To figure out which Medicare Supplement Plan is best for you, you have to ask yourself two questions: First, “What am I comfortable paying every month for my Med Supp?” and second, “What am I comfortable paying out-of-pocket if I need care?” Since Medicare Part B only covers 80% of your medical expenses, there are three possible out-of-pocket expenses to consider when selecting a Medigap Plan to cover the rest.
Those costs include: the annual Part B deductible, doctor and ER copays, and excess charges. Depending whether you pick up these costs yourself or choose a plan that covers them for you will ultimately determine how much you pay per month and how well your plan meets your needs (pays for out of pocket costs).
Should I pay my own Part B deductible or find a Medigap Plan that covers it?
The first out-of-pocket cost you should consider when choosing a Medigap Plan is the Medicare Part B deductible. The annual deductible is $185 in 2019 – and will increase slightly every year to keep pace with inflation. The most popular Medigap Plan, Plan F, covers the Part B deductible for you, so you don’t have to worry about that out-of-pocket cost under that plan.
Plan G, which is growing in popularity, does not cover the Part B deductible, so if you have a Plan G, you are responsible for paying that $185 deductible after receiving your care. If you only go to the doctor’s once a year, there’s a chance you won’t even reach the deductible. The amount of money you save every month by taking on the responsibility of paying your own Part B deductible on a Plan G usually adds up to twice as much as you’d spend if you were on a Plan F.
Plan N doesn’t cover the Part B deductible, either, nor does it cover Part B excess charges, ER or doctor copays – which is why the monthly premium costs much less than a Plan F or a Plan G. You basically have to decide if you’d rather pay a higher monthly premium for a plan that covers the deductible for you or save on your monthly premium in exchange for taking on more out-of-pocket costs.
Do I want to be responsible for Part B copays?
If you have a Plan C, D, F or G, you don’t have to worry about paying doctor charges or copays. All you have to do is pay your monthly premium, and the Part B deductible if you have Plan G or D. If you have Plan N, not only do you have to pay the Part B deductible like you would with Plan D or G, but you also have to pay a $20 doctor copay and a $50 copay whenever you use an Emergency Room.
Looking at the monthly savings from switching to a Plan N from a Plan F, you would have to go to the doctor more than 20 times in one year to wipe out the savings – which is highly uncommon. If you have multiple health conditions, you may want to consider a Plan G, which still gives you premium savings and lower rate increases while covering your Part B copays. However, if you don’t have any major health conditions and hardly ever go to the doctor, a Plan N might be the route to go.
Why don’t I have to worry about excess charges in Ohio?
Excess charges are an extra 15% that doctors can “balance bill” patients. Only Plans F and G cover Part B excess charges; other plans expect you to pay for these out-of-pocket. If your doctor “accepts assignment” from Medicare, it means he accepts what Medicare covers as payment in full, so you don’t have to worry about excess charges. But since 96% of all doctors “accept assignment” from Medicare, it’s rare that you’ll encounter this.
So far, eight states have outlawed balance billing Medicare beneficiaries: Connecticut, Minnesota, Pennsylvania, Rhode Island, Vermont, Massachusetts, New York and Ohio. This means that seniors in Ohio on a Plan C, D or N don’t have to worry about excess charges from doctors’ balance billing. If you have a Plan N, you are only responsible for paying the Part B deductible and any doctor ($20) or ER ($50) copays – which means more savings in your pocket if you hardly need care.
Would a High-Deductible Plan F be better for maximum savings?
A High-Deductible Plan F requires seniors to pay an annual deductible of $2,300 (in 2019) before coverage starts. A normal Plan F can cost multiples more in monthly premium than a High-Deductible Plan F. So, this High-Deductible Plan is perfect for those who hardly ever go to the doctor and can afford to meet the $2,300 deductible. After a year or two on this plan, these monthly savings could easily cover your deductible – while further savings compound.
