Medicare Supplement Plan G is one of the most robust of the ten Medigap options. While some who talk about Medicare coverage options such as Medicare Part G joke about supposed lack of medical coverage, the Plan G option is far from laughable. For those who want to reduce their out-of-pocket costs beyond what Medicare Parts A and B cover, Medigap Plan G might well be a wise choice.
What is Medicare Part G? What Does Plan G Cover?
As with any Medicare Supplement Plan G helps defray health care costs not paid by Medicare Parts A and B. While each of the various insurance carriers offering Plan G creates its own package of perks, some benefits are standard to all.
Plan G medicare coverage includes:
- Co-insurance costs for up to 365 days of a hospital stay after Medicare Part A runs out.
- Part A deductible. In 2017, that cost is $1,316.
- Part B co-insurance or co-pay. Once the Part B deductible has been met, this co-pay is 20 percent of the Medicare-approved costs for physician services during an inpatient hospital stay, durable medical equipment, and outpatient therapy.
- Excess charge for Part B. When physicians charge legally-allowed fees higher than what Medicare is authorized to pay, this perk pays the difference. However, the federal government mandates that doctors can only charge 15 percent in excess of what Medicare has approved for the service or procedure. As example, a senior is having surgery to alleviate varicose veins. Medicare has determined that the customary and reasonable fee for this procedure is $1,800. The physician performing the procedure, if unwilling to settle for this $1,800 as full payment, would only be allowed to charge an additional $270 ($1800 x .15), for a total fee of $2,070. Plan G would pay this additional $270.
- Co-insurance fee for hospice care provided through Part A
- Co-insurance for a stay in a skilled nursing facility
- 80 percent of the cost of emergency care while traveling outside the United States. The only qualifier is that the care take place within the first 60 days of the overseas travel.
Why choose Medicare Supplement Plan G ?
This Medigap plan is one of only two supplements that pay Part B excess charges – fees that can be considerable for those who have chronic health maintenance needs or costly surgeries. The alternate choice for this coverage is Plan F, which , unlike Plan G, pays the Part B deductible. Plan F monthly premiums are greater, however. Deciding between the two must take into account availability in the senior’s residing state. While the U.S. federal government requires that each insurance carrier selling Medicare Supplements must offer Plan F, it has no such requirement for Plan G. Thus, Plan G may be harder to find, with fewer carrier and monthly premium choices.
Let’s study examples:
In Houston, Texas, four insurance carriers offer both Plans F and G. These are Gerber Life Insurance Company, GPM Life and Health Insurance Company, Humana, and United World Life Insurance Company. We compared rates for a 65-year-old male. Without exception, Plan F monthly premiums exceeded Plan G.
As example, the estimated monthly premium for GPM ‘s Plan G is $130.62; for its Plan F the premium is $174.83. A Texas senior using annual cost as criteria for a decision on whether to purchase Plan F or Plan G would find Plan G the best choice. The math looks like this: Plan F premium of $174.83 minus Plan G premium of $130.62 equals a savings of $530.52 annually ( or $44.21 monthly.) The only benefit derived from Plan F coverage as opposed to Plan G is the Plan B deductible payment (in 2017, $183 annually.) A senior opting for Plan G would then save $347.52 in 2017 ($530.52 minus $183.)
In considering Plan G over the nine other Medicare Supplemental insurance plans, the two primary factors are:
- Whether Plan B excess charges are anticipated. That is, if the insured anticipates multiple or high-cost medical procedures by physicians who typically charge more than the allowed Medicare fees. If the answer is yes, the choice narrows to either Plan F or Plan G.
- If, after a mathematical comparison of medicare supplemental Plans F and Plan G premiums in the insured’s state, the cost difference exceeds the annual Plan B deductible, Medicare G is the best choice.