Plan F vs. Plan G

Update: Much has changed post-MACRA. See the updates here: www.PlanNMedicare.org Plan F vs. Plan G at Renewal Time -Short video presentation. This is VERY common from carrier to carrier. Plan G is the better value, not only today, but long term. This video specifically mentions Mutual of Omaha and Government Personnel Mutual (GPM Life). Incorporated from another post, too: {This was posted by Christopher Westfall in a public forum. Now shared here for our site.} If Plan F's annual premium is greater than $147 more than Plan G, then you save money by going to Plan G. Most often, and we only write 200-300 cases per year, so what do I know, but must often we see a difference of $250 to $300 a year for that $147 deductible. The client will save $100 to $300 per year by going to Plan G and paying that $147 deductible themselves. The other factor is the rate increase. Year after year we've seen Plan F rate increases far higher than Plan G rate increases. Why? A couple of factors. First, Plan F must be offered as guaranteed issue for those folks leaving an employer plan, etc. Plan G in most states is not guaranteed issue and must be obtained only after asking the health questions. (Not talking about T-65's here as we don't market to them.) So, you have a moderately healthier risk pool of folks on Plan G than you do on Plan F. This impacts rate increases. The other, more contributory, factor is that Plan F is an all-you-can-eat buffet and there is no barrier to as many doctor appointments as they want. Congressional budget folks are calling this "first dollar" coverage in that there is coverage from the supplement for that very first dollar of need. This means utilization is through the roof, compared to Plan G or N, where a deductible is factored in to their decision to go for minor visits. This is why we continually see situations like last year in SC where Mutual of Omaha had an 18.5% rate increase for Plan F, yet a 12.5% rate increase for Plan G. Another example, GPM Life in CT, 12% on F, 0% on G. GPM Life in OH, 15% on F, 8% on G. One thing a senior must consider is not only today's premium, but the worst case scenario in case they have a heart attack, stroke, cancer, etc. and they're stuck. I liken it to a game of musical chairs. You can continue to chase the best rate every year UNTIL something like that happens to you. Then, you must stay with your current plan. It's guaranteed renewable, but you're stuck there. Would you rather be "stuck" on a plan with a small rate increase or a larger rate increase each year? On a screen share with my potential clients, I show them a graph of a trend line showing those historical figures above. Just show them out 5 years or 10 years and what would happen if they were stuck on Plan F vs. Plan G. It's quite convincing. (The Excel Spreadsheet that can create this graph to show your clients is available here: Compare Plan F to Plan G Spreadsheet ) The agent, by the way, does not get compensated on the $147. They don't even get paid on up to $200 with some companies - when writing Plan F. So, if you think you'll write a higher premium to get a higher commission, that's not necessarily the case. That deductible is a pass-through to Medicare and is not compensation-worthy. So, while we should always respond to their need and many seniors just don't want to fool with it, there are some who are seeking the best value today and tomorrow. For them, you're best suited to give them the information so they can make an informed decision.

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