Most individuals pay Medicare taxes while they work in the U.S. However, few people understand how Medicare works and the various plans you can purchase at 65. One plan in particular that comes up in Medicare conversation is Medicare Part G, also known as Plan G. If you are unsure what this plan is, keep reading to find out!
What is Part G?
Part G is a Medicare Supplement plan, meaning private insurance companies offer this policy. You may wonder why you would need a Supplement plan in addition to your Original Medicare. The answer is because Original Medicare does not cover all your hospital and medical costs.
In fact, you are responsible for the Part A deductible, Part B deductible, hospital, and medical copays and coinsurance, and Plan G charges, also known as Part B excess charges, when you enroll in Medicare only. However, if you purchase Supplement Plan G, it will cover most of those expenses for you, thus leaving you with very few out-of-pocket costs during the year.
What Part G doesn’t cover
The one benefit that a Part G policy won’t cover for you is the Part B annual deductible. You must satisfy that deductible before Medicare pays its portion, and your Part G plan pays the remaining balance for Medicare-approved services.
Standardized Supplement plans
When exploring Supplement plans, such as Part G, it’s essential to know that these plans are standardized. That means no matter what carrier you choose, the benefits offered by a specific plan are the same. For example, Part G with Carrier ABC provides the same benefits as Carrier XYZ. So how do you choose a carrier? Well, consider the premium.
Monthly premiums and increases
The difference from one carrier to another is the monthly premium. Each carrier can set their premium how they see fit, but they determine premiums based on your zip code, age, gender, and tobacco use. Therefore, your premium will be different from someone else you may know. Since the coverage is the same, choosing a plan with a higher premium doesn’t make much sense. However, you’ll also want to consider their premium increases.
Many insurance policies have premium increases. Generally, most carriers will lock in your premium for 12 months and have an increase on your plan’s anniversary date.
Increases are inevitable with Supplement premiums, but they vary with every carrier. Some will increase due to inflation, while others increase due to age, or it could be both.
However, the good news is you don’t always have to stay with the same policy if the increases get out of control.
When can I apply for a Part G plan?
Every Medicare beneficiary has a one-time golden ticket to enroll in a Plan G policy with no health questions. It’s a 6-month window from your Part B effective date. As long as you enroll in a plan within those six months, you won’t have to answer health questions and are guaranteed that plan.
However, once you’re outside that window, you’ll likely need to answer health questions in most states to apply for a Part G plan. That’s why it’s important to know the rules of your state. For example, some states, such as California, allow you to change your Medicare Supplement plan yearly around your birthday with no health questions. But you must choose a plan with equal or lesser coverage.
The Medicare world can be a challenging thing to decipher. Therefore, starting your research early and understanding all your options will benefit you!