High Deductible Plan G
Medicare high deductible plan G is a great choice for Medicare beneficiaries. There are a number of misunderstandings about the benefits when it comes to the plan. This blog will help you learn about the plan and why it is an excellent choice for beneficiaris preferring a lower premium Medigap plan. In a number of states the math favors a high deductible plan G over plans F and G in any circumstance.
High Deductible Plan G: Benefits
The plan is the same as a standard plan G with only one difference. The high deductible version has a deductible that needs to be met before the standard G benefits begin. As a result, the premium of high G is substantially lower than that of a plan G. In some states, the difference is more than others. Lets look at the benefits of both plans to get a better understanding:
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Standard Plan G benefits:
- Plan G covers all Medicare approved service at 100% after an annual deductible of $233 for the year has been met. In other words, the beneficiary pays the first $233 of medical costs and then has 100% coverage for Medicare approved medical services.
- Plan G has a monthly premium that varies based on the state and age of the person enrolling. An example would be plan G in CT. The lowest cost plan G in CT is $206.00 per month. As a result, the total cost of plan G will be the monthly premium for the year and the deductible.
- $206 x 12 months = $2,472.00 + deductible of $233 for a total of $2,705
- High deductible plan G covers all Medicare approved services at 100% after the $233 deductible and the plans deductible of$2,490.
- About the $2,490: IMPORTANT: The high deductible G plan will not provide the same coverage as the standard plan G until the person enrolled in the plan has paid $2,490 in cost for the year. It is very important to note, the $2,490 is not a standard deductible. With a Medicare supplement, Medicare will still cover their portion of the medical costs. The member then pays what is left over (20% of the costs on Part B) and the standard Part A hospital deductible of $1,556.00). In other words, this is not a straigh deductible with the member paying for the first $2,490 of costs. They are only paying for the costs not covered by Original Medicare.
High Deductible Plan G: Average cost toward the $2,490 per year
How much does a person spend towards the deductible in an average year? The answer usually surprises people. The average is around $650 a year for a person age 65 to 70. Two key things make the average so low. The first being the fact that only the amount not covered by Medicare is going toward the deductible as described above. The other reason is that Medicare negotiates medical charges. So while a doctor may normally bill $200 for a specialist visit, if they are participating with Medicare they would only be allowed to bill about half of that amount. The member on High Deductible Plan G only pays 20% of the negotiated amount.
High G vs. Plan F or G
High G monthly premiums average between $24 and $80 a month depending on where you are in the country. If you look at a state like Connecticut, high deductible plan G is $50 a month. Campare that to a Plan F at $270 a month. The premium difference is $220 a month. That is $2640 a year in premium. The high deductible G is usually going to save substantial money.