Although there are 10 different Medicare Supplement Plans (letters A-N) that are available to consumers, the majority of seniors have either Plan F, Plan G, or Plan N due to their combination of cost efficiency and comprehensive and simple to understand benefits.
Plan F is the most popular plan, with about 50% of Medicare Supplement policy holders having this plan. Plan F is often referred to as the “Cadillac Plan” because it is the most comprehensive in terms of the benefits it offers, since it covers every deductible, copay, and coinsurance that Original Medicare leaves you with. This means you will have zero out-of-pocket liability for all of your benefits under Medicare Part A and Part B, which also gives it the most convenient and simplified experience since there will never be any out of pocket bills that will be sent to you.
Plan G is often considered the best value and most practical plan since it has all the same benefits as Plan F except that, in exchange for a lower premium, it does not cover one small deductible that Medicare leaves you with- your once-a-year Part B deductible of $147 a year. This means that, with Plan G, your first $147 of healthcare costs that fall under Medicare Part B will have to be paid out of pocket, since it will not be covered by Medicare or your Medicare Supplement plan. Once this deductible is met your Plan G will operate exactly like Plan F, with all other deductibles, copays, and coinsurance being covered by your Medicare Supplement plan. Because Plan G leaves the plan holder with this small piece of cost sharing of the once a year Part B Deductible, Plan G will have a lower monthly premium than Plan F, which usually saves more than enough to make up for the out of pocket cost.
For an even lower premium plan that still accomplishes the main features that Medicare Supplements are designed for – protection from high out of pocket costs and uncertainty, clear benefits and ability to budget, lack of confusion and inconvenience of handling complex bills, and access to your own choice of doctors, hospitals, and healthcare providers- Plan N has become an increasingly popular choice.
Like Plan G, Plan N also leaves the plan holder with the once a year Part B deductible but also includes an additional $20 copay for doctors office visits, $50 copay for emergency room visits, and also does not cover what is known as Part B excess charges. Part B excess charges are if a doctor does not accept Medicare assignment, then they can charge an "excess" over and above what Medicare Part B pays, in the amount of up to 15%, depending on which state you are in. So, for example, if you have a certain medical test or procedure, and Medicare determines that the reasonable and approved fee is $500, a provider that does not accept Medicare assignment can charge up to 15% in excess, or an additional $75. If you have Plan N, which does not cover this potential excess charge, you would be responsible for that additional $75.
All supplement insurance companies pay claims the same way, and most pay them electronically so you do not have to file any claims yourself.
In General, the top three plans can be summed up as follows:
Option 1 - Medigap Plan F- Most Comprehensive and Convenient
• Most comprehensive coverage- 100% coverage of Medicare Part A and B out-of-pocket gaps
• Most Popular – Almost 50% of Medicare Supplement Policyholders have this plan
• Easiest to Understand
• No deductibles, co-pays, or coinsurance- so no out of pocket at all
• Choose any doctor or hospital that accepts Medicare
• Most Expensive but most predictable and convenient since there is zero out of pocket
Option 2 - Medigap Plan G - Best Value and Most Practical
• Same exact coverage as Plan F except for no coverage of annual Medicare Part B Deductible
• Plan member pays the once-a-year Medicare Part B Deductible ($147 in 2015) when services are received
• No other co-pays or coinsurance
• Choose any doctor or hospital that accepts Medicare
• Lower Monthly Price than Plan F and Lowest Annual Net Cost
Option 3 - Medigap Plan N - Lowest Price but More Cost Sharing
• All major gaps covered but 4 potential sources of out of pocket expenses
• Plan member pays the once-a-year Medicare Part B Deductible ($147 in 2015)
• Plan member pays $20 co-pay for doctor visits, and $50 co-pay for emergency visits
• Plan member is responsible for Part B excess charges (up to 15%) if doctor doesn’t take assignment
• Choose any doctor or hospital that accepts Medicare
• You take on more cost sharing through small copays and deductibles in return for lower premiums
