How to Choose The Right Plan
One of the most common questions we receive at Medicare Hero on a daily basis is what is the best Medicare Supplement Plan? If you’re wondering the same thing, we’ll cover everything you need to know in this article when it comes to choosing a Medigap plan that is right for you.
The two most popular Medigap Plans for 2020 is Plan G and Plan N. The most comprehensive plan out of the 10 Medicare Supplement Plans is Plan G, as it offers the highest level of coverage. We’ll take a deeper dive into the specifics of each plan, and what to consider when choosing a plan that works best for you, but first let’s understand the basics of Medicare Supplement Plans.
Understanding The Basics
There are two main key points about Medicare Supplement Plans that are first important to understand:
- #1 – There are no networks for Medicare Supplement Plans. This means that you can use any doctor or any hospital in the country that accepts Medicare, regardless of which of Medicare Supplement Plan you choose. Additionally, there are no referrals required. Meaning you can see any doctor without any doctor referrals to see them.
- #2 – All Medicare Supplement Plans are standardized. Meaning that every insurance company must offer identical coverage. For example, Plan G offered by Company A, is the exactly the same as Plan G offered by Company B. The coverage is exactly the same, no matter which company you choose. So you might be asking yourself… So then what’s the difference between companies? The difference is the price you pay.
So, What's the Difference in Coverage?
After Plan F was phased out in the beginning of 2020, now Plan G offers the highest level of Medicare coverage for 2020. Plan G covers 100% of all costs Medicare leaves behind besides one thing; which is the Medicare Part B deductible of $198. After this deductible is met, all your cost-sharing expenses will be met for the rest of the year. Let’s specifically take a look between what’s covered in Plan G and Plan F. Take a look at the chart below:
In the chart above, you’ll see there are 4 key things to pay attention to for both Plan G and Plan N. Let’s break it down and explain what this means for both plans:
- Medicare Part B Deductible: For both Plan G and Plan N, there is a small deductible of $198 that you pay each year. So essentially, when you go to the doctor the first time in the beginning of the year, you will have to pay this $198 deductible. Once this is met, all Medicare expenses are covered under Plan G. Now, with Plan N, there will be a few additional out-of-pocket expenses you will have to pay, which we’ll cover next.
- Doctor Visit Copay: As you can tell from looking at the chart, all doctor visit copays will be 100% covered by Plan G. On the other hand, with Plan N, there is a $20 copay for every doctor visit you go to. So, ultimately, if you are a person that visits the doctor frequently, this could definitely add up over the course of a year.
- Emergency Room Visit Copay: Just like the doctor visits, if you chose Plan G, there will be no additional copays for unexpected ER visits. However, with Plan N, there will be a $50 copay every ER visit.
- Medicare Part B Excess Charges: This is one of the most important coverage differences between the two plans that could potentially cost you a lot more in medical bills than expected. So Plan N does not cover any excess charges, while Plan G does. So what this means if you choose Plan N is that medical providers can send you a balance bill if that provider does not accept Medicare’s assigned rates. They can bill you up to 15% more than Medicare’s allowed rates. This can get very expensive if you aren’t careful.
Excess Charges Explained
So here’s how excess charges work… Doctors who do not accept something called “Medicare Assignment” are allowed to charge you an extra 15% on top of the Medicare approved amount. Medicare Assignment is basically a “fee schedule” or “agreement” between Medicare and a doctor. Accepting assignment by a doctor, means that your doctor agrees to the payment terms set forth by Medicare. Now it’s important to note that 93% of all doctors in the United States accept Medicare Assignment, but if your doctor is one of those who does not accept Medicare Assignment, then Medicare allows them to bill an extra 15% on top of the bill straight to you. As mentioned above, Plan G covers those excess charges while Plan N does not. So you might be asking yourself of the 7% of doctors that don’t accept assignment, are typically high-end specialist, surgeons, etc. so that 15% is typically tacked on a pretty expensive bill. So although it’s rare to be hit with an excess charge, when you do, it’s typically a substantial amount.
Be sure to always ask your doctor, especially if it’s a specialist doctor… “Do you accept Medicare Assignment?” this is the only way to avoid being hit with those excess charges. But remember, this is only applicable if you choose Plan N. If you have Plan G, you won’t have to worry about excess charges since they are covered.
What Are My Rates Based On?
The rates for Medicare Supplement don’t just vary from company to company; plan rates also vary tremendously across the United States, and more importantly, from person to person. Medigap Rates are typically based on the following:
Let's Talk Numbers
You might be wondering what the difference in cost for Plan G and Plan N; as that can be a great factor for which plan you choose. Since Plan N does not provide the same amount of coverage as Plan G, clearly you will have a lower monthly premium with Plan N. However, the difference in cost is very minor. In most cases, you’ll save an average of $15 – $30 per month with Plan N. It can vary based on the state you live in, but typically we see an average of $15 – $30 in savings. To see a real life example and get a behind the scenes look at the quoting software we use, click on this video HERE.
So Which Plan Provides The Best Value?
In our opinion, Plan G is the most valuable Medicare Supplement Plan available. It gives you the most coverage, and doesn’t save you a substantial amount when compared to Plan N. However, if you’re someone who doesn’t visit the doctor often, or plan to in the future, and overall you’re a really healthy person, this might be a good choice for you. Also, if you’re on a really tight budget.
However, if you only went to the doctor once a month, with that $20 co-pay that’s going to pretty much discount the savings in premiums that you would have with Plan N and it still leaves you exposed with the ER copay and the excess charges that you might incur.
Even if you go to the doctor a few times a year, we typically see Plan G providing the best value. Because, for even for $15 – $30 more, you don’t have to worry about any unexpected out-of-pocket expenses for any Medicare services, other than that $198 deductible.