Plan A or G or F or N – The Alphabet Soup of Medicare Plans
Understanding the real differences between the different Medicare supplement plans can save you thousands a year, year after year. Take 5 minutes to read this article and learn a little before you buy a plan.
Medicare supplements plans were simplified by the government years ago. The idea was to make sure that every company that sold Medicare supplements had the same exact plans. This way you only have to shop for price and to some extent to make sure you are using a well rated company.
They assigned letters (A to N) to describe different bundles of benefits. The idea was that by applying a letter to a particular set of benefits and making sure that every insurance company in each state had the same benefits assigned to the same letter, it would make the selection process a piece of cake.
MEDICARE SUPP BUYER’S TIP: It does not matter which company you purchase your plan from. An “F” or “G” plan from one company is exactly the same as an an “F” or “G” plan from another company. The only thing you will find different is that one charges more than the other. We have the lowest premiums and A+ rated plans.
The letter designations was a good idea and it does help a lot. But it still left you staring at a chart with letters across the top and columns of benefits listed below each one that you had to decipher. You had to know what each benefit means and then calculate what is the best balance of cost versus benefits. It sounds simple but in practice it can drive you crazy.
You might think that when they assigned the letters there would be some method to it. Maybe an A plan is better than a B plan and so forth. Nope, it does not work that way. An “A” plan has fewer benefits than an “F” plan which is better than an “N” plan. There is no rhyme or reason to the letters.
To add to this problem you have a limited amount of time to make your choice. All the while knowing that you cannot change your supplement in the future without some serious repercussions.
Once again you need to remember that no matter which company you select, a plan with the same letter will be exactly the same. They do not offer different benefits from each other.
We keep talking about these plans in an abstract way but it might be helpful for you to look at the chart below for a moment. Don’t worry about what the different benefits are yet. That will be explained shortly.
What I do want you to notice is that:
The plans have minor differences and all of them cover the coinsurance hospital charges that medicare does not. That is the line that says “Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up”
Almost all of them completely cover the 20% of outpatient visits that medicare does not cover. That is the line that says “Part B coinsurance or copayment”.
Just about any one of these annuities would provide fairly good protection from catastrophic loss and fill in nicely for the holes in Medicare. But clearly there are some that will pay for expenses or lower your out of pocket costs better than others.
Are they worth the extra cost? I can only offer my opinion. But we should go through the chart a little further. Understanding it is the key to understanding Medicare and Medicare supplements. I am going to simplify things for you by telling you that I do not sell the K or L plans. It gets to a point where the you need to select a few and make comparisons from those plans. The very subtle differences between some of these plans can make you nuts.
So, let’s lay down some rules on what we positively want in our supplement plan.
Part A coinsurance – definitely and all the plans have it.
Part B coinsurance – all the plans cover it but some not completely. So I am tossing K and L.
Part A Hospice care coinsurance and copayment – all the plans left have it so no problem.
Skilled Nursing Care – I want this in my plan so A and B are out as well.
This leaves C, D, F, G and N.
Which plan you pick at this point will depend to an extent on the insurance carrier. They get a little sneaky and make the premiums for some plans artificially high. For example the carrier we represent charges more for a C plan than an F. Makes no sense really.
* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,240 in 2018 ($2,300 in 2019) before your Medigap plan pays anything.
** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.
Starting January 1, 2020, Medigap plans sold to new people with Medicare won’t be allowed to cover the Part B deductible. Because of this, Plans C and F will no longer be available to people new to Medicare starting on January 1, 2020. If you already have either of these 2 plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans