Medicare beneficiaries have many options when it comes to enhancing their healthcare coverage. Medigap plans are a valuable tool to help cover expenses that Medicare would otherwise leave you to pay. You’ve got about ten Medigap plans to choose from, but our clients always ask us about just two of them. They ask, “Is Medigap G better than F?”
Medigap Plans F and G have consistently generated the most buzz among beneficiaries because they both offer excellent benefits and are actually very similar. With recent changes in Medicare laws, we get this question more than ever.
The decisions you make while on Medicare are extremely important because they’ll have a huge impact on the care you receive and your healthcare costs. At Bobby Brock Insurance, we understand the weight of this decision and want to give you all the information you need to make an informed decision when deciding between Medigap Plan G and Medigap Plan F.
Coverage Differences Between Plan F and Plan G
We said that Plans F and G are similar in their coverage. In fact, there is only one difference in the benefits they offer: the Part B deductible. Plan F covers it, and Plan G does not.
Let’s take a closer look at what both plans cover.
- Part A deductible
- Part A hospice care copayments or coinsurance
- Part A hospital coinsurance, with an extra 365 days of coverage
- Skilled nursing facility coinsurance
- Blood transfusion (first three pints)
- Part B copayments or coinsurance
- Part B excess charges
- Emergency services during foreign travel (first 60 days of travel outside the U.S.)
Where the plans differ is easier to summarize. In addition to everything in the list above, Plan F also covers the Part B deductible, which is $226 in 2023. Plan G does not cover the Part B deductible.
Who Can Enroll in Medigap Plan F?
Before we go any further into helping you decide which is better, Plan G or Plan F, let’s take a moment to find out if you’re even eligible to enroll in both of them.
First, you must be enrolled in both parts of Medicare (Part A and Part B) before enrolling in a Medigap plan. Most Medicare beneficiaries “age into” Medicare when they turn 65. You can start your Medigap enrollment around the same time that you apply for Parts A and B.
If you’d like to enroll in Medigap Plan F, there is an additional eligibility requirement. You must have turned 65 and been enrolled in Original Medicare prior to January 1, 2020. Due to changes in Medicare law, no Medigap plan sold to anyone who became eligible after that date can cover the Part B deductible. The new rule means no newly eligible beneficiaries can enroll in Plan F.
Didn’t meet the deadline? Don’t worry. There are many reasons why Plan G might be the better option, even if you’re eligible to enroll in Plan F.
Cost Comparison Between Plan G and Plan F
One of the most immediate and tangible differences beneficiaries notice when comparing Medigap plans is the cost. Since Plans F and G are among the most comprehensive Medigap options, weighing their costs and benefits is easy. We’re going to go through a few of the financial considerations for both options.
Medigap premiums will vary based on the insurance carrier and personal factors. The insurance company will typically look at your age, gender, location, and tobacco use. Generally speaking, older people pay higher premiums than younger ones, men pay more than women, areas with higher living costs have higher Medigap premiums, and those who use tobacco will pay more than those who don’t.
Applicants should work with an independent insurance agent to get quotes from multiple carriers. For now, we’ll give you some average costs of Plans F and G to give you an idea of what you might expect.
Historically, Plan F has been the more expensive option of the two, primarily because it covers the Part B deductible. Beneficiaries have higher monthly premiums but also enjoy zero out-of-pocket expenses for Medicare-approved services. The average premium for Plan F is between $140 – $200 per month.
Plan G’s premiums are typically lower than Plan F’s since it requires beneficiaries to pay the Part B deductible. Once the deductible is met, Plan G offers the same coverage. The average premium for Plan G is between $100 – $160 per month.
One thing that surprises many beneficiaries is the annual rate increase on their Medigap plan. Most insurance companies use the attained-age pricing method, which means the cost of your plan will go up as you get older. Other factors like inflation can also trigger an increase, regardless of your carrier’s pricing method.
That being said, some Medigap plans tend to increase faster than others. Plan F does just that. Since no new beneficiaries can enter the pool, the average enrollee age of someone in Plan F continues to increase, and the group is incurring more medical costs as a whole. Those increased healthcare costs lead to increased premiums. We’ve seen Plan F premiums go up 5% to 8% each year, sometimes more, depending on where you live.
Plan G has a more diverse range of enrollees and a continuous influx of newer (younger and theoretically healthier) beneficiaries. This allows for a more stable and potentially lower rate increase compared to Plan F. On average, Plan G premiums increase at a rate of 3% to 5% annually.
We’ve discussed this several times, but it’s worth mentioning again. Beneficiaries who enroll in Plan F will have no out-of-pocket costs for Medicare-approved services. Those enrolled in Plan G will only have to pay the Part B deductible.
However, it’s important to note that you may have other healthcare costs not associated with your Medigap plan. For example, you will need to enroll in Medicare Part D to get prescription drug coverage. Those plans have their own set of premiums and cost-sharing requirements.
In addition, Medigap plans do not cover routine and preventive care for dental, vision, and hearing services. While you can choose to pay for those things completely out-of-pocket, this can strain your budget. Most people who enroll in a Medigap plan also choose an additional policy to cover those items. You can get coverage for all these services in one plan, called a Dental, Vision, Hearing (DVH) policy.
Is Medigap Plan F Worth It?
We say it all the time. Nothing in Medicare – or healthcare, for that matter – is a one-size-fits-all solution. Plan F might be worth it to you but not to your spouse, best friend, or neighbor.
Of course, you can look at Plan F logically to decide for yourself. You’ve got two things to consider: the monthly premium and the annual deductible. We’ve already said that Plan F costs more than Plan G, but we also said that the only difference is the Part B deductible, which is $226 this year (2023). If the annual difference in premium for Plan F is more than $226, it would make more sense to enroll in Plan G and pay the deductible.
Let’s look at an example. Let’s say you got Medigap quotes from Bobby Brock Insurance. We found a Plan F for $160 per month and a Plan G for $140 per month. Using those numbers, Plan F would cost you an extra $240 a year, which is more than if you’d just pay the $226 deductible. In that case, Plan G would make more financial sense.
Not everyone sees it that way, though. You may be a person who would rather have the predictability of Plan F and not want to worry about paying the deductible at all, even if it would mean saving some money. That’s a good option, too! Get a quote from Bobby Brock Insurance, and let us help you weigh the pros and cons of this decision.
Switching from Plan F to Plan G
Thinking about changing your Medigap plan? Once you enroll in a Medigap plan, your policy will automatically renew as long as you continue to make the monthly payments. Many people don’t realize that they can change their Medigap plan at any point during the year. You don’t need to wait for an enrollment period to do so.
The caveat to switching your Medigap plan is that, in most cases, you will be subject to medical underwriting. No, you won’t have to see your doctor for a physical exam, but you will have to answer a few health questions on your application. Your answers will help the insurance carrier determine whether or not they want to accept your application.
Switching from Plan F to Plan G isn’t as difficult as it sounds, especially if you use the help of a Medicare advisor. Our agents will help you fill out the application and coordinate your acceptance and termination of your prior plan. You won’t have to worry about losing your current policy or having a gap in coverage.
Find the Right Medigap Plan
If you’d like to learn more about switching to Plan G or have other Medicare questions, Bobby Brock Insurance is here for you. Our team of expert advisors has helped thousands of beneficiaries just like you make informed decisions about their healthcare plans.
Don’t navigate Medicare alone. Reach out to us today for personalized advice you can trust!