What Is a High Deductible Medicare Supplement?

There are many different Medicare Supplement plans on the market, including a couple of high-deductible options. We don’t recommend these, but it’s always a good idea to understand all of your options.

Read on to learn more about what a high-deductible Medicare Supplement is and why it’s not exactly our favorite plan choice.

What Does High Deductible Mean?

A high deductible plan is a plan that requires you to pay a higher deductible than a traditional insurance plan. Once you reach that deductible, the plan starts to pay for covered services.  

The nice part about these plans is you usually pay a much lower monthly premium compared to plans with lower deductibles.

In sum:

• Higher deductible? Lower premium.
• Lower deductible? Higher premium.

High Deductible Medicare Supplement Plans

There are two high-deductible Medicare Supplement plan options:

• High-deductible Plan F
• High-deductible Plan G

Both of these plan options are available in the state of Illinois, but not every Medicare Supplement carrier offers them.

Note: These high-deductible Medicare Supplement plans may not be available in Massachusetts, Minnesota, or Wisconsin.

High-Deductible Plan F

You can only purchase a high-deductible Plan F if you were eligible for Medicare prior to January 1, 2020. So, if you’re new to Medicare, skip this section!

High-deductible Plan F covers everything that regular Plan F covers, except it comes with a $2,700 deductible, as of 2023. You must pay this amount in full before your policy pays anything.

A regular Plan F has first-dollar coverage, meaning you are not required to pay any out-of-pocket costs before the plans starts paying. You only need to pay your monthly premium to keep the policy active.

High-Deductible Plan G

High-deductible Plan G covers everything that regular Plan G covers, but it has a deductible amount of $2,700 as of 2023. You must pay for all coinsurance and copays up to this deductible before the plans pays anything.

In addition to the $2,700 high deductible, you also must pay the Medicare Part B deductible, which is $226 in 2023. Essentially, you have two deductibles to reach with this plan.

High-Deductible Plan F vs High-Deductible Plan G

There are two differences between high-deductible Plan F and high-deductible Plan G:

1. Deductible: high-deductible Plan F covers the Medicare Part B deductible whereas high-deductible Plan G does not. Otherwise, these plans have the same benefits.
2. Premium: high-deductible Plan F has a slightly higher premium, in general, than a high-deductible Plan G. However, at the time of writing this article, the premiums are nearly identical (only a few cents difference).

Keep in mind you cannot purchase high-deductible Plan F if you’re new to Medicare. You can only access it if you were eligible for Medicare prior to January 1, 2020.

Is a High-Deductible Medicare Supplement Worth It?

We have never recommended a high-deductible Medicare Supplement plan due to the high out-of-pocket cost you’re exposed to before the plan starts paying. Here's a more detailed look at how these plans stack up.

Financial Burden

With a high-deductible Plan G, you would have to pay a total of $2,926 (in 2023) before the plan pays for anything.  

That’s a large financial burden, and that total doesn’t even include the monthly premium (though it is lower than traditional Medicare Supplement plans).

Annual Cost of High-Deductible Plan G vs. Regular Plan F

To provide a premium comparison, the same company might offer a high-deductible Plan G for $39 per month* while the regular Plan G might be $97 per month.*

If you look at your total out-of-pocket costs for a whole year (as of 2023), here’s how these two plans would compare if you maxed them out:

• Plan G: $1,390 in total out-of-pocket costs (the monthly premium + the Part B deductible)
• High-Deductible Plan G: $3,394 in total out-of-pocket costs (the monthly premium + the high deductible + the Part B deductible)

The high-deductible Plan G has a much higher out-of-pocket cost risk.  

We always want to plan for the worst-case scenario, and for this reason, we do not recommend a high-deductible Medicare Supplement plan to our clients.

Conclusion

In sum, we do not believe a high-deductible Medicare Supplement is worth it.  

We do, however, recommend and advocate for a regular Medicare Supplement, which offers robust coverage with minimal out-of-pocket exposure.

For a no-obligation quote, please schedule an appointment by calling our office at 217-423-8000 or by using our online scheduling system.

*Disclaimer: the premium amounts mentioned in this article are not guaranteed and are subject to change. Premium amounts vary based on age, gender, tobacco status, zip code, and carrier. Rates may also be subject to rate increases throughout the year or on an annual basis. For an accurate quote, please contact our office to reach a licensed sales agent. The premium examples given in this article are for general reference only.