What Is Medicare Supplement High Deductible Plan G?
High Deductible Plan G – There are several Medicare supplement plans available to you, but one that isn’t often considered is the high-deductible Plan G. High deductible plans are associated with lower monthly premiums and higher out-of-pocket costs.
Medigap Plan G Coverage and Benefits
Of all the ten Medigap policies, Medigap Plan G provides the most complete coverage, assuming you aren’t eligible for Plan F. Plan G has no annual deductibles or out-of-pocket costs for procedures covered by Original Medicare. The only thing you’ll be responsible for paying is the Part B deductible, which is $226 in 2023.
Of course, because it provides such great coverage, its monthly premium is one of the most expensive compared to other Medigap plans. Even so, it remains the most popular Medigap plan because of the excellent coverage it provides its members.
Plan G includes the following benefits:
- Part A deductible
- Part A coinsurance plus an additional 365 days of hospital costs after Medicare benefits are exhausted
- Part A hospice coinsurance/copayment
- Part B coinsurance/copayment
- Part B excess charge
- Blood (first 3 pints)
- Skilled nursing facility care coinsurance
- 80% of foreign travel exchange
- No out-of-pocket limit
The high-deductible version of Plan G (also referred to as Medigap High-G) has the same coverage but with lower monthly premiums. The annual deductible, however, is $2,700 in 2023. After you have met this deductible, Plan G will begin paying 100% of any service covered by Medicare.
Before the deductible, Original Medicare will cover 80% of the covered costs.
How Much Does High Deductible Plan G Cost?
Medigap Plan G averages between $100-$200 per month, depending on the carrier, location, and the member’s age. Medigap Plan High-G, however, has premiums as low as $40-$80 per month. Not a bad trade-off if you have the funds to cover the deductible.
Who Should Consider High-Deductible Plan G?
One example of an individual who would benefit from Plan High-G is someone who is at the “break-even” age.
A person’s yearly savings in Medigap High-G premiums compared to regular Plan G premiums will reach or surpass the annual deductible at some age. This is known as the “break-even” age.
There is no one break-even age. The age at which an individual breaks even depends on what that individual is paying for the policy. As we’ve discussed, that depends on the insurance company, location of residence, and the member’s age.
Let’s discuss an example using an 80-year-old male.
This man is currently paying an annual premium for Medigap Plan G of $3,600. However, if he switched to Medigap Plan High-G, his annual premium would drop to $800. That’s a difference of $2,800, almost the exact amount needed to meet the high deductible of Plan High-G.
If this man is also in fairly good health, it may make sense to switch him to the high deductible plan, as he may never have enough expenses to meet the deductible, thereby saving him some money overall.
Arriving at the break-even age is not the only reason to consider a high deductible Medigap plan.
It’s also a great choice for Medicare beneficiaries who need lower monthly premiums, are financially stable enough to afford the high deductible and/or rarely visit the doctor.
Who Is NOT a Good Candidate for High-Deductible Plan G?
Simply put, beneficiaries who are not near the break-even age, are in poor health and require frequent visits to their doctor, and do not have a safety net of savings should not consider high deductible Plan G.
Other Medigap High-Deductible Options
Currently, the only other high-deductible Medigap Plan is Plan High-F. It is very similar in coverage to Plan G, but you must have turned 65 before January of 2020 to be eligible for this plan.
HSA: A Great Way to Pay Your Deductible
A high-deductible Medigap plan may also look appealing to someone who had a similar high-deductible health insurance plan with their employer before retirement.
These high-deductible plans allowed members to open a Health Savings Account (HSA). Individuals with an HSA enjoy triple tax benefits. The funds they contribute to an HSA are made before being taxed, can be invested and grow tax-free, and spent on medically-related expenses tax-free.
Many people use HSAs as savings for retirement and the medical costs associated with aging. If you had an HSA while employed, this would be a great source of cash to use if you enroll in a high deductible Medigap option.
If you want to find out if Medigap Plan High-G is a practical choice for you, give us a call! We can see how close you are to the break-even age and discuss your current healthcare needs to see if a high-deductible plan makes sense.
