Medicare supplemental plans are largely paid for by Medicare, and so the policies are mostly standardized between states where they’re available and between the companies offering them to eligible seniors. That makes comparisons between plans relatively easy, and it means that most Plan G policies offer seniors the same or similar benefits regardless of their cost and availability differences.
Plan G policies cover all of your out-of-pocket costs from Medicare Parts A and B, except for the Part B outpatient care deductible. This means that if you have Plan G coverage, the costs you would normally pay out of pocket at the point of service are instead billed to your Plan G provider, which then gets reimbursed from Medicare. Covered costs can get somewhat complicated, but in general, the plan pays your share of the costs for care provided under the other parts of Medicare.
Medicare Part A is a premium-free insurance plan that pays most of the costs of inpatient care, most often for hospital admissions. While you are in the hospital, you may be given some tests and treatments that have a co-pay attached to them, for which you are expected to pay out of pocket. These extra costs can include blood transfusions in the hospital, nursing care in a skilled nursing home, and palliative care in a hospice. If you have Plan G, your co-payment for these services is covered. If you have an unpaid Part A deductible, which can be as high as $1,400 in 2020, Plan G pays 100% of that as well.
Plan G also acts as a supplement for beneficiaries who need outpatient care under Medicare Part B. Part B covers a lot of services, but you can think of it as being almost all of your medical care except for hospitalization and prescription drugs. Whenever you visit the doctor’s office, ride in an ambulance, or get a diagnostic test done outside of a hospital, you are getting Part B services and may have to pay an upfront co-payment to receive care. Plan G acts as coinsurance for these charges and pays 100% of the out-of-pocket costs for lab work, diabetes supplies, durable medical goods, and interventions performed by EMTs or MICU nurses while you’re riding in an ambulance.
The lone exception to this coverage is the annual Part B deductible that must be paid before any benefits can kick in. In 2020, the Part B deductible is $198, up from $185 in 2019. Once this is paid, your other services are covered by Plan G, including drugs administered at the doctor’s office by your physician, which may seriously reduce your prescription drug costs under Part D.
One benefit of Plan G that many seniors appreciate is the extended coverage it offers for vacationers overseas. Usually, getting medical care when you’re traveling in a foreign country can be difficult, complicated, and expensive, since your Medicare insurance probably isn’t accepted in the country you’re visiting. This means that you can be liable for 100% of your overseas medical costs, even if you have comprehensive Original Medicare coverage in the United States. Medigap Plan G closes this loophole by offering up to $50,000 to pay the cost of the care you get from foreign healthcare providers. Note that because of the complexity and variety of overseas medical systems, it is possible that you will receive services that can’t be paid by any type of insurance. If that is the case, you may still be required to pay out of pocket for your care, even with a solid Medicare supplement.
Though Medigap plans are issued by private insurance companies, they are not open to all applicants. To be eligible for a Medicare Plan G supplement, you must already be enrolled in and receiving benefits under Original Medicare. That means you must meet the eligibility criteria for Medicare itself. With some exceptions, to get Medicare you must:
If you meet the criteria for enrolling in Medicare, you are automatically eligible to begin shopping for a Medigap plan. If you are under age 65, you might still be eligible for Plan G coverage. Beneficiaries of SSDI usually have chronic conditions that become more costly and serious without continuing treatment, and so Medicare is available to them under certain circumstances. If you have been on SSDI for at least 24 months, you may qualify for Medicare and its supplemental plans before you turn 65.
In order to start receiving Medicare benefits, you have to sign up for the plan coverage that you want. This is not always as simple as it sounds. While Part A is provided free of charge to all eligible seniors and doesn’t have to be signed up for, all other parts and plans for Medicare recipients must be enrolled in during the open enrollment periods. If you sign up for any Original Medicare, Medicare Advantage, or Medigap plan outside of the open enrollment windows, you may be required to pay a penalty rate for late enrollment. You could even be denied coverage altogether since federal law allows insurance companies to use normal underwriting practices with late enrollees. This is not the case for applicants who choose their coverage during the initial enrollment period, when age, health, and pre-existing conditions are not allowed to count against you for providing coverage.
You can buy into a Medicare Plan G policy for the first time during the initial enrollment period, which lasts six months and starts in the month when you turn 65 and sign up for Original Medicare Part B. During this period, federal law requires all insurance carriers to offer you a policy without regard to pre-existing conditions. During this period, you have a guaranteed right to enroll and cannot be denied. Insurers are required to offer you the best premium rates they can, though in 47 states companies may charge you more for factors such as tobacco use and general health. In Massachusetts, Minnesota, and Wisconsin, insurers must charge you a group rate based solely on the cost of care in your geographic area, rather than on individual factors that are part of the normal underwriting process.
If you sign up for a Medigap policy, you have certain rights over how it is managed. You have a right to cancel your policy for a full refund within 30 days of signing up, though if you are outside of an open enrollment window, you could face higher premiums and even be denied coverage due to pre-existing conditions. Some states, such as California, reopen the enrollment window for 30 days each year during the month of your birthday. At these times, you can generally switch your Plan G provider without incurring a penalty rate.
There are times when Medicare beneficiaries have to sign up for Plan G coverage outside of the normal enrollment windows. Under certain circumstances, this can be done without penalties during a special enrollment period (SEP). Some states have their own rules about when an SEP begins and ends. During the SEP, you again have guaranteed issuance rights, as if you were still in the initial enrollment period. You can sign up for Plan G during an SEP if you:
No. Plan G is a Medigap plan, and federal law prohibits companies from offering both Medigap and Medicare Advantage plans to the same customers. Many of the benefits seniors get from Plan G coverage can also be found in some Medicare Advantage plans. Ask an insurance specialist for help understanding your options.
Plan F is the most popular Medicare supplemental policy in America. Plan G is the second-most popular plan because it covers virtually all of the same benefits as Plan F. The two plans differ in only two ways: First, Plan G does not pay the Part B outpatient deductible, while Plan F does. Second, most Plan G options are significantly less expensive than their Plan F counterparts, making them an attractive compromise for many seniors with average healthcare needs.
Plan F is very popular among Medicare beneficiaries for its full-service approach to Medigap, but there are two major reasons to choose Plan G instead, especially for new Medicare recipients. First, it is significantly cheaper in many markets. Second, as a result of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Medigap providers nationwide are expected to discontinue Plan F options in 2020. After the change, Plan G is likely to be the only truly comprehensive Medigap plan that covers nearly all of the same benefits as Plan F.