Medicare Supplements: Plan F vs. Plan G
Even though the Board of Trustees has recently announced that the Medicare Part B annual deductible is increasing by twelve dollars to $197, I am still recommending the Medicare Supplement Plan G as the most cost-effective Medicare Supplement plan over the Plan F for 2020.
Some basic information, for those of you that don’t know, Plan F and Plan G are Medicare Supplements. They are designed to work with your Medicare, so Medicare pays 80% of your medical bills and the supplement would come in and pay the rest. The Plan F is the “Full Coverage” plan. It covers the 20% completely. You have no bills except for your monthly premium. The Plan G is almost exactly the same as the Plan F, the only difference is that the Plan G doesn’t pay Medicare’s Part B annual deductible of $197.00. After you meet that deductible, you have no medical bills, everything is covered just like Plan F. The average cost of the Plan F is $600 more a year in premiums than the Plan G. If the only difference in coverage is Medicare’s Part B annual deductible of $197, why would you pay an insurance company $600 more a year for them to only pay $197 on your behalf? It doesn’t make any sense. This is why I recommend the Plan G over the Plan F as the most cost-effective Medicare Supplement plan.
Let’s look at this from the Insurance Carrier’s point of view: Imagine that Plan F and Plan G both have one million people in each plan and the Part B deductible increases by $12.00. The Plan F is now going to have to pay an additional $12 million out of their budget to cover the deductible increase for their clients. However, the one million people in the Plan G all pay their own deductible so the insurance company is not going to have to pay any more money for their clients in the Plan G to cover that deductible increase because all of those clients already pay their own deductible. In this situation, it’s much more likely that the Plan F is going to see the more significant premium increase to make up for the $12 million increase.
Now let’s look at it from the consumer point of view: it will be a much better option for the consumer to continue to pay for their own deductible with the Plan G rather than paying the adjusted rates of the Plan F because it’s costing them more and more money to insure people as these deductibles increase.
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