If you were to purchase a brand new car, what would be more important to you? The brand or the actual quality of the car? Let's say you really admire Lexus as a luxury brand (this is my personal preference). But what about the Toyota? It has the same features, quality, stability; the only difference is the brand. What would you do? Which car would you select?
Now, I know that purchasing a car is not the same as purchasing a Medicare Supplement, but bear with my analogy for the time being.
There are 10 Medicare Supplement plans, along with a high-deductible version of Plan F. However, the original Plan F has become the official champion of the Medicare Supplement world, leaving all other plans in the dust.
Plan F has been marketed as the best of the best, the luxury automobile of the Medicare Supplement line. However, many consumers are never officially introduced to Plan G. There are a few reasons this seemingly identical plan has been kicked to the curb during sales presentations.
1. It costs less, therefore agents will make a smaller commission… meaning Plan G is not as lucrative as selling the costly Plan F
2. Agents market this plan as a “hassle” compared to Plan F; meaning consumers are scared into thinking Plan G would require more effort on their part.
Let's discuss the first reason. The average difference in price between Plan F and Plan G is about $20-$30 (not actual average, but rather my own personal assessment). This comes to roughly $300/year in savings, or as an agent would see it, $60 less than a Plan F would garner in commissions. This may not sound worthwhile to an agent's agenda, but if you're selling 100 policies every 6 months that's about $6,000 down the drain. Sound worthwhile now?
However, if the agent is truly finding you the best policy to fit your situation, they will not steer you away from a Plan G. I always inform my leads of Plan G, which brings me to the second reason:
You, the consumer.
It's difficult to sway your opinion on Plan F. Many of you feel that Plan F is the only plan worth your money. The only difference between Plans F and G is a little, tiny thing called the Part B Deductible. This deductible costs $147/year, and must be used up completely before Medicare or your carrier will cover anything. Let's do some more math. If Switching to a Plan G could save you $25/month, you would still be saving $153/year even with paying the $147/year Part B Deductible.
It's a conundrum, but some people forego paying that $147/year out-of-pocket (it's a deductible, you don't have to send a bill anywhere) in order to spend about $20-$30 more a month on the Lexus of Medicare Supplements.
Sure, all your friends might have the shiny, new Plan F, but you could get the same coverage for less and become the Medicare Supplement guru of the group. If my leads are comfortable, I attempt to steer them towards Plan G. I'm not always successful, but I hope Plan G will become more popular in the future.
If I had to choose between a Lexus and Toyota, I would probably choose the Toyota. Not because Lexus is unreliable, but because I know I would be just as satisfied with a Toyota overall as I would with a Lexus, and they are much cheaper.