Washington Medicare Supplement plan F or Plan G, which is better?
When you’re first considering a Medicare supplement plan (Medigap), you’re going to hear a lot about plan F. You’re going to hear it’s the best plan, it pays 100% of everything, you never have to spend any money on this plan. Most agents you run into nowadays are going to recommend plan F. The biggest reason agents recommend Medicare supplement plan F is because it pays the agent the highest commission, the commission is based on premium plan F has the highest premium.
Even though Medicare Supplement plan F pays for everything, is it really the best plan? Consider this, the only difference between Medicare Supplement plan F and plan G is the Medicare Part B deductible, which is $183 is 2018. It’s a once a year deductible that is paid as your first $183 of medical bills in a years’ time. Now the average annual premium difference between a Medicare Supplement plan F and plan G is $250-$300 per year, at age 65. So, you’re going to pay $250-$300 in additional premium, so the plan can pay $183 for you. It get’s even more interesting though, the plan F also has the highest premium increases. When a company raises their premiums the Medicare Supplement plan F almost always goes up the most, and by a significant amount too. It’s not uncommon to see a Medicare Supplement plan G receive a 4-5% increase, and an F to receive a 10%+ premium increase. So, over the years, the premium gap between a Medicare Supplement Plan F and plan G is going to grow. Meaning that by age 70, you could be paying $600+ in additional premium for plan F above and beyond what you would pay for a plan G, just so the plan can pay a $183 deductible for you.
One thing to keep in mind, this isn’t the case in every single state. Most states plan G is absolutely the best and most cost-effective plan. There are a few states like California or Washington where plan F really is the best plan. There are a handful of states where people don’t have to worry about qualifying with their health to change plans in the future and those states tend to be plan F states.
To conclude, in most states if an agent’s selling a Medicare supplement plan F, it’s so they can make a bigger commission. A plan G is going to be the most cost-effective plan, with the lowest premium over a long period of time.