Medicare supplements: Plan F vs Plan G
You’re ready to buy a Medicare supplement and you want the most bang for your buck. You’ve heard that Medicare supplement Plan F is the most comprehensive but have you looked into Plan G?
Medicare supplement Plan G is not as popular as Plan F but it deserves a look. There are 10 standardized plans referred to as Medigap policies, Medicare supplements or just supplements. The more the plan pays towards your costs for covered services, the higher the premium. So how do you find a balance between what you pay in premiums and what you are willing to pay out-of-pocket when you receive covered services?
To find the answer you will need to consider your budget, your health and your general attitude towards insurance.
First, let’s look at the differences between the two plans. Plan F will pay 100% of your share for Medicare-covered services. This includes:
- Part A coinsurance
- Part A deductible
- Part A hospice coinsurance or copayment
- Part B coinsurance or copayment
- Part B deductible
- Part B excess charges
- Preventative Part B coinsurance
- First 3 pints of blood
- Skilled nursing facility care coinsurance
- Foreign travel emergency (up to plan limits)
That’s 100% of your share of expenses for covered services. If it’s not covered by Medicare, a supplement won’t help. A supplement fills the gaps in covered services.
Now, Medicare supplement Plan G. Everything is covered except the Medicare Part B deductible, now $147. There is really not a lot of difference between these two plans. So what’s the key to choosing?
Plan F vs Plan G: Probability and mathematics
Comparing Medicare supplement plans between insurance companies is easy because plans are standardized. The Plan F benefits will be the same no matter which company you take a look at.
Once you have found the lowest premiums for these two plans you need to do the math. It’s mostly about the numbers because the probability of requiring outpatient (Part B) services is fairly high. Most years you will probably need services and would need to you pay the full deductible.
The difference between the annual premiums is the key. If the annual premium for Plan F is $147 or more than Plan G, you should choose Plan G. If it’s less, choose Plan F. The exception to this is if you have a crystal ball and know that you will never need outpatient services for the year.
You may find that the point is somewhat mute because insurance companies are not going to earn a smaller margin on one plan or the other unless they have some solid actuarial data indicating a variation in claims experience between the two plans.
Choosing between Medicare supplement Plan F and Medicare supplement Plan G may come down to your general philosophy about insurance. If you want to purchase and forget about it; get Plan F. If you want to bet on not using covered outpatient services; buy Plan G. You really can’t go wrong with either one.