When is Medicare Supplement Plan G (Medigap Plan G) the right choice?

The recently published Medicare Supplement statistics confirmed that Medigap Plan F is the most popular of all plans. More than five million people are enrolled in Plan F, and its market share is 52.8%. Despite only 452,782 people enroll in Medicare Supplement Plan G (Medigap Plan G) and that its market share (4.7%) is much lower than Plan F, Plan G one of the fastest growing Medigap plans.  Its recent percent change for the period of 2011-2012 was 27% versus 10% for Plan F. What made Plan G so appealing recently?

When Medicare Supplement Plan G (Medigap Plan G) is preferable to Plan F

The historical popularity of Plan F is easy to explain. This is the only plan in which ALL Medicare ‘gaps’ are covered. It is very convenient: once you’ve paid the premium, there is no need to be concerned about any out-of-pocket expenses.

Medigap Plan G, also known as Medicare Supplement Plan G, is VERY SIMILAR to Plan F with one exception – it does not cover the annual Medicare Part B Deductible. For 2013 the deductible is $147, but this deductible is subject to change annually. Just like all Medigap plans, Plan G is standardized, and its benefits are the same for all insurance companies offering the plan. (Only 50% of companies offer Plan G vs. 84% of companies that offer Plan F).

Because of the extra benefit, the Plan’s F premium is always higher than the premium for Plan G. The premiums of the plans may differ significantly among different companies. Based exclusively on premium, if the difference between plan F and G premiums exceeds the Part B deductible, it makes sense to go with Plan G. For 2013, the magic number is $147 per year, or $12.25 per month.

Also, annual premium increases of Medigap Plan F are higher than for Medigap Plan G. One of the reasons is that Plan G is NOT on the list of Medigap plans offered under Guaranteed Issue Rights. Therefore, people with Plan G are, in general, healthier than people enrolled in Plan F.

Despite all of the above, for some people the convenience of Plan F will always be the deciding factor.

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