuals, Plan F typically has more unhealthy people than Plan G. This equates to more claims and higher rates passed to the policy holder.
The future of Medigap Plan F and what you need to know.
Congress passed legislation prohibiting the sale of plans offering Part B deductible coverage. This includes Medigap Plan F.
Insurance companies will no longer be able to sell Plan F to anyone who becomes eligible for Medicare on or after January 1, 2020.
Current policy holders and anyone purchasing before 2020 will be able to keep Plan F. In addition, if you are Medicare eligible before January 1, 2020, you are allowed to purchase Plan F after 2020.
Need an Example of how Plan F and Plan G compare?
Mrs. Smith is a 70 year young woman who does not smoke. Mrs. Smith is currently on a Plan F and pays $1,800 a year in premiums.
Let’s compare a Plan F to Plan G and calculate the savings.
1. Plan F with Company ABC charges a yearly premium of $1,800.
2. Plan G with Company XYZ charges a yearly premium of $1,400.
Remember, the only difference with Plan G is that Mrs. Smith has to pay the Medicare Part B deductible ($166) instead of her insurance company incorporating it into the premium.
Mrs. Smith is spending more on her premium for Plan F.
This is because the annual premium of Medigap Plan G plus the Part B deductible ($1,400 + $166 = $1,566) is less than the Plan F annual premium ($1,800).
Mrs. Smith would save $234 a year for Plan G. Including the Part B deductible…which is usually paid over several office visits.
Let’s also consider the long term effect of Plan G vs. Plan F. Market history has shown that Plan G has stable rate increases. Insurance companies like Plan G and some have even REDUCED Plan G premiums to get your business.
Comparing premium rate increases over five years, we see the true value of Plan G.
Plan F is the most popular plan, however it can also be the most expensive.
Plan F is the most comprehensive Medicare supplement plan. But as it’s been explained, Plan F is not necessarily the best value for your premium dollar.
As always, our goal is to show you how to save significant amounts of money by choosing the best plan for your premium dollar.
Thank you for reading The Difference Between Medigap Plan F and Plan G.
By consulting directly with REMEDIGAP, you have access to personal service before, during, and after purchasing a Medigap plan. Education is key and we want you to understand Medicare and Medigap and how they work together. We will answer all your questions before you make a decision, so you’ll never feel rushed. You may already know a lot about Medicare and have no questions at all. Either way, we will customize our approach based on your needs. Once you decide what you want, we’ll guide you through the application process and be there every year to review your rate.