Medicare Plan G is a supplement insurance policy that helps pay for the gaps in coverage left by deductibles, coinsurance, and copayments. The costs of Plan G can vary.
Medicare is a federally funded insurance plan. It covers people who are aged 65 and older. Younger people with specified health conditions may also qualify.
There are two parts to original Medicare. Part A pays for hospital care. Part B pays for doctor visits and other outpatient services.
Both parts A and B have associated deductibles, coinsurance, and copayments. Plan G helps with these expenses.
In this article, we discuss Medicare supplement plans, including Medicare Plan G, and its costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare supplement insurance is also called Medigap.
There are several types of Medigap policies, including Medigap Plan G, and in addition to covering deductibles, coinsurance, and copayments, the policies may offer benefits not provided by original Medicare.
For example, some Medigap policies cover emergency healthcare that may be needed when traveling outside of the United States.
To have a Medigap policy a person must have Medicare parts A and B.
Medicare Advantage plans are also known as Part C, and they combine the benefits of original Medicare with other optional extras.
If a person has a Medicare Advantage plan, they cannot have a Medigap policy at the same time. It is illegal for a company to offer a Medigap plan to someone they know is already enrolled in Medicare Advantage.
Private companies sell Medigap policies, and because of this, costs, including the premiums for Plan G, can vary.
The premiums can be set in many ways, but there are three main ways companies could determine prices, including:
- Community-rated, in which all beneficiaries pay the same premium no matter their age. Prices may change based on inflation or other factors
- Issue-age-rated, which means the age of a person when they buy the policy will determine the price. The premium may go up for other reasons, but not because of age
- Attained-age-rated, for which the premium will go up as a person gets older. They are the least expensive initially but become the most costly as a person gets older
Other pricing factors to consider may be:
- Discounts: Some policies offer discounts, such as for people who do not smoke, are married, pay yearly, or use specific payment methods
- Medical underwriting: Underwriting is used when a person delays enrollment. This is an evaluation of risk based on a person’s medical history that may affect the cost
- Specific benefits: A person may choose to include a comprehensive set of benefits that may affect the price of the plan
Medigap policies must follow federal and state laws as well as offer the same basic benefits. State laws affect which plans are available in a person’s area.
Some companies choose to offer more benefits than others, and a person may like to compare policies offered in their state to ensure they can get a plan to suit their needs.
Medigap plan types
There are ten Medigap policies that are named by letters A, B, C, D, F, G, K, L, M, N. The standard benefits the policies may cover include:
- Part A deductible
- Part A coinsurance and hospital costs up to 365 days after Medicare benefits have been used in full
- Part A hospice coinsurance or copayment
- Part B coinsurance or copayment
- the first 3 pints of blood a person may need
Medigap plans C and F also cover the Medicare Part B deductible, but starting January 1, 2020, these plans are no longer available to those newly eligible for Medicare.
If a person already has a Medigap plan that includes coverage for the Part B deductible, they may keep it.
Medigap Plan G covers many of the benefit options of the discontinued Plan F, making it a popular alternative. This table shows the primary Plan G benefits:
|Is it covered?
|Part A deductible
|Part A coinsurance and hospital costs
|Part A coinsurance or copayment for hospice
|Part A coinsurance for skilled nursing facility care
|Part B deductible
|Part B coinsurance or copayment
|Part B excess charge
|blood, first 3 pints
|emergency treatment required during foreign travel
Medicare recommends four steps for helping decide on a Medigap plan that is suitable for an individual’s needs and circumstances.
- Consider. A person may decide upon the benefits they need by considering their current healthcare needs.
- Research. An individual may like to research the companies that sell Medigap policies in their state. Local plans will display when using the Find a Medigap policy search tool. The State Health Insurance Assistance Program (SHIP) can also offer advice either online or by phone.
- Learn. By learning about the companies and the costs of their policies, a person can feel confident they are making an informed decision for their healthcare.
- Apply. Individuals should apply for a Medigap plan directly with the private insurance company that they feel meets their needs.
Medicare Plan G is a Medigap policy that covers “gaps” in Medicare benefits left by coinsurance, copayments, and deductibles.
Medigap policies are sold by private companies who can cover the same benefits but charge different amounts.
Medicare Plan G premiums are set in one of three ways but will vary between insurers. The way the company decides the premium will affect the cost for as long as a person has a policy.
It can be valuable for a person to research and compare options when choosing a Medigap policy.
Help is available from the State Health Insurance Assistance Program (SHIP) when looking for the best plan for an individual’s needs and circumstances.