High Deductible Plan G – Medigap HDG
In 2020, the Government authorized the creation of a new High Deductible Plan G. As you may know, Plan F disappeared for newly eligible seniors that were born after January 1, 1955. With the disappearance of Plan F, the High Deductible Plan F will be phased out as well. If you are interested in buying a High Deductible plan, the only option you will have will be the High Deductible Plan G if you were born after Jan 1, 1955 if you can’t be grandfathered in.
You may be asking multiple questions:
- What is Plan G?
- What does the High Deductible option coverage? What are my costs?
- Why should I buy a High Deductible plan?
We address those questions and more in the video below.
What is Plan G?
Medicare Supplement Plan G has become the most popular plan among our clients. It’s very similar to Plan F, with one exception. The Medicare Part B deductible is not covered
Here are the basic details of what Plan G Covers:
- Medicare Part A deductible, coinsurance, & hospital costs
- Medicare Part B Coinsurance, co-payment, & excess charges
- Preventative Care Part B Coinsurance
- Basic doctor visits
- Foreign Travel Emergency expenses
- Skilled nursing facility coinsurance
- Durable medical equipment (DME), blood transfusions, lab work, X-rays, surgeries, ambulance rides, etc.
It is the exact same as Plan F, except the Part B Deductible. Once the deductible is paid, Plan G provides full coverage for copays, coinsurance, the 20% Part B doesn’t cover, and the Part A hospital deductible. The deductible is not very high either. In 2021, the Plan G deductible is $203. If you are saving more than $203 in premiums by purchasing Plan G, then it makes sense to pick Plan G over F. You can see why so many people choose this one.
Here’s what the Plan G deductible looks like in action. Bob goes to the doctor for routine blood work on March 1. In April, he gets a bill from the doctor for $203. That $203 is his Part B deductible. Once he pays that bill, he will not incur any more out-of-pocket costs when he visits the doctor for Medicare approved charges. So outside of the deductible, Plan G is identical and the second most comprehensive to Plan F.
What Does a High Deductible Plan Mean?
In 2021, the only High Deductible plan is the High Deductible Plan F. As we mentioned earlier, Plan F is retiring this year, so Plan G will get a High Deductible Plan to replace it. The best way to explain how the High Deductible G will work is to compare it to the current Plan F option.
High Deductible Plan F
In 2022, the HDF and HDG has a $2490 Deductible.
Here are the deductible changes since 2015. As you can see, some years there is very little price movement. In other years there is an increase, but it usually small.
2015 – $2180
2016 – $2180
2017 – $2200
2018 – $2240
2019 – $2300
2020 – $2340
2021 – $2370
2022 – $2490
Where does the deductible apply? Medicare Part A (hospital) has out of pocket costs. For the year 2022, there is a projected $1556 deductible and co-payments north of $300 a day for Part A. The out-of-pocket costs for Part A will go towards the $2,490 deductible for the calendar year.
The 20% out of pocket costs for Part B and the Part B deductible will also be applied to the $2,490 deductible. This is the main difference between the plans HDF and HDG.
This example will help.
Susan is on Plan G. Her doctor visits will cost her the Part B deductible of $217. She is charged this amount prior to reaching her $2490 deductible. The $217 will be applied to the deductible.
However, if she has already spent the $2,490 on Part A (hospital costs). She still needs to satisfy the Part B deductible of $203. In this case the total max limit would be $2,490 + $203 = $2,693. On the HDF it doesn’t matter when you satisfy your Part B deductible, you satisfy your deductible when you reach $2,490.
How Do You Decide if Plan G is for You?
If you are looking for a comprehensive supplement plan, G is a perfect option. If your plan G premium is $217 less than F for annual cost, it makes sense to go to G. The savings will make up for the extra cost you have in the Part B deductible. We at Medicare Nationwide normally see Plan G rates about $240-$480 per year cheaper than that of Plan F.
Plan G’s rates have been much more stable and with F retiring, we expect them to continue to rise to encourage people to leave the plan.
Why Choose a High Deductible Plan?
So why bother with a High Deductible plan. It feels like you are going to have more out-of-pocket expenses. Not necessarily. Financial impact of High Deductible Plan Premiums on High Deductible Plans is much lower than their standard deductible counterparts. You may have experienced this with an employer plan prior to joining Medicare.
Let’s use a 75-year-old woman under Plan F as an example. For a 75-year-old the average premium is around $3,000 on Plan F. If she bought a High Deductible Plan, her premium drops to around $690. She is saving $2,310 in premium for the year, which is just slightly more than what her deductible would be at $2,490.
Make sure to quote both plans and consider the savings. Let’s say you get us to quote your options and you find that you will only save about $1,900 with a high deductible plan. This is much less than the deductible of $2,490. Should you still buy it? If you are in good health and don’t anticipate any changes in medical expenses, it might be worth taking the chance of potentially paying that deductible.
There may be other considerations besides financial ones.
A good example is someone on a Medicare Advantage plan. With Advantage plans, the premiums may be cheaper, but there are co-pays and co-insurance that must be paid out-of-pocket. Often these costs are more than anyone would pay with a high-deductible plan. But money is not the only reason for switching plans.
One main difference is that the high deductible plan stays with Medicare as your secondary insurance to Medicare. This means that you do not have to go a private managed care plan, called a Medicare Advantage plan.
The Bottom Line
Is there a downside to a High Deductible Plan?
Any time you go on a doctor visit, Medicare will pay 80% and you will get a bill for 20%. Each time you pay this amount it will apply to the deductible. It is good practice to keep up with this running total, so you know when you are getting close to satisfying your deductible.
Some people do not like this kind of financial management and will opt for the traditional plan F, G or N, so they don’t have to manage or track the deductible costs.
Medicare Nationwide offers hundreds of plan options that have been selected by thousands of American seniors since 2012. Medicare Nationwide is a boutique medical insurance agency focusing on one-to-one connections to ensure seniors select a suitable plan. We can help find you a tailored product designed for your budget and health needs.
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