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Why Offer Medicare HDG Plans

The question; why offer Medicare HDG Plans, because the Medicare market is changing rapidly. Agents must stay ahead of the curve to remain successful. Many major carriers are scaling back their Medicare Advantage (MA) offerings and even cutting commissions on some plans. This leaves agents with fewer options to present to clients. This is where HDG Plans can make all the difference.

The Current Landscape of Medicare Advantage

In recent years, Medicare Advantage has been one of the most popular plan options among seniors. However, for the last couple years, carriers are:

• Pulling plans from the market – especially PPOs, which have traditionally been popular for their provider flexibility.
• Reducing commissions – some carriers are paying no commission on certain MA products, leaving agents with fewer options to offer.
• Tightening supplemental benefits – carriers are scaling back some of the extra benefits that once attracted clients, making MA plans less competitive.

For agents, this creates a challenge: how do you provide value to your clients while maintaining a sustainable business model?

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Why HDG Health Plans Stand Out

HDG Health Plans provide a strong alternative that agents should be offering. Here’s why:

1. Plan Stability

Unlike some Medicare Advantage carriers that are exiting markets or restructuring benefits, HDG Health Plans are built for long-term stability. This ensures agents can confidently enroll clients without worrying about sudden disruptions.

2. Expanded Client Options

As carriers discontinue PPOs and other MA plans, seniors need reliable choices that meet their healthcare and financial needs. HDG offers products that can help fill the gaps left by Original Medicare. This gives agents a competitive edge in retaining and growing their book of business.

3. Consistent Compensation

With some carriers cutting or eliminating commissions on MA plans, agents need products that continue to provide fair, reliable compensation. HDG Health Plans recognize the value of the agent’s role and support them with commission structures that make sense.

4. Strong Value Proposition for Clients

Carriers design HDG Plans with seniors in mind, balancing affordability, access to care, and flexibility. This makes them attractive alternatives for clients who may be frustrated with shrinking MA networks or reduced plan options.

5. Ability to seek care from most providers

Unlike MA plans, Medicare supplements allow the enrollee to seek care form any provider that accepts Medicare. This can be a huge advantage to any enrollee.

Agents learn why and how to sell ancillary products – watch a quick YouTube video

The Opportunity for Agents

As the Medicare market shifts, agents who adapt quickly will come out ahead. By offering HDG Health Plans, agents can:

• Differentiate themselves from competitors still relying heavily on shrinking MA offerings.
• Provide solutions to clients facing plan cancellations or limited coverage options.
• Build a more stable book of business with products that pay fairly and retain members long-term.

Stay up-to-date on agent events and information

The Medicare Advantage space is in transition, and relying solely on it may leave both agents and clients at a disadvantage. By incorporating HDG Health Plans into your portfolio, you can protect your business, serve your clients more effectively, and position yourself as a trusted advisor during a time of change.

Now is the time to diversify your offerings, and HDG Health Plans should be at the top of your list.

As Medicare beneficiaries consider supplemental coverage to fill the gaps left by Original Medicare (Parts A and B), many turn to Medigap plans. Among them, The HDG (High Deductible Plan G) stands out for the comprehensive benefits it provides at a lower monthly premium, but with a catch: a high annual deductible. If your client is considering a HDG Plan, understanding the pros and cons of HDG Plans will help them make an informed decision.

What Is HDG

HDG or High Deductible Plan G provides the same benefits as standard Medigap Plan G; one of the most comprehensive Medigap options, but only after the beneficiary meets an annual deductible. Each year, CMS decided what that deductible amount will be; in 2025, the deductible is $2,800.

Once the beneficiary pays the deductible for the year, the plan pays 100% of covered Medicare expenses, just like a standard Plan G.

Pros of HDG

1. Low Monthly Premiums

The biggest selling point of the HDG plans is their affordability upfront. The premiums for HDG Plans is typically much lower than standard Plan G, in some cases, less than 1/3 of the price, making this a great option for healthy enrollees or individuals living on a fixed income who want to be prepared for unexpected health issues.

2. Full Coverage

Once the beneficiary meets the annual deductible, HDG covers:

• Part A coinsurance and hospital costs
• Part B coinsurance/copays
• Blood (first 3 pints)
• Skilled nursing facility coinsurance
• Part A hospice care coinsurance/copays
• Medicare Part A deductible
• Part B excess charges
• Foreign travel emergency care (up to plan limits)

3. Good Option for Health Individuals

Those who rarely seek medical care may not reach the annual deductible; in other words, out-of-pocket spending could stay well below the cost of a standard Plan G’s premium.

4. Standard Benefits

Just like all other Medicare Supplement plans; HDG is standardized. Therefore, after the deductible is met, the benefits are the same regardless of insurer. The only thing to compare are the premiums and service quality, not the coverage.

Cons of HDG

1. High Upfront Costs

Individuals who require frequent care (doctor visits, outpatient services, hospital stays) pay out-of-pocket until they reach the $2,800 (in 2025) deductible. For some, this could all happen early in the year, and the savings from lower premiums may not offset that.

2. Not Ideal for Some Budgets

For individuals on a tight or fixed income, facing unexpected out-of-pocket expenses could be difficult to manage before the deductible is met, even if the plan is technically cost-effective over time.

3. Premiums Aren’t Fixed

Although the premiums are much lower than standard Plan G, HDG premiums (like all Medigap plans) can still increase annually, leading to less savings over time. It may be a good idea to check the rate history of the insurer before choosing a plan.

4. Deductible Increases

Each year, CMS sets the annual deductible and it usually has a slight increase each year. This unpredictability can cause some issues with long-term budgeting when compared to standard plans.

Who May Be a Good Fit For HDG

• Healthy individuals with few healthcare needs
• Younger Medicare beneficiaries (e.g., age 65-70) not expecting major procedures
• Those comfortable with financial risk with the means to pay the deductible if necessary
• Budget-conscious individuals looking for low monthly expenses

Medicare HDG provides similar peace of mind to regular Plan G. It is just delayed until after the deductible is met. It’s a good option for those who can afford some out-of-pocket risk in exchange for lower premiums. As with all coverage options, it’s not a one-size-fits-all solution.

A licensed Medicare agent can help run the numbers and explore quotes tailored to an individual’s specific needs.

Because there are so many regulations for Medicare sales, agents need to constantly be learning. That is why we will discuss Medigap Guaranteed Issue Rights in this post. This is a subject that is crucial to understand but often misunderstood.

Medigap Guaranteed Issue Rights

Guaranteed Issue (GI) Rights are protections under federal law that provide beneficiaries the right to purchase certain Medigap (Medicare Supplement) policies without having to go through medical underwriting. That means insurance companies can’t:

• Deny the beneficiary enrollment in a policy
• Charge enrollees more based on health
• Impose waiting periods for pre-existing conditions (in most cases)

These rights kick in during specific situations, often tied to changes in your health coverage or life circumstances.

When Guaranteed Issue Rights Apply

Here are some common scenarios that trigger GI rights:

Turning 65

Anyone who turns 65 has a 6 month period where they can enroll in a Medigap plan without having to go through underwriting.

Loss of Employer or Union Coverage

Individuals that have health coverage through an employer or union (including COBRA) that ends have 63 days from the end of that coverage to buy a Medigap policy using GI rights.

Medicare Advantage Plan Leaves a service Area

If a Medicare Advantage (MA) plan no longer provides service the enrollee’s area, is terminated, or they move out of the plan’s service area, they can return to Original Medicare and buy a Medigap policy under GI protections.

Beneficiary Tries a Medicare Advantage Plan for the First Time

Those who joined an MA plan when they were first eligible for Medicare at 65 and switch back to Original Medicare within the first 12 months can buy any Medigap policy offered in their state.

Medigap Insurance Company Goes Bankrupt or Misleads You

If the Medigap insurer goes out of business or the beneficiary is misled into buying a policy, they have GI rights to purchase another policy.

Trial Rights

In some cases, beneficiaries have “trial rights” that allow them to try out an MA plan and return to a Medigap plan under GI protections. This typically applies if they dropped a Medigap policy for an MA plan and want to switch back within 12 months.

Rules and Timelines

• Typically individuals have a 63-day window from the date previous coverage ends to use their GI rights.
• The plans that are guaranteed issue depend on eligibility and location. The standard Medigap plans are Plans A, B, C, F, K, or L.
• The federal government mandates guaranteed issue rights, although some states offer broader protections. It is important to check the rules for each state.

Watch a YouTube video on Medicare Supplement Underwriting GI & non-GI states

Why Guaranteed Issue Rights Matter

Without GI rights, applying for Medigap outside the initial enrollment period often means going through medical underwriting. Those who have pre-existing conditions could be denied coverage or charged more.

GI rights are a safeguard. They ensure that when life throws a curveball like; losing coverage, moving, or simply changing your mind, beneficiaries can access supplemental coverage without penalty.

Birthday Rule

There are 6 states that allow beneficiaries to change Medigap plans without underwriting during a specific period before/after their birthday each year on a GI basis. The states that have this rule are: CA, ID, IL,KY, LA, MD, NV, OK & OR. Each of these states has it’s own specific rules for this.

Important:

Some states allow beneficiaries to change Medigap plans any time or at specific times without undergoing medical underwriting. These states are: CT, NY, MA & ME.

In CT & NY enrollees change Medigap plans anytime of the year without underwriting. Massachusetts offers an annual open enrollment where beneficiaries do not have to go through underwriting. In Maine there is an open enrollment in June where Medicare Supplement enrollees can switch to a similar or lower benefit plan without underwriting.

Anyone applying under GI rights; insurance companies may request documentation (like letters from the former insurer). Keeping all notices and paperwork handy makes the application process smoother.

Medigap Guaranteed Issue Rights are an important part of the Medicare landscape, especially for those navigating transitions. Understanding when and how they apply allows you to help clients make informed choices and avoid gaps in healthcare coverage.

Because navigating Medicare enrollment period options can feel overwhelming, we will explain one specific enrollment opportunity. For beneficiaries seeking flexibility in healthcare coverage, Medicare supplements provide a good option. Because of this, the Medicare Supplement birthday rule is an important policy to understand. This rule, available in certain states, offers a window of opportunity to change Medicare Supplement (Medigap) plans without medical underwriting.

What Is the Medicare Supplement Birthday Rule

The Medicare Supplement birthday rule allows beneficiaries to switch Medigap plans annually around their birthday without undergoing medical underwriting. This means insurers cannot deny coverage or charge higher premiums based on health status during the designated timeframe.

Medicare supplement plans help cover out-of-pocket costs not paid by Original Medicare, such as copays, coinsurance, and deductibles. However, outside of the initial enrollment period, switching plans typically requires medical underwriting, which can be a barrier for those with pre-existing conditions. The birthday rule removes this obstacle during its specific enrollment window.

States That Have the Birthday Rule

As of now, the Medicare Supplement birthday rule is not a federal policy; it is enacted at the state level. Currently, 8 states including California, Idaho, Illinois, Kentucky, Louisiana, Maryland, Nevada and Oregon have implemented variations of this rule. Each state’s version differs slightly in terms of timing and eligible plans:

California

Beneficiaries have 60 days from the first day of their birth month to switch Medicare supplement plans to enroll in one with the same or a less benefits. They also have the option to switch insurance carriers during this period.

Idaho

Those who reside in ID have 63 days from their birthday to switch Medicare supplement plans with the either the same or less benefits. They can also switch to another insurance carrier if they like.

Illinois

Beneficiaries in IL have 45 days from their birthday to change Medicare supplement plans with either the same or less benefits. This rule only applies to plans with the existing insurance carrier or an affiliate of the current carrier. The affiliate carrier was added in 2024. In order to To qualify for the birthday rule in IL, beneficiaries must be between 65 and 75.

Kentucky

As of 1-1-24, KY allows Medicare supplement enrollees to switch to another supplement carrier that offers a plan with the same benefits as their current plan. They must switch within 60 days of their birthday.

Louisiana

In the state of LA, beneficiaries are given 63 days from their birthday to switch to another Medicare supplement plan with equal or lesser benefits. Enrollees are only permitted to enroll in a plan offered by either their current carrier or an affiliate of their current insurer.

Maryland 

As of July 1. 2023, beneficiaries have 30 days from their birthday to change Medicare supplement plans with either equal or less benefits than their current plan.

Nevada

In the sate of NV, the birthday rule allows beneficiaries 60 days form the first day of their birthday month to change supplement plans to one with the same or less benefits. It is also permitted to switch insurance carriers.

Oregon

Beneficiaries have 30 days from the first day of their birth month to switch Medicare supplement plans to another with the same or fewer benefits. They can also change insurance carriers.

Please note; beneficiaries and their agents must verify the state specific rules and timelines.

Watch a quick YouTube video on Medicare enrollment periods

How the Birthday Rule works

Each year plan enrollees should evaluate their current supplement coverage and decide if it still meets their needs. A licensed Medicare agent can help compare available plan options to find one that best suits the needs of the enrollee. They will also be able to advise of the applicable enrollment window using the appropriate birthday rule for each eligible state.

Beneficiaries must submit all applications before the enrollment period ends. Insurers cannot deny applications submitted during the birthday rule period. They are also prohibited from increasing premiums based on health conditions.

Benefits of the Birthday Rule

The birthday rule provides several advantages for beneficiaries. This includes the ability to adjust their coverage to better align with their healthcare needs and budget. It also allows enrollees an opportunity to change plans without fear of rejection.

Considerations for Beneficiaries

Although the birthday rule provides some significant benefits, there are a few important considerations:

State-Specific Rules: The availability and details of the birthday rule depend on where each beneficiary resides. It is not available in every state.

Plan Restrictions: In general, the rule applies only to plans that offer equal or lesser benefits, so beneficiaries cannot use it to upgrade coverage.

Timing: Those who miss the enrollment window must wait until next year’s birthday period to change plans.

Learn about Medigap guarantee issue rules; click here

The Medicare Supplement birthday rule is valuable for eligible beneficiaries. It provides an annual opportunity to change coverage without medical underwriting.