Medicare Supplement Plans, also known as Medigap Plans, are designed to fill in the gaps between what a person is billed for a medical service and what Medicare actually pays. Medicare has deductibles for both Part A (Inpatient Care) and Part B (Outpatient Care) that some of these plans pay. On Outpatient Care, Medicare typically pays 80% of the allowable charge for services and many of these plans pay the other 20%. Some doctors charge over the Medicare Approved Amount for some services and a few of the plans even pay for that balance. Many of the plans also offer some type of coverage out of the country which is nice for travelers since Medicare itself offers no out of country coverage. As you can guess by my frequent use of the words “some” and a “few”, there are differences between the plans and of course differences in the premiums.
A number of years ago the federal government standardized Medicare Supplement policies into several lettered plans (ie: Plan A, Plan C, etc). This was done so that consumers could more easily choose between several companies offering Supplement plans. Nowadays a person looking at a Plan F from three different companies can have the confidence that with only minor possible differences, they are basically looking at the same plan. That way their choice is narrowed down to one of confidence in the company offering the plan and, of course, premium.
What is the “best” Medicare Supplement Plan?
Plan F has long been the “gold standard” for Supplements because it not only picks up both Part A and B deductibles and pays the other 20% mentioned above, it also picks up any balances left over in the case of providers who charge more than the amount allowed by Medicare. That said, this particular plan is going away! In 2020 the Federal Government will no longer allow any Supplement plan to be sold to new Medicare beneficiaries that pays the Plan B deductible as a benefit. (In 2016, that deductible is $166) Those people who are already on a Plan F will be allowed to keep them, but since there will be no new people coming in to those plans the expectation is that the premium on Plan F Supplements will begin to rise faster than other plans. Plan G is a viable alternative because it does everything mentioned above that Plan F does except that it does not pay the Part B deductible.
Outlook for 2017
Although there are ten different lettered Medicare Supplement plans allowed by the federal government, the fact is that most policies purchased fall into only two or three of the choices available. There is certainly plenty of companies for consumers to choose from. For instance, the official website Medicare.gov lists over forty companies selling Plan F in our area! If you are a do-it-yourself type of person, the very best place to start your research is Medicare.gov. On the other hand, if you prefer some help seek out an experienced agent that specializes in this particular field. You can set up an appointment with me by phoning (208) 263-2194 or by using the Contact Form. Finally, don’t forget to check for shopping tips on the How to Shop page.