Medigap Plan G is typically the best Medicare Supplemental insurance deal in most markets. While Medigap Plan G is not the cheapest Medicare supplemental insurance out there, it could save you a bundle if you have serious medical expenses. After reviewing this article, the question you should ask yourself is, “Can you afford NOT to purchase Plan G?”
Medigap G: A quick review
Medigap Plan F used to be the most popular plan in America, but this is no longer the case. Plan G now accounts for the most Medigap sales of all Medigap plans (Source: AHIP “State of Medigap”). Why the switch from Medigap F to G in popularity? M.A.C.R.A. The Medicare Access and CHIP Reauthorization Act changed the rules for Medicare in 2020 and stated that Medigap Plan F could no longer be sold to those who are new to Medicare. Those who are currently on Medigap Plan F can safely keep plan F, but those who turn 65 after Jan 1, 2020 can’t purchase it.
When you compare Plan F to Medigap Plan G, Plan G offers nearly mirrored coverage. Medicare Supplement Plan G, just like Plan F, allows you to see any doctor that is in the nationwide Original Medicare network. On top of this, both plans cover your Part A deductible, Skilled Nursing Facility fees, additional 365 days of hospital coverage, foreign travel emergency coverage, along with many other benefits. There is only one difference between Medigap Plan G and Plan F-with Plan G you have to pay the one-time calendar year Original Medicare’s Part B deductible. Don’t worry, this isn’t costly! Your Medicare Part B deductible is $233. You’ll pay this only for non-preventive doctor visits and this is only required once a year (if at all).
Is Medigap Plan G the Best?
Great question! In comparison to a Medigap F plan, you often can typically save anywhere from $30 to $60 a month. Even after paying the Part B deductible, you could save up to $500 a year! Now in comparison to other Medigap plans available, with those plans you’ll have significantly more out-of-pocket costs. See, Medigap plans like L or K still have some areas where they don’t cover gaps in Medicare coverage. Some plans, like Medicare Plan A, require you to pay all of Medicare’s Part A deductible, which is a whopping $1,556. This deductible starts over after 60 days of hospital admittance. You could technically pay the part A deductible up to five times a year!
Hopefully, you’re healthy now. However, you cannot foresee potential health issues so you’ll want to start off with the best Medigap plan for your future needs. In most states, you cannot switch your Medigap plan after your initial enrollment without reapplying and going through medical underwriting. This is just fancy speak for “they could turn you down for preexisting conditions if you try to switch in the future.” We recommend selecting a Plan G now, even if you don’t foresee medical needs in the near term.
Potential Medigap Plan G Savings in One Year: 1 Million?
Could Medigap G save you $1 Million dollars in one year of medical expenses? Not quite but close. You would have to have a very rough year medically but a Medicare Plan G saves you roughly $800,000 in potential fees Medicare would typically pass on to the patient. Below is what Plan G covers and how much you could save if everything went wrong.
Your Medicare Part A Hospital deductible: (Medgap G saves you $7,700+)
Medigap Plan G pays 100% of your Part A deductible. Those with just Original Medicare have to pay $1,556 for each 60-day benefit period. This means that if you’re hospitalized and released, but reenter the hospital after 60 days, you would have to pay that same $1,556 deductible again. One in five Medicare patients is hospitalized after their original release. Therefore, paying your Part A deductible more than once is likely. Most Medicare patients won’t have five separate hospital stays over 60 days apart, but if you are one who does, you could pay up to $7,780 extra per year as calculated in 2022. That’s a lot of dough!
Extra Hospital Stay Costs During days 61-90: (Medigap G saves you $11,500 +)
If you have a hospital stay that lasts more than 60 days, without a Medigap plan, you have to pay $389 per day in coinsurance Original Medicare fees. If you didn’t have a Medigap plan and stayed the full 30 days, you would pay an outrageous $11,670 in 2022.
Extra Hospital Stay Costs for Over 90 days: (Medigap G saves you $650,000 +)
The amount you pay in coinsurance for hospital stays with Original Medicare beyond Day 90, is crazy-expensive at $778 a day. Plus, these additional days are considered “lifetime reserve days”, with only 60 banked days allowed! Plan G would pay the $778 benefit. Which would save you 60 days x $778 = $46,680 (in 2022 numbers). In addition, Medigap plans extend hospital coverage for an additional 365 days. The national average per day for a hospital stay in 2022 is $2,873 (according to Kaiser Family Foundation). If you spent the rest of the year in the hospital, the cost could be $2,873 x 215 = $617,695.
Skilled nursing cost from day 21 through 100: (Medigap G Saves you $15,500+)
Without a Medigap plan with Skilled Nursing Facility fee benefits, you’d pay $194.50 per day for days 21-100. This could cost you in 2022: 80 days X $194.50 =$15,560.
Doctor Fees: (Medigap G Saves you 20%)
With Original Medicare you pay 20% of doctor fees. Due to the varying factors, it’s impossible to give a figure, but this can really add up. With Plan G this is covered at 100%.
Part B Excess Charges: (Medigap Saves you 15%)
Many doctors charge beyond the Medicare reimbursement rate. With only Original Medicare, you pay 100% of these Part B excess costs. Plan G is the ONLY plan available for those new to Medicare that covers this expense. Again, this one is hard to quantify, but if you visit the doctor regularly, the savings could be significant.
Blood: (Medigap G Saves you $720)
One single victim of a car accident can require up to 100 pints of blood (according to the Red Cross). Original Medicare does NOT cover the costs of the first 3 pints of blood. The average cost for a unit of blood is $241 (according to the National Library of Medicine). Plan G covers this benefit at 100%, which is an average savings of $241 x 3 =$723.
Foreign Travel: (You could save $50,000)
Original Medicare doesn’t offer foreign emergency medical coverage. Plan G covers 80% of these costs up to $50,000.
Total Savings with Plan G
As you can see the fees, using the assumptions above, can really add up. With roughly $800,000+ in additional coverage from Medigap Plan G, compared to Original Medicare, you can see why this plan is the new gold standard. While most of us won’t have anywhere near these expenses, for those with serious health issues, without Plan G, the costs could mount.
1) Click here to see what Medigap Plan G would cost you in your area
2) Questions: Leave a comment below or call an agent at 800-930-7956. We have agents to help you better understand your Medicare Supplement options.
If you find that Medigap Plan G is still out of your price range, we suggest you consider a Medicare Advantage plan.