Medicare Supplement High-Deductible Plan G. Where Does it Fit?
Medicare Supplement Plan High-Deductible Plan G can sometimes be a good fit for any clients. In this article, I will describe how a High-Deductible Plan G works and when I see it as a good fit for my clients.
Keeping What You Want
While the High-Deductible Plan G does have a higher deductible than other popular Medicare Supplements, the plan maintains the key advantages of a Medicare Supplement Plan:
Freedom to see any doctor or medical provider anywhere in the country, who accepts Medicare and agrees to treat you.
No “referrals” required by the insurance company.
No “prior authorization” required by the insurance company.
Predictable out-of-pocket costs with a reasonable “cap”.
How Does It Work?
The High-Deductible Plan G Medicare Supplement has a deductible of $2700 in 2023. You must also meet the Part B Medicare deductible which is $226 in 2023.
This does not mean however that you will pay the first $2700 of Medicare-Covered medical costs in the year. This is because Medicare itself has lower deductibles so it is Medicare that will pay its share first and the policyholder will be responsible for the costs that Medicare doesn’t pay until the members share of cost equals $2700. Plus the Part B Deductibles of $226 in 2023.
So, let’s look at an example of how this might work for an upcoming surgery. Let’s say your first claims are for a visit to a specialist and they send you for an MRI and bloodwork. Since these charges fall under Part B (medical/outpatient services) they are subject to Medicare’s Part B deductible, which is $226 in 2023.
After the deductible, Medicare pays 80% of the Medicare approved amounts, and you pay 20%. So lets say that the total charges are $600 based on Medicare's fee schedule. In this example, you would pay the first $226 (the Part B deductible) plus 20% of the remaining $374, or about $74 and Medicare would pay its 80%. In this example the $300 you paid would go towards the $2700 deductible on the High-Deductible Plan G so the plan doesnt pay anything yet.
Continuing on with our example, let's say you now go back to the specialist to review your test results and you need surgery which will have to be done in the hospital. So you have another specialist visit of around $100 and have to pay the $1600 Part A hospital deductible. You also pay 20% of Part B physicians services for your surgeon, anesthesiologist, etc. Now you’ve paid a total of $300 + $100 + $1600. Now when you add the 20% for your doctors, your out-of-pocket costs have reached $2700 and you are done paying for the year.
Now you go back to the specialist, have another MRI and the doctor orders six weeks of physical therapy, two days a week. For all of that plus any additional covered services, you pay nothing!
Basically the plan puts a cap on your out-of-pocket costs for all Medicare-Covered medical services at the deductible amount ($2700 in 2023). This is a fairly reasonable cap considering all the core Medicare Supplement benefits you continue to enjoy on this plan.
Where Can It Fit?
These are some of the situations where I see the High-Deductible Plan G being a good fit:
Any client who wants the freedom to choose their own doctors in the event of a significant medical issue but who can’t afford a plan nor a Plan G Supplement.
Here are some situations where I think the High-Deductible Plan G makes sense:
In Rural Areas: Retirees living in rural areas may not have access to any or maybe one or two mediocre Medicare Advantage Plans and even if there are a couple of Medicare Advantage Plans, they may have an extremely limited doctor panel and/or high out-of-pocket expenses. In this case, a Medicare Supplement High-Deductible Plan G can keep premium costs low, greatly expand the choice of providers and usually with a lower maximum annual out-of-pocket exposure than a mediocre Medicare Advantage plan.
As a back-up to the VA: Some veterans use the VA but want a back-up plan if they dont feel the VA’s offering them timely or optimal care, but they dont want to spend the premium for a Plan G or a Plan N.
Super-Healthy with great genetics: People who are extremely healthy, exercise, eat right and have great family genetics may take a chance that over the long-run the High Deductible Plan G will save them money.
The main risk of a High-Deductible Plan G is if you develop a long-term chronic health condition that requires expensive treatments year after year. In that case, you may end up spending more money out-of-pocket each year on healthcare costs than the amount you saved in premium.
