We need to discuss a common mistake in the language of Medicare: “Parts” vs. “Plans.”
While very similar, the two words mean very different things. “Parts” of Medicare include Parts A-D. Part A is hospital insurance, B is outpatient insurance, C is Medicare Advantage, and D is prescription drug coverage. Parts A and B are referred to as Original Medicare. Part C includes all Medicare Advantage plans. Part D includes all prescription drug plans.
“Plans” in Medicare refer to specific policies. If you pair the word “plan” with a letter of the alphabet, you’ll be referring to a Medicare supplement (Medigap) plan. There are currently 10 Medicare supplement plans: A-N.
We know…it’s confusing. But since you can have both “Part A” and “Plan A,” it’s an important distinction to learn.
Now, back to “Part G,” or more correctly, “Plan G.” It’s a popular Medicare supplement and one that you’ve probably heard quite a lot about. Before you assume it’s the right plan for you, let’s discuss what benefits are included in Plan G.
An Overview of Medicare Supplements
To fully appreciate the coverage that Plan G provides, we’ll need to review how Medicare supplements work and which costs they are designed to help with.
Medigap plans are standardized insurance plans. Standardization means that the benefits in each Medigap plan will be the same no matter which insurance company is selling the plan and where you purchase the plan. The benefits will also not change from one year to the next. The only thing that can vary from one insurance company to the next is the monthly premium. Premiums can also be increased based on your age and overall healthcare costs.
Medicare supplements are designed to help pay for the expenses that remain after Original Medicare has paid its share of the cost. Parts A and B do not pay for all of your medical expenses – you will have deductibles, copays, and coinsurance costs. Each of the ten supplements will help with those costs. The level of coverage will depend on which supplement plan you choose.
Part A: Coverage and Costs
Medicare Part A is your hospital insurance. It pays for room and board expenses during an inpatient hospital stay. Before Part A begins paying, you’ll need to meet the deductible, which is $1556 in 2022. That deductible will apply to each benefit period, which can occur more than once in a calendar year.
After you’ve met your deductible, Part A will pay for the first 60 days of your hospital stay. From day 61 to 90, your coinsurance responsibility will be $389 per day. After day 90, you can use any or all of your 60 lifetime reserve days if you have them available. If you do, your coinsurance cost will be $778 per day. Once your benefits are exhausted, you’ll be responsible for the entire daily expense. There are no annual limits on your financial responsibility.
Part B: Coverage and Costs
Part B is your outpatient insurance. It will help you pay for visits to your doctor, diagnostic tests, durable medical equipment, surgeries, and preventive services. The annual deductible for Part B is $233 in 2022. Once you’ve met your deductible, Part B works as an 80/20 split, meaning that you will be responsible for 20% of the cost. As with Part A, there is no out-of-pocket limit.
You may have realized by this point that your healthcare expenses could add up quickly if your only coverage is Original Medicare. Fortunately, you have additional coverage options, one of which is a Medicare supplement insurance plan.
Medicare Supplement Plan G: Coverage and Benefits
Now let’s get into the benefits of Plan G! It’s one of the most popular plans, with good reason. Medicare Plan G will pay for all of the out-of-pocket expenses we mentioned earlier, with the exception of the Part B deductible.
To review, Plan G covers:
- Part A deductible
- Part A coinsurance and hospital costs
- It also offers an additional 365 days after Medicare benefits are exhausted
- First 3 pints of blood
- Hospice care coinsurance or copayment
- Part B coinsurance or copayment
- Part B excess charges
- Emergency services during foreign travel (up to specified limits)
How much does Plan G cost?
We mentioned that the only variance you’ll find in Plan G is the premiums the insurance carrier will charge you. This is why it’s always a good idea to shop around for coverage – you can compare the premiums from multiple insurance carriers. There are other factors to consider as well, such as the carrier’s pricing method and their history of rate increases. These are all things your Medicare advisor will be familiar with.
Your premium will also depend on personal information such as your age, gender, tobacco use, and the state in which you live. The average premium for a newly-eligible Medicare beneficiary ranges from $100-$200, possibly more or less, based on the cost of living in your state.
To be eligible to enroll in Medicare supplement Plan G, you must first be enrolled in Original Medicare.
How to Enroll in Medigap Plan G
Before enrolling in any Medicare supplement, you must be enrolled in Medicare Parts A and B. After that, it’s a simple as choosing an insurance carrier and submitting your application, which your licensed insurance agent can do on your behalf.
If you are ready to enroll in Medigap Plan G, give our office a call today. Our trusted advisors can review your needs, make sure Plan G is a good fit for you, and submit your application.