High-Deductible Medicare Supplemental Insurance – What You Must Know Before Buying

High-Deductible Medicare Supplemental Insurance – What You Must Know Before Buying

High-deductible Medigap or Medicare supplemental insurance plans G and F cover gaps in the Original Medicare coverage, including coinsurance, deductibles, and co-pays. Some Medigap plans have high deductibles and lower premiums than standard Medicare plans. However, whether or not a high-deductible plan is worth it depends on how much you can save on its premium compared to the standard plan.

Read on to learn more about high-deductible Medicare supplemental insurance and when it does worth your money.

How Does High-Deductible Medicare Supplemental Plan Work?

High-deductible and standard Medicare plans offer the same benefits. However, the only difference is when the coverage kicks in. While standard plans start paying for the covered services from the beginning, high-deductible plans cover the benefits only after you meet the annual deductible.

How Much Does High-Deductible Medicare Plan Cost?

The cost of a high-deductible plan depends on the premiums and the deductible. The high deductible ($2490 in 2022) set by law is constant for everyone, including cost-sharing and part B deductible you pay out of pocket.

However, premiums vary from person to person. Private health insurance companies offering high-deductible plans set premiums based on policy holders’ age, health condition, gender, location, tobacco use, etc.

As high-deductible plans require you to meet the deductible amount before the plan covers the benefits, the premiums will usually be lower than standard plans but lower to what extent depends on the providers.

When Is a High-Deductible Medicare Plan Worth Buying?

A high-deductible Medicare plan is worth your money if the deductible amount and premiums you pay are less than the premiums of a standard Medicare plan.

If you meet the deductible

If you meet the deductible by spending enough on coinsurance and co-payments, you can compare quotes to see which version of the Medicare plan is more effective.

For a high-deductible plan to benefit more than the standard plan, the lower premiums must outweigh the added cost of meeting the deductible.

A high-deductible plan will kick in after paying the deductible amount, $2490, which, if divided over 12 months, costs $207.5 per month. In this case, a high-deductible plan must have premiums at least $207.5 per month less than the standard plan to save on it.

If you don’t meet the deductible

If you spend less than the deductible, the plan won’t cover any services, so you will get nothing in return for your premiums.

If you are unsure whether you will meet the deductible

In this circumstance, you must consider your financial situation and how much you can afford to spend out of pocket for your medical expenses to determine whether a high-deductible Medicare plan works for you.

Besides receiving no benefits for the premiums paid, failing to meet the deductible may increase your risk of losing coverage available with the standard plan. So, buy the high-deductible plan only if you can meet the deductible.

Choose the Right Medicare Supplemental Plan

Consider these points to find the supplemental plan that perfectly addresses your needs:

  • Check whether your preferred plan is available.
  • Consider the premium and compare it with various providers.
  • Ensure whether your premium changes over time and what factors affect it.
  • Some providers may offer discounts and gym memberships as part of Medicare plan benefits. So, check with your provider whether they offer such perks.

Connect with Medicare Advisors to Learn More

Contact us today at Medicare Advisors to learn about Medicare supplemental insurance or if you have any questions concerning it.

Contact form

  • Looking for help on Medicare Plans? If you'll give me 20 minutes of your time, I can sit down with you and make all of this very simple.
  • By completing this form you agree that a licensed insurance agent may contact you by phone or email to answer any questions you have regarding your interests. This is a solicitation for insurance.
  • This field is for validation purposes and should be left unchanged.