Joanne: Every year we seem to talk about plan F versus plan G versus plan N, but when you look at all of the Medigap plan letters and their different coverages, is it possible to find out which one is best for you? Well, in today's episode, we'll find out.

Cameron: But as always, before we start, my name is Cameron Giardini and together with my cohost, Joanne Giardini-Russell, we operate Giardini Medicare, which is an independent insurance agency based out of Southeast Michigan.

Although we are based in Michigan, we do work virtually over the phone to directly help consumers and about. to find the right Medicare coverage for them. If we do not work in your state, we will connect you with another trusted independent agent who will be able to help you find the right coverage that you want.

We also now have a free online course that is available for you and you can register for this online by going to gmedcourse.com. This will let you look at any Medicare topic you want at your own pace. So make sure to check that out after you listen to this episode. So, a brief overview of today's episode, we will talk about first an overview of what Medigap plans are, and they are also known as Medicare supplements.

This is just a general reminder before we kick things off. We will talk about the most popular Medigap plan letters and who they may be right or wrong for. We will talk about the other less popular Medigap plans. and other is in quotations here because they kind of get left out. So we're going to highlight those a little bit today.

And then lastly, we'll talk about the long-term effects of picking the right Medigap coverage. And Joanne, we'll start things off with a brief overview of what Medigap plans are. 

Joanne: So, according to CMS, a Medicare supplement, which we again are referring to as Medigap, is a policy that is health insurance.

Sold by private insurance companies to fill the gaps. So, Medigap policies help pay some of the healthcare costs that Original Medicare doesn't cover. Again, fill the gaps, thus we call it Medigap. These plans provide secondary coverage to Original Medicare, which does remain as your primary coverage.

These are very different from Medicare Advantage plans, which we discuss in other episodes, so just keep that in mind, please. Now, when it comes to choosing a Medigap plan that is right for you during your Medicare journey, we often get the same question from the people that we talk to each day. And that question is, well, which Medigap plan is best for me?

Now, this is seemingly a daunting question since there are currently 10 different standardized Medigap plans that are identified by different plan letters and they range from plan A to plan N. Now, again, each plan letter is standardized, but they can vary based on different items such as price. Now, we know this episode is about discussing and crowning the best Medigap plan in 2024.

But in reality, in the Medigap world, although there are different plan letters with the most coverage compared to the rest. But this does not make them the right option for everyone and the plan that you feel is best for you will very likely be different from the one that one of your peers feels is best for them.

So there are Medigap plans that we do think are better than others and we will talk about the details for each of these but it doesn't matter if you don't personally like what the plan has to offer. For example, you may just want to have as much coverage as possible with no surprises and you're okay paying more for that particular coverage, or you might be looking for more of a value and you're okay with some of the potential unknowns or additional out of pocket costs that are associated with the seemingly better value plans.

Cameron: Yeah, exactly. So we're going to Pretty much break these down by plan letter as Joanne mentioned they are standardized So plan F with one company for example has the same standard or same basic benefits as plan F with another company But we're gonna go through the different most popular plan letters and some of the less popular plan letters and talk about again who they might Be right or wrong for and of course, we have to start with plan F who my plan F be right for.

So plan F first off, was once commonly referred to as the quote-unquote "Cadillac" of Medigap plans. And the reason it was called this is because it offered the highest level of coverage. And it still does undoubtedly. Provide the most coverage of all the currently available Medigap plans since it essentially covers all remaining Original Medicare out-of-pocket costs leaving you with no deductibles or out-of-pocket costs for Medicare-covered services But does that mean that it should be the go-to easy option for anyone making their transition to Medicare?

As we will talk about, the answer to that question is almost certainly no. First off, many of you listening to this episode, are likely not even eligible for Plan F or to enroll in Plan F. To be eligible for a Medigap Plan F, you must first be eligible for Medicare before January 1st, 2020. So if you turned 65 or first became eligible for Medicare on or after January 1st, 2020, you are not eligible to enroll in Plan F.

There are generally two main reasons overall, even if you are eligible for Plan F,  why we do not recommend it. Now, the reason one is that when you compare the costs and coverage of Plan F to Plan G, which we will talk about, The only thing that separates Plan G from Plan F is the fact that Plan F covers and therefore does not make you pay the yearly Part B deductible, which is $240 in 2024.

So again, with Plan G you would have to pay that deductible out of pocket, Plan F the insurance company covers it for you. But when we compare the premiums for Plan F versus a Plan G, for example, in Michigan, for someone turning 65, a Plan F, it's about $160 per month, and a Plan G, it's more around $130 per month. So this, just doing the easy math, gets us a difference of $360 for the year, which, as you can tell, is more than the actual amount you would spend on the Part B deductible.

So again, the Plan F premium difference compared to Plan G, is higher than the Part B deductible. So you're paying a premium to the insurance company for them to cover that deductible for you. You're not saving money overall. And now number two, why we don't recommend Plan F is because there are typically higher potential rates of premium increases with Plan F in our opinion, this is more of a compelling reason really than anything for not choosing Plan F. 

All Medigap premiums will increase over time. We talk about that in other episodes in more detail, but the goal is to find the plan with hopefully lower premium increases. So it does not become unaffordable quickly. However, Plan F is not available. Again, to newly eligible beneficiaries. So on average with Plan F, you're more likely to have a higher percentage of consumers with more health needs, which directly relates to higher premium increases in the future.

This is because they do not have younger 65-year-olds who on average probably have less health needs and health conditions. They are not enrolling in plan F because they're not eligible for it. This just causes that cycle of potential rate increases in the future. Now just a quick note, Plan F, may still be the right option for you if you have to use guaranteed issue rights for Medigap in some cases.

If you're not familiar with those, you can always look it up on Medicare.gov, but it's just limited situations where you are guaranteed to get a Medigap plan without health questions, and this may be limited to a Plan F based on when you're eligible for Medicare. 

Joanne: I'm glad you pointed that out and put that in there because sometimes people will hear our podcasts and their current clients and they say well wait you gave me a plan F after we just discussed that if you're leaving the employer coverage you might have to use guarantee issue which gets pretty technical and we won't discuss that but you might have to do plan F to be able to get what you get a Medigap plan.

Cameron: Yeah, it's better to avoid if possible, but not at all costs. 

Joanne: So let's flip over to who plan G is. for. So, if you're not eligible for Plan F, Medigap Plan G is now the current Medigap Plan available with the highest level of coverage, kind of the new Cadillac. And like we just talked about, it's likely a better value than Plan F, even if you are eligible for that Plan F.

So again, Plan G covers all out-of-pocket costs that are left by Original Medicare. However, you do have to satisfy the Part B deductible. And that is currently $240 in 2024, and it will increase going forward. 

Joanne: Just a reminder, it will increase, it has increased and that is the Part B deductible. It's not the Medigap plan deductible.

People often think it's part of the insurance company. It's not. It's the Medicare Part B deductible. Again, $240 this year. So who is Plan G potentially, right? For? Well, it's good for those who want the highest level of Medigap coverage for a slightly better value than Plan F. And for those people that have more health care needs, such as multiple visits to primary care doctor specialists, and they're going, you know, to a lot of doctor's visits throughout the year.

Or simply, it's for people who are just okay paying higher premium amounts to avoid the potential of having to pay co-pays. or any Part B excess charges. There are a lot of people who just are okay with paying a higher premium. So who is Plan G potentially wrong for? Well, Plan G might not be the right Medigap plan letter for people who are the opposite of what we just mentioned.

So if you're someone who doesn't visit doctor's offices frequently, you're not using a lot of medical care, or you're someone who just would rather save money on your monthly premiums in exchange for being exposed to some added out-of-pocket potential costs like co-pays, And Medicare Part B excess charges, well, there might be other alternative plan letters to consider that.

Now, you might be thinking that Plan G is the way to go for Medigap coverage since it provides excellent coverage similar to Plan F, but has slightly lower premiums to make it a better value, quote unquote. However, there's another plan letter that we think should be in the running for the top Medigap plans of 2024, which we're going to talk about next.

Cameron: And this might not come as a surprise to anyone who's listened to our other episodes or watched any of our videos on YouTube or TikTok, but the better value plan Joanne just talked about is Plan N. In our opinion, perhaps the best value plan in the Medigap space right now is the Medigap plan N. Plan G versus Plan N is generally the biggest debate when it comes to Medigap plans, even more so than Plan F versus Plan G like it used to be.

So we will highlight who might find Plan N to be the right plan for them and who might not want Plan N. So who is Plan N potentially right for? Well, if you are looking to save money on your monthly premiums without sacrificing much as far as coverage goes, Plan N could certainly be an excellent option, especially if you don't visit the doctors on a very regular basis.

We discuss the coverage differences in much more detail in our plan N versus plan G episode. So make sure to check that out and listen to that as well. But for examples of premium differences between the two. Again, in Michigan, for example, Plan G would be about $130 per month for someone turning 65, while Plan N might be $100 per month, which is a $30 per month difference, pretty big.

Now, who is the Plan N potentially not right for? Again, this is essentially the opposite of who it might be right for, but Plan N, might not make financial sense for anyone who is going very frequently for doctor visits, or even for ER visits, and we are not saying that if you go to one visit every couple months, that it's going to be a wrong plan for you, but more if you expect to go to the doctor's once or even twice per month, as you may know, with plan and you may pay up to a $20 copay per doctor office visit and a $50 copay for an ER visit if you are not admitted.

Also, we have many clients with few healthcare needs that simply just do not want to deal with copays or potential excess charges regardless of how rare they are. So again, Joanne already mentioned this, But it's all going to come down to preference. You might say I've had copays my whole life. I just don't want to deal with it.

I'd much rather pay more for Plan G I'll skip the better value potentially with Plan N. I just don't want that part of my coverage to exist. 

Joanne: Or, "I've had co-pays my entire life for 45 years and I'm okay with that".

Cameron: So, I'll continue with the Plan N. Exactly. Yep. And now that we've talked about Plan F versus Plan G versus Plan N, we will discuss the long-term cost impacts of choosing each of those options, but make sure to stick around until the end of the episode for that breakdown.

Joanne: So let's move over to the high deductible plan G. Who might this type of plan be better for, or best for? Moving on from the normal Plan F versus Plan G versus Plan N, we're going to discuss another, it's, it's a less talked about Medigap option, but it does appeal to some consumers. These are high-deductible Medigap plans, and we're going to be discussing here the high deductible plan G, although high deductible Plan F may also be available.

As the name implies, it's a high-deductible Medigap plan. It has much higher deductibles than just the Part B deductible. Currently, this year in 2024, the high deductible plan G has a deductible of $2,800 for the year. This deductible can and will and it does increase every year with last year being $2,700 for example.

The good news for a high deductible Medigap plan is that you don't pay 100 percent of the cost until you meet the $2,800 deductible Instead, you'll still pay Medicare cost-sharing until that deductible is met. What I would suggest is listening to our high deductible episode for more details for the real nitty gritty, but for example, with the high deductible G, you would pay the $240 Part B deductible, and then you're going to pay 20 percent of the cost of Part B services until you reach the $2,800 deductible for the Medicare-covered services.

Hopefully, that makes sense. But again, go dive into our Now, let's talk about who this might be good for. If you're someone who wants the freedom and the flexibility of Original Medicare while paying as little premium as possible, a High Deductible Plan G might be right for you. These plans generally provide the lowest monthly premium of any Medigap plan available, with a 65-year-old in Michigan, as an example, likely able to enroll into a High Deductible Plan G for about 45 per month.

Also, if you're relatively healthy with very few medical needs, high deductible options might be something to consider, although remember that your health can change, of course. Now, who is this wrong for? So if you have a lot of health care needs or you simply hate all out-of-pocket costs and you hate tracking and paying medical bills throughout the year, it's likely not going to be the plan for you.

We often have clients who enroll in these plans to save on premiums. later to turn around and just say, well, I don't like it because it doesn't pay everything, which remember it is done by design for that type of plan. These plans are not designed to do anything until you have paid that $2,800 in 2024, which is the out-of-pocket for that year.

You have to remember that you're sacrificing higher out-of-pocket costs for lower monthly premiums with the high-deductible plan G

Cameron: Exactly. Yeah, It's kind of easy to think about it as the insurance for people who hate insurance. So if that might apply to you, then it's certainly something to consider.

But what about the other Medigap plans or quote-unquote other Medigap plans? Eventually, when you take a look at the chart of Medigap plan letters that are in the Medicare You handbook on page 76, at least in the 2024 edition, you will notice that there are many other plan letters aside from the Plan F, the Plan G, and the Plan N that ourselves and others usually talk about.

So You might ask yourself, well, what about these other plan letters? Why aren't they a good option? And that's exactly what we're going to discuss right now. Currently, we consider the list of these so-called forgotten plans to be A, B, C, D, K, L, and M. You don't have to remember those exactly, but you can always see those on the chart.

Just remember that Plan A and Plan B are not the same as Part B of Medicare and Part A of Medicare. These are actual Medigap plans, which are Plan A and Plan B. For much of this list of plan letters, the reason we simply don't recommend them is that they rarely make financial sense when comparing the premiums and benefits to the other plans that we discussed.

For example, we looked at Austin, Texas. For a 65-year-old male, a Plan D might be $140 per month, which is more than the Plan G cost at $115 per month. Now, if you're looking at that Medigap benefit chart, you might realize that these premium differences, you might find them surprising because Plan G provides more coverage than Plan D.

So again, you're paying less for Plan G. And you're getting more coverage. It just simply works out where a lot of times these plans don't make financial sense. And as another option or another example, you can look at Plan B and Michigan. It would be about $150/month. And plan G, which again has much more coverage is at $130 per month, or maybe even Plan L.

If you look at that, it's $100 per month, which provides much less coverage than Plan N, but has the same monthly premium of about $100/month. So there are many examples we could go over, but when you hear an agent, or if you hear us just kind of glossing over these other plans and focusing on a few of the plan letters, just know that it is because they simply don't make financial sense and they are often not worth discussing.

Medigap Plan A, just on the other hand, maybe one of the only viable options for you if you're eligible for Medicare under age 65. So if you want a Medigap Plan under age 65, you may have to have a Medigap Plan A. It's not the best value plan, you know, it doesn't have the most coverage, but again, it might be one of those only options for you.

And that is in many states, so just keep that in mind. 

Joanne: Now, let's turn to how geography can determine the right plan for you. So where you live can greatly impact the pricing differences of the Medigap plans that are available to you, and that's going to impact the conversation of what might be the right Medigap plan for you.

As always, we always recommend connecting with a broker that can walk you through some of these conversations and give you some rates. Let's talk about examples. In Florida, there's a Plan G. You can get that for approximately $195/month, or you can get a high deductible G for $60/month. 

Now in Michigan, Plan G might be $130/month versus the high deductible G at $45/month. So you're seeing there, there's a far bigger price spread in Florida than Michigan. So maybe it makes a lot more sense in Florida. And we do sell quite a few high deductible G's in Florida versus Michigan. I think we only have a couple.

Now this means the difference between Plan G and High Deductible G in Florida is $135/month. While in Michigan, it might only be $85/month. So again, the conversation about these two options can be completely different, depending on what state you live in. Now, in other states, there may also be a larger or smaller difference in premiums between Plan N and Plan G, and that's going to impact what you feel is the right plan for you and impact the discussion you're going to be having with your agent.

Also, the Plan N conversation becomes very different in states that have something called the Medicare overcharge measure laws. We call them mom states. And these are states that don't allow Medicare providers to charge Part B excess charges. It's just not allowed. So since excess charges tend to be one of the main factors that kind of make people nervous about a Plan N, without the possibility of having excess charges in one of those states, Plan N can become an even better option than it already is.

So, your ability to change Medigap plans in the future can also be impacted by the state that you live in. So, don't forget states like California and Oregon, for example, have Medigap birthday rules which allow you to change to a new Medigap plan regardless of your health right around your birth month.

The same plan must just provide the same or lesser benefits like Plan G to Plan G or going from Plan G to Plan N.

Cameron: Just remember those two states, those are just examples. There are others. There are just over a dozen states now that have unique rules for changing Medigap plans. So we will link to a guide that talks about those different details.

But again, we talk about it in many episodes. It's always good to talk to an independent broker familiar with your specific state. So you can find an actual plan that's right for you instead of just listening to general ideas and trying to make a decision based on that. All of this matters because the long-term cost of choosing the right Medigap plan, can vary drastically based on your choice.

And we're going to show you again, the differences between Plan F Plan G, and Plan N long term. So we did some cost projections, if you will. These assume that you will meet the Part B deductible. So you're going to pay whatever the Part B deductible is over the years. And we even factored in the fact that the Part B deductible will increase over time.

We also assume that you will have three primary care visits per year, five specialist visits per year, and one ER visit per year, which we were able to find are some of the average numbers of visits. for the average Medicare beneficiary. And last but not least, we're just going to assume that you don't face excess charges.

They are super rare, we talk about it in other episodes, but less than 1 percent of the time do bills with Medicare have excess charges, so we left these out for the example. So in the first example, we looked at the actual premium increases over time using average premium increases for each plan letter that we have already calculated.

This is using real data, real plans in the market, and just seeing what it would look like over time. So in this case, again, we talked about Plan F having slightly higher premium increases at 6.13%. We found that was the average. Plan G, 5.68%, and Plan N, 3.50%. So Plan F the most, then Plan G, then Plan N.

This also includes, again, the increases to the Part B deductible, which we calculated using recent increases in the past. So, looking 25 years into the future, using this data we would project the total cost, including monthly premiums and out-of-pocket costs, which would be the following for each plan.

So over 25 years with Plan F, you might pay $107,300 over those 25 years, Plan G $91,400, and Plan N $61,600. So what does this mean for your actual yearly costs over those 25 years? Plan F would be about $4,300 per year. Plan G is about $3,600 per year and Plan N is $2,500 per year. That is a huge difference right there between let's say even Plan G versus Plan N with Plan N.

Coming in at about $1,200 less per year than Plan G and Plan N, almost $2,000 less than Plan F over those 25 years. Again, that's per year savings. Now, if you think we're being unfair to Plan F or Plan G and trying to favor one over the other, Let's just pretend that they each have the same rate increases over the same years.

So we'll just say Plan G, Plan F, and Plan N, have a 6 percent yearly rate increase to their premiums. So now the out-of-pocket cost for Plan F would be $105,300. Plan G, $98,400 and Plan N, $83,000. Using this math, Plan N still comes in about $1,000 per year cheaper over those 25 years. So again, drastic difference and about $500 less per year than Plan G.

Now, remember, the reason these long-term numbers are important is that when it comes to choosing which Medigap plan letter is right for you, it should also be considered a long-term decision because outside of your Medigap open enrollment period, In most states and most circumstances, you will have to qualify for a new Medigap plan by going through medical underwriting, and your approval or denial for the new plan will be based on your health status at the time of your application and pre-existing conditions you have as well.

This even applies if you're changing from one Medigap plan letter to another, like Plan F to Plan G or Plan G to Plan N. So again, always think long-term with metagap coverage. It may seem like a cop-out, but there is truly no best Medigap plan available. However, some are better than others, depending on where you live, as well as your wants and your needs.

Overall, we believe Plan F is a thing of the past, and Plan N should always be very seriously considered, probably even more so than Plan G. Although, Plan G remains the most popular Medigap plan by far, we think that Plan G will continue to hold that title for many years to come. As always, please leave us a review on your podcast app and subscribe so you can listen to future episodes.

You can find more Medicare content from us by going to YouTube and searching Giardini Medicare, or you can do the same on TikTok. Also, don't forget to send us any feedback or questions to our email, which is info@gmedicareteam.com, and have a great rest of your day.

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