The big Medicare news heading into 2020 is the semi-exit of Medicare Supplement Plan F (more on this later). Many people who have considered getting a high deductible Medicare supplement are left wondering what their options will be when Plan F and its accompanying high deductible Plan F plan “go away”.
For beneficiaries who become eligible for Medicare on or after January 1, 2020, a High Deductible Plan G option will be available. This plan will be like the High Deductible Plan F; however, it will not cover your Part B deductible.
As with any new plan, there are looming of questions of how a High Deductible Plan G will stack up against the High Deductible Plan F. Here’s what you need to know about the High Deductible Plan G:
- Original Medicare will still pay its 80% portion
- You will pay the other 20% until you satisfy the $2,340 deductible
- After the out-of-pocket deductible is met, the plan will pay the same benefits as regular Plan G
- The plan does not cover the Part B deductible (just like Plan G)
- The annual Part B deductible that you will pay counts toward the total out-of-pocket deductible
Both newly eligible Medicare beneficiaries and previously enrolled beneficiaries will be able to get a High Deductible Plan G.
With a high deductible Medicare supplement, the best place to begin understanding coverage is with the original plan. In this case, Medicare Supplement Plan G is the parent plan if you will.
To sum it up, Plan G covers your whole portion of medical benefits that are left over after Original Medicare has paid its portion except for the Part B deductible.
Similarly, a High Deductible Plan G provides coverage the same way but only after you reach your annual deductible.
The dry version (unless you like legal jargon) is that The Medicare Access and CHIP Reauthorization Act of 2015 (aka MACRA) was passed making significant changes to Medigap plans as we know them. This legislation was designed to prohibit any Medigap plan from covering the Medicare Part B deductible, also referred to as first-dollar coverage.
The part you need to know is that for those who are newly eligible for Medicare on or after January 1, 2020, Plans C and F (including the high deductible option) will no longer be available.
BUT don’t get this semi-exit confused with the incessant sound bites that say Plan F is going away for good. Beneficiaries that were eligible for Medicare before 2020, will still be able to stick with their plan and even change carriers with the same plan beyond 2020.
It depends on your financial situation. With such a large deductible, I cannot say that this plan is my first recommendation, but certain situations may make this plan a better option than the alternative of Original Medicare alone.
These plans typically find their popularity among cost-conscious consumers who don’t have the budget for a traditional Medicare Supplement plan but are also aware of the potential for massive out-of-pocket costs with Original Medicare on its own.
The best thing you can do here is some simple math. High deductible plans almost always mean low premiums (that’s the tradeoff). So, would that monthly lower premium fit better with your budget even knowing that you could be spending an additional $2,340 out-of-pocket?
Or would you rather pay a higher monthly premium and not have to worry about paying out-of-pocket costs throughout the year?
I will say, the feedback we get from clients that go this route is that the lower premiums are often not worth the trouble. My best advice before enrolling in a high deductible plan is to do your homework and fully understand what you’re signing up for before you make your decision.
Our team will discuss your options
As this plan becomes available in 2020, it is important to note that not every insurance carrier is obligated to offer it and premium prices will vary with the ones who do.
You can rest easy knowing the agents here at Boomer Benefits will get to know your situation and give you their best recommendations for coverage. Our agents do much more than just comparing rates. We will show you rate increase histories and financial ratings for each company that we quote you premiums for.
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