How Does High Deductible Plan G Work for Medicare?
I’ve helped people with Medicare understand their coverage, compare Medigap Plans, and know when to sign up since 2012. During that time, I’ve been answered countless questions. One that comes up frequently is “How does High Deductible Plan G work”? It’s a question that makes sense. High Deductible Plan G can be an intelligent choice, but it’s not suitable for everyone, especially if you aren’t sure what to expect.
Medicare can be confusing enough on its own. Let’s examine this specific Medicare Supplement Insurance and how it works. And be sure to read to the end because I will share a little secret about how you can make this plan work for you (if it’s suitable).
What is High Deductible Medicare Supplement Plan G?
First, you should know that High Deductible Plan G (sometimes shortened to HDG) is a type of Medicare Supplement Insurance (Medigap plan). This means you must enroll in Medicare Part A and Medicare Part B before enrolling.
HDG helps cover some out-of-pocket costs Original Medicare doesn’t pay, such as deductibles, copayments, and coinsurance. This means it supplements your Original Medicare coverage.
This might make you wonder what makes HDG different from other Medigap plans, such as Medigap Plan A or Medigap Plan B? That’s where that “deductible” part of the name comes in.
How Does High Deductible Plan G Work?
Here’s the key difference: You are responsible for paying all your Medicare-approved healthcare expenses out-of-pocket until you meet the deductible on the HDG plan. Once that deductible is reached, the plan begins paying your covered healthcare costs.
To put this another way, imagine that HDG coverage sits behind a door with a dollar amount on it. That dollar amount, your deductible, is what you have to spend before the plan begins to pay benefits.
That “door” doesn’t exist with a traditional Medigap Plan G. Instead, after Medicare pays its portion, the plan immediately pays for your remaining costs. But with an HD Medigap plan, you first must pay for things on your own.
In [medicare_costs value=”medicare-cost-year”], that magic number for an HD Medigap plan is [medicare_costs value=”medigap-high-deductible”]. This is higher than most other Medigap plans. Before High Deductible Plan G picks up the rest of the tab, you must pay [medicare_costs value=”medigap-high-deductible”] worth of covered healthcare costs (including doctor visits, hospital stays, and surgery).
High Deductible Plan G Coverage Breakdown
So, let’s review what High-Deductible Medigap Plan G covers. It’s exactly like the regular Medicare Supplement Plan G (which includes the Medicare Part B deductible), except you have that deductible to meet first. Look at this table showing some ordinary Medicare expenses and how those costs would (hypothetically) be covered. Remember that these costs are just hypothetical. Your actual costs may vary.
| Cost | Amount (Hypothetical) | What You Pay | What HDG Pays |
|---|---|---|---|
| Medicare Part A Deductible | $1,600 | $1,600 (Applies to Deductible) | $0 |
| Part B Coinsurance for Doctor Visit | $40 | $40 (Applies to Deductible) | $0 |
| Emergency Room Copayment | $163 | $163 (Applies to Deductible) | $0 |
| Hospital Stay Coinsurance | $4,000 | $937 (You’ve now met the $2,700 deductible.) | $3,063 |
| Skilled Nursing Facility Coinsurance | $4,000 | $0 | $4,000 |
In the beginning, paying those out-of-pocket costs may not sound appealing. So, let’s discuss who chooses a high-deductible Medicare Supplement Plan and why it could make sense.
Who should consider High Deductible Plan G?
An HDG plan might make sense if you think you’ll have low medical costs during the year. Maybe you’re healthy right now. Or, perhaps you prefer to pay a lower monthly payment. This is because Plan G with a deductible has lower monthly premiums than a standard Plan G.
But this means you’ll pay more out of pocket if you need medical care. You’ll have to pay all your medical costs until you meet the deductible. With an HDG plan, the deductible is higher than the standard Medicare Plan G. The only deductible you pay with the regular Plan G is the annual Part B deductible.
Once you meet your deductible, your plan starts to pay. But think about this. You could save money on your Medicare costs yearly if you’re generally healthy. This is because you’re paying lower monthly premiums.
How are the High-Deductible Plan G premiums compared to standard Plan G?
You might be surprised to learn that High-Deductible Plan G premiums are much lower than those for a standard Medicare Supplement Plan G! You pay for more medical costs until you reach the deductible.
Think about it like this. Would you rather pay a little bit more each month, knowing that your plan will start paying for your medical bills almost immediately? Or would you prefer to spend less each month, even though you’ll have to cover more medical costs out of pocket until you hit your deductible?
That’s the main difference between a High Deductible Plan G and a standard Plan G. It depends on how you want to manage your healthcare costs.
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High Deductible Plan G Pros and Cons
To determine if HDG might work for your situation, weighing the potential pros and cons can help. It would be best to compare costs for a deductible Medicare plan against a regular Plan G.
HDG Plan: Pros
- Lower monthly Medigap premiums compared to regular Plan G.
- The same great coverage as Plan G (after meeting the deductible).
- Potential to save money on healthcare costs if you remain relatively healthy.
HDG Plan: Cons
- Higher upfront healthcare costs due to the deductible.
- You may pay more overall for healthcare than other Medigap Plans (especially if you require frequent care).
The key is to remember that you must pay those costs before your coverage begins. This makes High Deductible Plan G more suitable for individuals in good health who feel confident they can afford the deductible if needed. Of course, every individual has a different medical history and financial situation, so it is wise to speak with a licensed insurance agent before making any Medicare decisions.
This content is for informational purposes only and should not be considered professional advice. Contact a licensed insurance agent for personalized assistance.
High Deductible Plan G vs. Medicare Advantage
Medicare Advantage plans, sometimes called Part C plans, are different. Instead of the government paying your bills directly, you pay a private insurance company to manage your Medicare benefits.
These plans might look good at first. You might get low or even no monthly premiums, and some offer extra benefits that the HDG plan doesn’t have, like dental, vision, or hearing coverage. But this is where it gets tricky. While those benefits are excellent, you’re usually stuck in that plan’s network of doctors and hospitals.
Think of it like this: a high-deductible Plan G is like buying groceries at a big supermarket. You have many choices and can go to any doctor who accepts Medicare. Medicare Advantage is more like shopping at a specific grocery store. It might be cheaper, and they might have some things the supermarket doesn’t. But you can only shop there, and their selection might be smaller.
Can I switch from a standard Medigap Plan G to High Deductible Plan G?
You bet! You can switch from a Medigap Plan G to a High Deductible Plan G. But you’ll need to consider a few things first. Think about your health and how much you usually spend on healthcare. Switching to a High Deductible Plan G might be good if you’re healthy and don’t go to the doctor too often. Why? Because you’ll pay less each month for your plan.
However, there’s a catch. With a High Deductible Plan G, you’ll have to pay more out-of-pocket before your Medicare benefits kick in. This means you’ll be responsible for a larger deductible. In [medicare_costs value=”medicare-cost-year”], that deductible is [medicare_costs value=”medigap-high-deductible”]. Once you meet that deductible, your High Deductible Plan G will work like a regular Plan G, covering almost all your Medicare costs.
Does High Deductible Plan G Cover Foreign Travel Emergency Care?
So you are considering signing up for a Medicare Supplement Plan G, but you are worried that it won’t cover you when you travel outside the U.S. This is a common question I get from people new to Medicare.
Medicare offers minimal coverage if you have an emergency outside the country. Although there are some exceptions, you will probably have to pay the entire bill yourself! This is why it’s so important to get a supplement plan like Plan G. But does Plan G cover this?
Yes, Medicare Supplement Plan G does give you some coverage if you have a medical emergency outside the U.S., but there are some restrictions. Plan G will cover up to 80% of your emergency medical costs only after you pay a $250 deductible. This is the same deductible you have for any Plan G benefit. But one more catch – this benefit has a lifetime limit of $50,000.
Will I still need to pay Medicare Part B premiums with High Deductible Plan G?
You bet. Think of it this way. Even though you chose a Medicare Supplement High Deductible Plan G to help pay your medical bills, you’ll still need to pay your Part B premium. That monthly premium makes sure you have Medicare Part B coverage in the first place.
Think of High Deductible Plan G like car insurance with a deductible. You pick a plan with a deductible that fits your budget, but you still have to pay for car insurance, right? It’s the same idea here.
Although you’ll be paying your Part B premium, remember this is how Medicare works. Your premium helps pay for your healthcare costs throughout the year. This helps keep Medicare running for you and everyone else.
Are there any additional out-of-pocket costs with High Deductible Plan G?
You bet! Even though Medicare beneficiaries say High Deductible Plan G doesn’t have expensive monthly premiums, it does have a high deductible. This means you’ll pay more for your healthcare costs before your plan starts to pay anything.
Consider it like this: let’s say you have a medical bill for $10,000. If you have an HDG Plan, you must pay [medicare_costs value=”medigap-high-deductible”] before your plan covers anything. But, once you’ve paid your deductible, your plan will cover your healthcare costs at 100%.
But that doesn’t mean there aren’t other costs to consider. You may still have to pay copays or coinsurance for certain services, like doctor’s visits or prescription drugs. It’s important to consider your health needs and how much you can afford to pay out-of-pocket. That way, you can decide if High Deductible Plan G suits you.
How to make an HDG Plan work for you
You’ve read this far and know the good and bad about HDG Medigap plans. So, let me share a little secret that’s been working for me.
If you are in good health and actively working to stay that way, consider mitigating the risk of an HDG Plan by putting what you save each month into savings. I do this, and it works for healthy and active people.
Here’s how.
Let’s say, for example, the average cost of a regular Medigap G plan in your area is $140, but the HDG plan is only $50. That’s a savings of $90 per month ($1080 annually). If you put the monthly difference in savings, you’ll have enough to cover the full deductible in less than three years.
There’s a chance you’ll never reach the full deductible in a year, and there’s a possibility that you will. Either way, you can use what you put away towards your out-of-pocket costs when you see your doctor, need emergency care, etc.
Ask your insurance agent if this scenario might work for you. Meanwhile, grab your free report with HDG Plan rates from me. Select “lowest cost plans,” and I’ll know what you want.
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Conclusion
High Deductible Plan G might be the right choice if you want the same comprehensive coverage as Medigap Plan G but with lower monthly premiums. Remember, though, how does a high deductible plan g work in practice? You are responsible for paying 100% of your covered healthcare costs until you reach the plan’s [medicare_costs value=”medigap-high-deductible”] annual deductible.
After meeting the deductible, an HDG Plan picks up coverage for eligible expenses. If you think High Deductible Plan G suits you, get a personalized Medigap quote to see what plans and prices are available in your zip code.