Original Medicare Parts A&B has gaps and does not fully cover your medical services. The most significant gap you’ll need coverage for is your Part B coinsurance, except for some preventative care services, which are covered at 100%.
Most outpatient care services, such as doctor visits, outpatient surgeries even chemotherapy, are covered by only 80% of Medicare.
You are responsible for the Part B deductible and a coinsurance of 20%. After that, that 20% coinsurance could be rather expensive for expensive treatments, and there’s no maximum out-of-pocket limit you’ll pay forever.
Unless you purchase a Medigap policy to cover 20% of Original Medicare and pay as secondary coverage, if a healthcare provider accepts Medicare, they will accept your Medigap plan no matter which Medigap plan or which insurance company you choose.
Since Medicare does not have network restrictions, neither do Medigap plans.
You can visit any doctor in the United States that accepts original Medicare, and your Medigap plan will pay exactly what it’s supposed to. There are ten standardized Medigap plans; supplement plan G is the most popular.
Let’s look at precisely what Medigap Plan G covers.
Since Plan F was phased out for anyone new to Medicare as of January 1, 2020, plan G has become the most popular plan with the most comprehensive and predictable healthcare cost throughout the year, and here’s what I mean by that plan G covers your
- Hospital deductible
- Part A coinsurance
- Skilled nursing coinsurance
- Hospice Part B excess charges
- Part B coinsurance
- And more
That means the annual Part B deductible is the only out-of-pocket expense for Medicare-approved services for the year. The Part B deductible in 2023 is $226. You’ll pay that when Medicare processes your first outpatient claim of the year; afterward, your approved Part B services are covered fully for the rest of the year.
This means zero out-of-pocket for Part B doctor visits and lab work but also for more expensive things like:
- Diagnostic imaging
- Ambulance rides
- Outpatient surgeries
- Radiation and chemotherapy
Many of our clients enjoy peace of mind from their plan G and its comprehensive coverage. They don’t have to worry about frequent bills or what they need to pay and what they don’t. It’s pretty simple with plan G.
Some beneficiaries, however, have the financial means to cover a higher deductible than just the small Part B deductible. The high deductible plan G has surfaced as a cost-effective option for people who are OK with covering some out pocket costs but want to stop loss or limit those expenses at some point.
How does this plan work exactly?
High Deductible Medicare Plan G covers the same healthcare services as regular plan G, but you must meet a higher deductible. That deductible is $2700 in 2023. Medicare will cover its share of part A and B healthcare services. You pay your share until you satisfy the $2700 high deductible requirement.
Any amount you pay toward the part A&B deductibles counts toward satisfying your high deductible. Any copays or coinsurance that you spend also count toward the deductible.
Suppose you have a year of heavy healthcare spending and meet the $2700 deductible during the year. In that case, the plan will begin to cover all approved services in full for the rest of the year just like it does with regular Medigap plan G Medicare increases the deductible a small amount each year as healthcare costs inflate.
Medicare will usually announce the new deductible for the upcoming year in the fall. Hence, the difference between the two plans is that you have more out-of-pocket costs with the high deductible plan G compared to regular plan G.
The High Deductible Medicare Plan G may be more cost-effective in certain situations than the alternative, original Medicare by itself. High Deductible plans are popular among cost-conscious consumers who either don’t have the budget for a regular plan G but are also aware of the potential for massive out-of-pocket costs with original Medicare on its own or with those who don’t go to the doctor often and are pretty healthy right now.
But also know they have some money to meet a high deductible if they encounter unexpected medical needs. The best thing you can do here is do some simple math. A hypothetical plan G means lower premiums.
That’s the tradeoff, so would the savings from that lower premium be worth it for you even knowing that you could spend an additional $2700 out of pocket, or would you instead pay a higher monthly premium and not have to worry about paying out of pocket costs throughout the year the choice, of course, is up to you.
Enrolling in a high deductible plan G also means paying close attention to your claims and the amount you pay during the year. Medicare beneficiaries routinely get bills for services they don’t owe when doctors’ offices miss code things like orders for lab work.