If you are getting your Medicare benefits for the first time, you probably have questions about supplemental Medicare coverage. And you may want to know how you can save money.
In this article, we’re going to take a deep dive into one of the best ways to save money and still have good coverage. It’s High Deductible Medicare Supplement Plan GIf you're turning age 65 this year, Medicare Supplement Plan G is the most comprehensive Medicare supplement you can buy. It's also the most popular. You might be thinking that Medicare Supplement Plan F is....
We’ll explain who this is the best Medicare Supplement plan for, who shouldn’t consider it, and exactly how much money you can save.
Key Takeaways
- Original MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage. only covers about 80% of all Medicare-approved healthcare services.
- Medicare beneficiaries pay what Medicare does not cover out-of-pocket or with additional coverage.
- Additional coverage may include retiree health benefits, veteran benefits, MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States., or a Medicare Supplement plan.
- Medicare Advantage plansMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B). may offer coverage for additional benefits, such as prescriptions and routine dental, vision, and hearing. However, most plans do not pay more out-of-pocket costsOut-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments..
- Original Medicare does not limit a Medicare beneficiary’s out-of-pocket costs, but Medicare Advantage plans do.
- High-Deductible Medigap Plan G is an option to a Medicare Advantage plan with a high out-of-pocket limit. After paying the annual deductible, it has the same benefits and same coverage as the standard Plan G Medicare Supplement.
What Does High-Deductible Plan G Mean?
A high-deductible Medicare plan is a plan that pays nothing until you pay the full amount of the plan’s deductible. If you are struggling with Medicare supplemental insurance costs and you’re looking for a lower-cost option, discuss the high deductible G plan with your insurance agent.
Medigap Policies are Standardized
Unlike Medicare Advantage plans, Medigap plans are standardized. There are ten standard plans (A through N).
The best way to understand and compare Medicare Supplement plansMedicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage. is to see a chart:
Two of the standard plans, Plan F and Plan G, are available with a high-deductible option. If you buy one of these policies, Medicare will reimburse 80% of all Medicare-covered costs and you will pay the remaining 20% until you reach the deductible amount.
What is the High G Deductible for 2023?
The high-deductible amount is $2,490. This amount changes every couple of years.
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Is Medicare Supplement High Deductible Plan G Better than High Deductible Plan F?
No. They are the same.
You are responsible for two out-of-pocket costs with a high-deductible plan — the deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share. and the coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. .
Medicare deductibles are set by law. And, everyone pays the same amount.
The Part A deductible is $1,600 per benefit periodA benefit period is a method used in Original Medicare to measure a beneficiaries use of hospital and skilled nursing facility (SNF) services. With each new benefit period, the beneficiary is charged a new benefit.... Both Plan F and Plan G cover this deductible in full.
The Part B deductible is $226 per year. Plan F covers this deductible, but Plan G does not.
However, all Part A and Part B out-of-pocket costs count towards the high deductible. As a result, there is no cost difference between the two plans.
What is the Difference Between Medigap Plan G and High-Deductible Plan G?
There are two big differences.
The first difference is the monthly premium. In most places, monthly premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. for the standard Plan G start at about $90 to $110 more than the high-deductible version.
The second difference is how much you pay out of pocket before the plan begins paying all costs. With the standard Plan G, you pay $226 out-of-pocket before the Medigap policy begins paying all Medicare-approved costs.
With an HDG policy, you pay $2,490 out of pocket before the plan begins paying all Medicare-approved costs. Although this may seem like a lot, consider that Medicare Advantage plans have an in-networkDoctors, hospitals, pharmacies, and other healthcare providers that agree to health plan members' services and supplies at a set price are in-network providers. With some health plans, your care is only covered if you get... annual limit as high as $7,550 (2023 maximum), which adjusts up every year or two.
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What are the Advantages of High-Deductible Plan G?
Its attractiveness is a lower monthly premium and competitive rates.
Generally, monthly premiums are around 50% lower than the average Medigap plan and around $100 per month lower than Plan G rates. An HDG plan will reduce your premium for Medigap coverage significantly.
The claims process is simple, too. Medicare tracks all Part A and Part B claims, cost-sharing, and Part B excess chargesA Medicare Part B excess charge is the difference between a health care provider’s actual charge and Medicare’s approved amount for payment., which you can view in your MyMedicare.gov account online. It ensures everything works smoothly once you meet your Medicare deductibles.
Who is Eligible for High-Deductible Plan G?
Anyone enrolled in both Medicare Part AMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. and Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. qualifies to apply for a High-Deductible Medicare Supplement Plan G (HDG).
However, just because you qualify to apply does not mean your application will be approved. There are reasons your application for a Medicare Supplement plan can be denied.
Can I Use Guaranteed Issue Rights to Enroll in a High Deductible Plan G?
Yes.
If you are just getting your Medicare benefits, and you are about to sign up for Medicare, talk to your health insurance agent about High Deductible G.
You have guaranteed issue rightsGuaranteed-issue is a right granted to Medicare beneficiaries and applies to Medicare Supplement insurance (aka, Medigap plans). All states and the federal government enforce this essential right, which protects Medicare beneficiaries from medical underwriting. for the six-month period after you first sign up for Medicare. However, if you enrolled in a Medicare Advantage plan when you first enrolled, you might also have a trial period right.
Your trial period right allows you to join a Medicare Advantage plan and try it out. If you don’t like it, and you have had the plan for less than six months, you can go back to Original Medicare and get an HDG Medigap plan.
How Much Does Medicare Supplement High Deductible Plan G Cost?
High Deductible Plan GThe high deductible version of Medicare Supplement Plan G has the same coverage benefits as the regular Medigap Plan G, but you pay all costs until your Medicare-approved costs reach the annual deductible. High Deductible... costs vary by region and the insurance company. HDG plans start at around $50 per month.
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Medicare Supplement High Deductible Plan G is Ideal for Those Who Need Help
If you need help controlling your healthcare out-of-pocket costs, an HDG plan might be the solution.
Do you live in an area with high Medicare Supplement premiums?
Do you live in an area with high average Medicare Advantage plan limits?
Do you have chronic health conditions that could put you in the hospital as you get older?
In these cases, an HDG plan might save you money.
An HDG plan saves money by limiting your coinsurance and hospital costs over time. If you have consistent appointments with specialists, use durable medical equipmentDurable medical equipment (DME) is equipment that is designed to last and can be used repeatedly. It is suitable for home use and includes wheelchairs, oxygen equipment, and hospital beds., and frequently need hospitalization, an HD plan G probably isn’t the right plan.
However, savvy Medicare beneficiaries have found a clever way to save money over time with their Medigap plan. They put away the difference between a standard Plan G and their HDG plan to pay the higher deductible as needed. That way the money is available when their coinsurance and hospital costs are high, but they save money with lower premiums.
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