Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all else, get the most out of your Medicare benefits. Today's
topic is this question here: What is the best Medicare supplemental plan G? Many of you
have already decided that you're going to get a plan G, and so the question is, which
one's the best? Well, I hate to be the bearer of bad news, but folks, there really is no
best. Now, I'm not saying all insurance companies are the same, they're not for sure. But there
is really no best. But there are some differences, and so that's what I want to teach you today.
So the first question I want to address is this: What is the same, though, with all G
plans? In other words, what is identical with the G plans? There's actually four items that are the same.
Number one would be the coverage. You know that when you go into original Medicare, there
are six gaps in original Medicare. In other words, these are things that Medicare doesn't pay. Medicare
pays first, but they leave you with some gaps, some financial liabilities. There are six of them
in Medicare, three on the A and three on the B. And so if you decide to take a G plan,
five of those six gaps are covered. In other words, pays very, very well. The one gap you're
responsible for is called the Part B deductible. Part B deductible. This year, that deductible
is $198, and that is for the whole year.
So that means you're responsible for the first $198 of anything covered by Medicare B. Couple
of doctor visits, maybe $198 of an MRI or something. But the point is that's
all you have to pay. So regardless of the carrier that you choose, that will be your only
out-of-pocket expense on the G plan. So it would be dishonest of someone to say, you
know, if you buy a G plan from ABC Insurance Company, they pay better than XYZ G plan. In other words, that
company’s G plan. That's not true. If some were to say ABC doesn't pay near as good as
XY, that's not true. Folks, the same bills, the same type of bills, and the same amount
of bills are paid by all G plans. Why? Because Medicare standardizes the G plan. Medicare
says this: when you buy a G plan, as long as Medicare pays first, that G plan will pick
up everything for the whole year, other than the first $198. Coverage is the same.
Number two, the network is also the same. Why is that? Well, because when you get a
supplemental plan, there is no network with the plan. In fact, any provider that takes
Medicare, you can go to that provider and they will take your supplement plan because
that supplemental plan is nothing more than the secondary payer. Medicare pays first.
You choose your supplemental plan, and they're going to follow covering everything but the
first $198. So the network is the same. Now, listen, there are some plans called advantage
plans that do have networks. Those are HMO and PPO. But when you have a supplemental
plan, there is no network whatsoever. So, again, that's identical. Number three, customer
service. Now, what do I mean by this? This means that you've had some kind of an issue going
on, and you have to call the carrier and you have to talk to them. You'll call the 800
number that's on the back of your card, and here's the way it's going to go. You call the call
center. You could get someone there that's a very well trained, very good attitude, very
helpful, and they do everything they can to take care of your customer service issue.
And you'll hang up the phone. You'll say that that was good and you could call back 10 months
later, the same 800 number on your insurance card, and you could get someone that's not
so well trained, that's not really having a very good day, not have a good attitude.
And you say it was a lousy experience. And what I'm saying to you is that it is the same.
Depends on who picks up the phone. And all insurance companies have call centers. So
your experience is only as good as the one who picked up the phone.
And then lastly, claims experience. What do I mean by this? This means there's been a
problem with the claim. And typically, when this happens, in fact, 99% of the time when
it happens, what's happened is there's a bill that was filed with Medicare, and Medicare
denies the claim. Therefore, your supplemental plan denies it as well. And you get a bill
for the full balance. Well, when that happens, more than likely it's a coding problem. So
when you have a claim problem, it's typically a coding problem. Somebody in the billing department, the doc’s
office, or the hospital did not submit that claim with the right code. That's why Medicare
didn't pay. And so that's easily correctable. We call the provider and say that it should
have been covered, can you see if it was billed correctly? They'll say, 99% of the time, no,
it wasn't. They'll refile the claim and Medicare pays; your supplemental plan
will pay as well. So my point is that claims experience problems happen in billing departments,
not with a carrier. So all these items here are the same, regardless of what G plan that
you go with. So that's what's the same. Now, let's talk about the differences. And there's
actually only two differences. Number one, there would definitely a difference of the initial
premium, meaning when you start on that particular plan, they quote the initial premium.
Now, the initial premiums are always based upon age, gender (male or female), based upon
tobacco status. Right? Whether you are a tobacco user or not and then where you live. So this
would be location. Sometimes that's the county. Sometimes it’s states. Sometimes a zip
code. But all that determines your initial rate. And then sometimes when spouses are
going on the same plan, that carrier will offer what we call a multi-policy discount.
So those are the variables that determine what your initial premium is going to be.
Age, gender, tobacco status, where you live, and is spouse going on the same policy. So that's
the initial premium. That's where we begin. But then the second issue, that will be different
for sure. And that will be the stability of the premiums. Which means what are these rates
going to look like in three years, five years, 10 years down the road? Well, number one, no one knows
for sure. We have no idea. But what we can do is we can track the stability of the companies
and for sure, there are going to be differences. So what is it that would cause rates to increase?
Number one, I want you to realize that all rates go up just because of medical inflation. But
some companies are very modest in their increases, some a little bit more amounts. OK? Now keep
in mind, whether you have a group plan at work or you've had an individual plan or even
people there on Medicare Advantage plans, everything goes up, folks, because of medical
inflation. Copays, max out of pocket, all those things go up. So we are not shocked
to see some increases in premiums, but what we want is stable premiums, modest increases.
So let me show you how rates change with supplemental plans. So when you buy a supplemental plan,
what's happening is, regardless of the carrier, you go with, you're going to be placed into a block of business.
This would be like a group. And so what's going on in this, and we say that we're in
a G group. And let's say your initial premium is $110 a month.
$110 a month. Now, there's actually two ways that rates go up in most states, and that
is when you're a year older, a year later, and policy anniversary, you'll see your monthly
rate go up slightly. On average, that's about 40 or 50 dollars a year. So if you're paying
monthly, we take the 40 or 50 per year divided by twelve. And we are going to see that rate go up maybe four
dollars or so, and that rate increases to cover some of the inflationary things that
are happening with Medicare claims. All right? So that's one kind of increase. But the second
increase is really what we're more concerned about because this is no additional shock
here. The second one is this. What's happening is this: you have the policy owners paying
in their premium, that's you paying into the group. All policyholders are. And then you
have a company. What are they doing? Well, they're paying money out through claims. So
what we have is we have money going in and we have money going out. So group increases
happen whenever claims exceed premiums. So we have more money going out than money coming
in. Now, when this happens, the only way they can ever raise the rate because of this group
increase is they have to go over to the state insurance commissioner and they have to petition
for a rate increase to cover those groups. So the insurance commissioner must approve
this particular increase. And so they petition for a rate increase, insurance commissioner's
office audits that, they have to approve it. And then they will approve it. Let's say it's
a three percent increase.
Everybody in the group is then going to go up three percent. All right? So what determines
that? What determines that is the health of the group. Now, as we go into this group,
we don't have any idea of the health of the group. We don't know how much cancer is in
there and how many knees and hips are gonna be replaced and how many stent implants will
occur and how many cataract surgery. We have no idea. But what we can do is if we go into a
company that has proven to us to be a larger group, which means more policyholders, which
means the risk of that is spread out to more policyholders then we will have less of these
kinds of increases. And so companies that tend to have a smaller group, smaller block
of business, we see these happening more often and more drastically. So that's what brings
stability to rates, the larger the group. Because it's really the health of the group
that determines the group increases. All right? So hope that helps you in understanding how
premiums increase. And so, folks, the bottom line is there really is no best company. But
you are looking for a better company, a company that's stable in the rates, and offers good initial premiums.