How does HDG work?

[pogo]

I've been looking more at HDG because a T65 MA skeptic with no health issues is balking at the Plan G premium and I need to be clear on how HDG works.

Does the HDG deductible apply a) to the first $2490 of annual medical expenses like the Lasso MSA or b) to the first $2257 ($2490-Part B deductible) of expenses not covered by Original Medicare?

I originally thought it was a), but now think it is b). Looking at the ballpark math if b) is true:

• The full deductible will be met when the beneficiary has more than $11,000 in expenses,
• In my available Medigap plans, the premium difference between G and HDG is about $1000/year for T65. In order to have the deductible reach $1000, the beneficiary would have to have annual medical expenses of $5,000. The beneficiary will have less OOP (premium + deductible) whenever annual expenses are less than $5k.

 

[straightnochaser]

A - It's a Part B deductible so applies to Part B services.

 

[LostDollar]

Caveat, not an agent.

I do not have personal experience with a Medigap plan and Part A expenses so I can't talk about that. And the following discussion assumes there are no Part A expenses in the works.
It is exactly what I have been dealing with with my substantial amount of Part B claims this year.

To talk about HDG, you must get two deductibles clearly in your mind. The Part B deductible and the HDG deductible. (And I can never remember the precise HDG deductible, so I just call it $2,500 for my thought processes. You will have to do your own math with whatever the correct amount is.)

HDG is a Medicare Supplement plan, just like Plan G.

When original medicare (via the MAC for your area) approves a Part B treatment and an amount for the treatment, the Medicare Beneficiary is liable for 100% of the approved amount until they meet the Part B deductible of $233.

After the Medicare Beneficiary has paid $233 in their share of claims Plan G will kick in and pay their (beneficiary's) 20% share of the Part B approved amount. Except for Part B hospital claims, which are handled differently for some reason, Medicare (again I believe via the the MAC) will automatically submit the claim to the Medicare Beneficiary's Medigap plan of record. You can actually see a footnote to this effect on the MSN/MEOB. Processing for all those Part B claims except the hospital ones will be be automatic for Medicare and Medigap, based on the Part B provider's claim submission to Medicare.

For the next piece of the discussion, understand that payments towards the Part B deductible will apply to the Medigap High Deductible.

So when you have a High Deductible G plan, you are first liable for the Part B deductible Your Medicare MSN's will track this for you and you will get bills from your Part B providers for those amounts. But those Part B deductible payments will also apply to the HDG deductible of $2,500, leaving you a balance of $2,267 in payments due before your HDG plan will start paying anything. So, assuming no Part A expenses in the year, the HDG plan holder would pay his/her Part B providers the full Medicare approved amount up to $233 and then pay their Part B providers an up to an additional $2,267 for the HDG plan holder's 20% share of the Medicare approved claim amount. After that, the HDG plan will pay the HDG plan holder's 20% Part B claim liabilities.

Remember, unless a Medigap plan has optional un-required features, It will never pay anything not approved by Medicare.

 

[LostDollar]

Caveat, not an agent.

2-3 years ago, we had some theory discussion on this.

It is very remotely possible that the holder of an HDG plan could be liable for the the Part B deductible PLUS the Medigap High Deductible.

IF an HDG plan holder's first claims for a year were all Part A claims and the plan holder's liability for those claims reached, or exceeded, the high deductible medigap liability for that year, then the HDG plan holder would have to pay that deductible amount PLUS the Part B deductible when the beneficiary started having Part B claims.

The experienced agents commenting said they thought it highly uncommon that someone would start out the year that way, so the more expected norm for most people would be that their Part B deductible payments would also count toward their Medigap High Deductible liability.

 

[somarco]

I've been looking more at HDG because a T65 MA skeptic with no health issues is balking at the Plan G premium and I need to be clear on how HDG works.

Does the HDG deductible apply a) to the first $2490 of annual medical expenses like the Lasso MSA or b) to the first $2257 ($2490-Part B deductible) of expenses not covered by Original Medicare?

I originally thought it was a), but now think it is b). Looking at the ballpark math if b) is true:

• The full deductible will be met when the beneficiary has more than $11,000 in expenses,
• In my available Medigap plans, the premium difference between G and HDG is about $1000/year for T65. In order to have the deductible reach $1000, the beneficiary would have to have annual medical expenses of $5,000. The beneficiary will have less OOP (premium + deductible) whenever annual expenses are less than $5k.

Expenses not covered by Medicare do not accrue towards the deductible with ANY plan.

How did you come up with this $11,000 figure? Is that gross claims or net after repricing?

You can get in a lot of trouble "doing the math" for a prospect/client. Your $5k in medical expenses = $1000 towards the deductible would only apply if talking about Part B expenses above the deductible.

Show your prospect an outline of coverage . . . either a carrier brochure or a summary like CSG offers. The more time you spend "explaining" how it works the more confused both of you will be.

My client explanation . . . When you have around $2600 in out of pocket covered expenses the plan coverage will kick in. That figure changes every year, but here is the outline so you can see your exposure for this year.

Give them the outline/brochure and let them ask questions. KISS.

BTW, if you focus on making HDG sales because you think they are "easy" you will go broke.

If they can't afford a G plan how will they come up with $2600 to pay their OOP until the plan kicks in?

Too many folks have the wrong impression of how insurance works. Often they will reject the HD plan once they realize THEY are paying all the claim costs and the carrier pays nothing. Folks have the feeling they should "get something" in return for their premium.

It is a dumb idea, but fairly common none the less.

 

[Fisher]

It's late and I have oatmeal-brain afer another fun-filled day of Rx challenges but I've always understood HDG to work this way--

• I am on the hook for the Part B deductible of $233 this year.
• After the deductible is satisfied, then I am on the hook for 20% of all Part B charges until I am $2490 out-of-pocket. (Approximately $12,450 in Medicare-approved Part B billing of which Medicare pays 80%.)
• Then I have a regular ol' Plan G for the remainder of the year.

Am I wrong?

 

[LostDollar]

It's late and I have oatmeal-brain afer another fun-filled day of Rx challenges but I've always understood HDG to work this way--

• I am on the hook for the Part B deductible of $233 this year.
• After the deductible is satisfied, then I am on the hook for 20% of all Part B charges until I am $2490 out-of-pocket. (Approximately $12,450 in Medicare-approved Part B billing of which Medicare pays 80%.)
• Then I have a regular ol' Plan G for the remainder of the year.

Am I wrong?

Caveat, not an agent.

Am I wrong?

Remember that the Part B Deductible applies to the Medigap High Deductible. So most likely a Medicare Beneficiary holding an HDG will not pay a Part B Deductible plus a Medigap High Deductible. They are most likely to pay the Part B Deductible within the Medigap High Deductible, which gives the practical effect of an HDG working like my HDF.

 

[LostDollar]

[EXTERNAL LINK] - How to compare Medigap policies | Medicare

* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of$2,490 in 2022 before your policy pays anything. (Plans C and F aren't available to people who were newly eligible for Medicare on or after January 1, 2020.)

Edit:
It helps me here to expand my deductible modifiers to say:
Medicare Part A Deductible
Medicare Part B Deductible
Medigap High Deductible.

Then I can say the Medicare Part A Deductible and the Medicare Part B Deductible can both be part of the Medigap High Deductible.

I was reading Medicare MSN/MEOB 's and Medigap EOB's earlier this year for my claims and getting totally confused about what was going on. When I used the vocabulary I mentioned above, I could work through the claims and approved amounts and follow what was happening.
End Edit.

 

[LostDollar]

Too many folks have the wrong impression of how insurance works. Often they will reject the HD plan once they realize THEY are paying all the claim costs and the carrier pays nothing. Folks have the feeling they should "get something" in return for their premium.

I get something for my HDF premium. I get Medigap claims administration and a catastrophic cap on my Medicare Beneficary's share of my Medicare Approved Expenses.

My Medicare catastrophic cap starts after a much lower deductible than my wife's ACA catastrophic cap did.

(And this year, after 6 years, I may actually see my Medigap High Deductible Plan make payments on a claim or two.)