Presented by Tim Dreher
Do your healthy senior clients ever express to you their frustration about paying high monthly premiums for their Medicare Supplement policies and then rarely using them? Are they tired of getting “the letter” every year from their insurance company announcing yet another round of rate increases?
If your clients are willing to pay out of pocket for certain health care costs then maybe a high-deductible plan is the answer for them. A high-deductible Medigap plan can help your clients save on premium costs while still getting dependable coverage for their healthcare needs. Premiums for a high-deductible Medicare Supplement Plan F typically run about one third to one fourth of what you would normally pay for a regular Medicare Supplement Plan F. Like any other Medicare Supplement policy, high-deductible plans still have the largest nationwide network of doctors and hospitals because they have the same network as original Medicare.
Let’s take a look at how these plans work. A high-deductible Medicare Supplement Plan F pays the same benefits as a regular Medicare Supplement Plan F but only after the policyholder has satisfied a calendar year deductible. For 2016 that deductible amount is $2,180. In other words, the deductible amount represents the annual out-of-pocket expenses that the policyholder must pay before the plan starts paying benefits.
Out-of-pocket expenses attributed to this deductible are those Medicare approved expenses that would ordinarily be paid by the policy. It is important to remember that the deductible is only applied to the Medicare Supplement portion. Medicare will still pay approximately 80% of any approved service and the Medicare beneficiary is responsible for the remaining 20%, which is then picked up by the Medicare Supplement policy.
For example, one of your Medicare eligible clients has a medical procedure that costs $5,000. Typically, Medicare would cover $4,000 of the bill and the individual’s Medicare Supplement policy would pick up the remaining $1,000. If your client owned a high-deductible plan then he or she would pay the $1,000 out of pocket that would be applied toward the deductible. Once the deductible is met the Plan would pay the same as a regular Plan F.
I would imagine that many of your senior clients would be open to the ideas of a high-deductible plan since most are used to paying higher deductibles with their pre-age 65 health plans.
A high-deductible Plan F is certainly not for everyone. But for those healthy clients of yours that like the idea of paying a much lower premium and are comfortable knowing that the trade-off would be paying some expenses out-of pocket before the plan begins paying, the High-Deductible Medicare Supplement Plan F might be a great fit.