Selling High Deductible F Supplements
Selling High Deductible F Supplements is easy once you understand how the plan works. The other factor is having a premium low enough to make the math works vs. a standard plan F. We will review the details of how the plan works and how to present it to your prospects.
How does the high F supplement work?
The high deductible F plan is a plan F with lower monthly premium and a deductible of $2,200 up front. (deductible for 2017) The biggest mistake agents and clients make is thinking they have to pay the first $2,200 of costs. This is not the case. With a high deductible F supplement, the client only pays the amounts not covered by Medicare A and B. As a result, they will only have the out of pockets costs not paid by A and B. If the deductible is met (it is not often met) the client will then have the full coverage of a regular plan F supplement. Most people do not consider how low the 20% for part B charges are with Medicare. The client only pays 20% of what Medicare allows which is a much lower number than what is normally charged by the provider. As an example, Medicare only allows a primary doctor to charge about $50 for an office visit. As a result, the client will only pay about $10 for the visit. The $10 will then be credited toward the $2,200 deductible.
How does the math work?
Its easy to make the math work in most states. NY is a good example. A Plan F in most parts of NY is $269.50 a month. The lowest cost high F plan is $64 a month. Keep in mind, the most a client can pay out of pocket on a high F is $2,200. If you add the $2,200 to the premium, it comes out lower than the annual premium for the regular plan F. The fact is most clients will not meet the deductible which will generate a large saving for them on an annual basis. The client will save money no matter what happens and will likely save substantial amounts if they fall within the normal average of A and B out of pocket costs for most seniors. Selling the high deductible F supplement makes sense no matter how much they do or do not utilize care when the premiums are low.
Example of High F vs. Standard plan F
- NY rates for high F supplement are $64 a month in boroughs, Westchester, Rockland and LI (except Brooklyn)
- Plan F is $269.50
- High F premium of $64 x $12 =768 + $2,200 = $2,968
- Regular plan F premium of $269.50 x 12 = $3,234.
- Save money even if you max the $2,200 deductible
- Rates are $53 in all other counties except Brooklyn
How much does the average senior spend out of pocket per year on the costs share for Medicare A and B?
The reality is most seniors will not come close to the annual deductible of $2,200 in any given year. Statistics of average senior cost out of pocket for A and B cost share have been provided below as an example. As you will see, the average out of pocket is very low. A senior that spends $754 out of pocket will be saving substantial money vs. being on a regular plan F supplement. As you cn see, the math literally supports selling high deductible F supplements instead of a regular plan F every time.
- 65 to 67= 9 out of 10 people will spend average of $541 for the year
- 68 to 72= 8 out of 10 people will spend average of $647 for the year
- 73+ = 7 out of 10 people will spend average of $754 for the year
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