Is Medigap Plan G Worth It? Pros and Cons - GoodRx (2024)

Medigap plans are insurance supplement policies that cover out-of-pocket costs that original Medicare doesn’t — including copays, coinsurance and the Part A deductible. You typically need to have Medicare Part A and Part B to buy a Medigap plan.

Medigap plans are organized by letter names: A, B, C, D, F, G, K, L, M, and N. All plans with the same letter name have the same benefits. Some Medigap plans cap your expenses with annual out-of-pocket limits, after which the insurance company pays for 100% of approved services.

Among original Medicare enrollees in 2021, 41% had a Medigap plan. Of Medigap enrollees who had one of the 10 standardized plans in 2021 (excluding those in California), 32% had Plan G.

The Medigap plans with the most comprehensive coverage can have the highest premiums. If you access lots of healthcare, one way to make the most of your costs upfront and savings later is to choose a plan with a high deductible, which offers lower premiums. For people in most states, that means choosing Plan G — which is the only high-deductible plan available to new Medicare enrollees. (Plan F also has a high-deductible option in some states, but it is only available to people eligible for Medicare before January 1, 2020. And before June 1, 2010, an older Plan J could be sold with a high-deductible option.)

If you live in Massachusetts, Minnesota, or Wisconsin, it’s important to know that Medigap plans aren’t standardized by letter name, and you have fewer options in those states.

What is Medigap Plan G?

Plan G is the most comprehensive Medigap plan available to enrollees new to Medicare on or after January 1, 2020. It is also the only high-deductible Medigap plan available to enrollees new to Medicare on or after January 1, 2020.

There is no Plan G option in Massachusetts, Minnesota and Wisconsin.

What is High-Deductible Medigap Plan G?

High-deductible Plan G is a lower-premium plan with Plan G benefits that requires you to pay a certain amount out-of-pocket — excluding premiums — before the plan pays benefits. The high-deductible Plan G deductible is $2,800 in 2024. A Plan F high-deductible option is available in some states for enrollees eligible on or before January 1, 2020.

What does Medigap Plan G cover?

Plan G covers all of your out-of-pocket costs for:

• Part A coinsurance and hospital costs, up to an additional 365 days after Medicare benefits are used up

• Part B coinsurance or copayments

• First 3 pints of blood

• Part A hospice care coinsurance or copayments

• Skilled nursing facility care coinsurance

• Part A deductible

• Part B excess charge

Plan G also covers 80% of your out-of-pocket costs for emergency health care during foreign travel, up to your plan’s limits. Typically, you have a $250 annual deductible before this coverage begins.

High-deductible Plan G coverage matches regular Plan G once you meet your deductible.

What doesn’t Plan G cover?

Plan G doesn’t cover the Part B deductible, which is $240 in 2024.

How much does Medigap Plan G usually cost?

Premiums for regular Plan G and high-deductible Plan G vary based on factors including:

• Whether your plan offers discounts for being a non-smoker, paying the yearly cost upfront, or other reasons

• Whether you have a guaranteed issue right, which means an insurance company must sell you a Medigap plan that covers all of your pre-existing conditions and can’t charge you more because of past or present health issues

• Whether you are subject to medical underwriting, which can consider your health in a decision to deny coverage or charge a higher premium

• Whether you choose the high-deductible option

Use this Medigap plan finder tool to look for plans and compare costs in your ZIP code.

Premiums will rise, sometimes annually, based on inflation and other factors. Insurance companies can choose to base your monthly cost on one of three factors:

• Community-rated: The same premium is charged to everyone in an area, regardless of age.

• Issue-age-rated: These premiums are based on your age when you buy the policy and increase as you get older.

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• Attained-age-rated: These premiums are based on your current age.

Cost comparison

Let’s look at a sampling of 2024 premiums for a 70-year-old man who doesn’t smoke (preferred rate), which may also include a household discount. It’s important to note that rates for women are typically lower. Each state’s sample rates are from a company that sells a standard and a high-deductible Plan G:

How to choose a Medigap Plan G

How do you choose? Generally, community-rated plans are more expensive in the beginning, but their cost rises more slowly. The other two start out cheaper, and their cost rises steadily. No matter what plan you choose, the only thing you can count on is eventual premium increases.

Before you buy any Medigap plan, ask the salesperson how much the cost of the policy has increased over the last 10 years. If the company’s initial price looks low, consider whether the insurer has a history of low premium price increases. You can get this information from:

• Your state or territory insurance department

• Your local nonprofit State Health Insurance Assistance Program, known as SHIP

• Your insurance salesperson

What are the pros and cons of Medigap Plan G?

Pros

The biggest advantage of Plan G is its breadth. As long as Medicare covers your conditions and your preferred healthcare professional accepts Medicare, Plan G will pay its share.

Plan G seems expensive compared to other Medigap plans and Medicare Advantage plans. But if you need lots of healthcare or develop a condition that requires extensive medical care, Plan G could be very beneficial to you.

Cons

The downside of high-deductible Plan G can, of course, be your upfront cost before you receive help with out-of-pocket expenses. Assuming you have this high-deductible Medigap plan and receive a Medicare Part B-covered service, you’ll be responsible for the Part B deductible, which is $240 in 2024. Then Medicare will pay 80% of covered services and you will pay 20%. Your out-of-pocket spending in 2024 must reach $2,800 before your Medigap plan covers 100% of your share of Part B charges.

The situation changes if you are hospitalized, because Medicare Part A in 2024 has a $1,632 deductible per benefit period or episode of illness. Just that cost places you more than halfway to the high-deductible Plan G deductible. But you’ll need to have enough money to pay the Part A deductible plus nearly $1,200 more in out-of-pocket costs before your plan pays 100% of your share of Part A charges.

Another drawback of high-deductible Plan G is the chance that you may be stuck with that plan if your health worsens and you’d prefer to switch to regular Plan G. That’s because in most states, you will be subject to medical underwriting after your initial Medigap open enrollment period. That process can include the insurance company reviewing your medical records and the results of a physical to determine your premium — or opting not to cover you. Even if you’re approved, you could face very high premiums.

How does Medigap Plan G compare to other supplement plans?

When comparing Medigap plans, it’s important to note that Plan A and Plan B have the least-generous benefits. Neither covers skilled nursing home coinsurance or Part B excess charges. Plan A also doesn’t cover the Part A deductible, which is $1,632 for every hospital benefit period. All of these are covered by Plan G, and they can add up quickly if you are seriously ill and hospitalized.

If you are trying to save on monthly premiums, take a look at Plan K and Plan L. Both cover Part A coinsurance and hospital costs like Plan G, but they cover a lower percentage of other benefits. They do, however, have out-of-pocket limits. Plan K limits your costs to $7,060 in 2024. Plan L’s limit is $3,530 in 2024.

Medicare Advantage

You also might consider Medicare Advantage plans to replace your Part A and Part B coverage because their upfront costs are low, although ongoing costs can be much higher. But you can’t cover out-of-pocket costs with a Medigap plan.

Medicare Advantage plans also have an out-of-pocket maximum, which in 2024 is $8,850 for in-network and out-of-network services combined — but this doesn’t include what you’ve paid for Part D prescription medications.

Other programs

If you have limited income, these programs may be able to help you cover your Medicare out-of-pocket costs:

• Medicaid

• Medicare Savings Programs, which are run by the states and territories

• Program of All-Inclusive Care for the Elderly, known as PACE

If you are a U.S. military veteran, see if you qualify for Veterans Health Administration benefits.