A lot of people new to Medicare will come to see me already having done some homework. They have a pretty good idea of how Medicare works and understand the difference in Original Medicare and Medicare Advantage. They might have even decided on which Medicare supplement they want. That supplement is almost always the Plan F. They have made this choice based on one fact – the plan F pays it all. For Medicare approved visits and procedures, Plan F will pay 100% of your share of the bill. And that is where the homework stopped. They didn’t investigate the other plans such as the Plan G.
The Plan G pays everything except for the Medicare Part B deductible, which as of the date of this writing, is $183 annually. The ONLY difference between a Plan F and a Plan G is a $183 annual deductible.
Lets look at an example:
John goes for a checkup and blood work with his cardiologist on January 1st. The doctor bills $200 for the visit and EKG, and the lab bills $175 for the bloodwork. The total bill is $375. John has a Plan F supplement, so he pays nothing out of pocket for the visit but his monthly premium for the plan is $145 or $1740.00 per year. The plan F pays the first $183 – the deductible, leaving $192. Then Medicare pays their 80% share – $153.60. Finally, John’s Plan F pays John’s 20% share – $38.40. Has no other office or hospital visits for the rest of the year, and he is a happy camper.
Total Bill $375
Part B Deductible $183 Paid by Supplement
Part B 80% $153.60 Paid by Medicare
Part B 20% $38.40 Paid By Supplement
Total Paid $375
Total out of pocket $0.00 Paid by John
Plan F premium $1740.00
Total annual expenses for John $1740.00 He is only out his premium. Now lets look at another example: Laura goes for her well-woman checkup in January. Her total bill is $375. Laura has a Medicare supplement plan G and she pays $105 per month premium. Since the plan G does not pay the Part B deductibe, that will come out of Laura’s pocket – $183. Next, Medicare pays their 80% share – $153.60. Then, Laura’s Plan G pays her 20% share of $38.40. She has one more office visit in June and is billed $75 for that visit. Medicare pays 80% – $60 and Plan G pays 20% – $15.
Total Bill $450
Part B Deductible $183 Paid by Laura
Part B 80% $213.60 Paid by Medicare
Part B 20% $53.40 Paid By Supplement
Total Paid $450
Total out of pocket $183.00 Paid by Laura
Plan G premium $1260.00 Paid by Laura
Total Laura paid during the year including premium and deductible – $1443.00. That means that just because Laura chose to pay the deductible herself rather than paying an insurance company to do it, she saved $297 over what John paid.
Plan F almost always costs you more than the deductible. And, because it costs more, agents get paid more to sell it. Any agent that recommends a plan F over a Plan G either is not allowed to sell the Plan G because they are a captive agent, or they simply do not have your best interest at heart.
Laura sought the advice of a good, independent broker, John did not.