Medigap economic value by plan type?

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spammagnet
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Medigap economic value by plan type?

Post by spammagnet »

There are many sources of information that show which Medigap plan pays for what, since they're standardized by law. Is there a succinct summary somewhere that tells you what type of user benefits from each type of plan? E.g., if I'm a regular user of hospital outpatient services like physical therapy and radiology, but not hospitalization, would I be better off financially paying a higher premium for Plan G vs having a lower premium for Plan K but having to pay something out of pocket?

Also, Plan G is the only one available to me that pays Part B excess charges. How often does that actually matter, and what is my liability? Unlimited?

Thanks for your wisdom.

Edit: what is the benefit of a high-deductible Plan G? The OOP exceeds the savings in lower premiums, for policies available to me. Is that an anomaly? Are there other financial benefits I don't know about? Is it for subscribers who have no expectation of actually reaching the max OOP?
tj
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Re: Medigap economic value by plan type?

Post by tj »

i don't understand why one would even consider Plan K.


Plan G High Deductible or Plan G seem like the obvious choices, to me.

The benefit to the High Deductible is if you are health you spend less. As you age, the difference in premium becomes more than the deductible.
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spammagnet
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Re: Medigap economic value by plan type?

Post by spammagnet »

tj wrote: Sun Apr 18, 2021 6:51 pmi don't understand why one would even consider Plan K.
I'm not, particularly. It was an example. But the plans are defined in law so I'm thinking there may be a rationale for the differences, for different types of participants?
… As you age, the difference in premium becomes more than the deductible.
As in the accumulated savings in lower premium over time?
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FIREchief
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Re: Medigap economic value by plan type?

Post by FIREchief »

spammagnet wrote: Sun Apr 18, 2021 6:39 pm Edit: what is the benefit of a high-deductible Plan G? The OOP exceeds the savings in lower premiums, for policies available to me. Is that an anomaly? Are there other financial benefits I don't know about? Is it for subscribers who have no expectation of actually reaching the max OOP?
How often would you expect to hit the OOP maximum? Every year? Once in three years? etc. That's how you need to approach this trade off. I'm leaning towards Plan G HD not because I don't expect health issues, but because I don't expect significant health issues every year of my life from 65 until death.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
tj
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Re: Medigap economic value by plan type?

Post by tj »

spammagnet wrote: Sun Apr 18, 2021 7:19 pm
tj wrote: Sun Apr 18, 2021 6:51 pmi don't understand why one would even consider Plan K.
I'm not, particularly. It was an example. But the plans are defined in law so I'm thinking there may be a rationale for the differences, for different types of participants?
… As you age, the difference in premium becomes more than the deductible.
As in the accumulated savings in lower premium over time?
No. I meant if you get old enough, the difference in the annual premium of G and the annual premium of HD G is greater than the HD G Deductible. In California at least.
Last edited by tj on Sun Apr 18, 2021 8:51 pm, edited 1 time in total.
diy60
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Re: Medigap economic value by plan type?

Post by diy60 »

spammagnet wrote: Sun Apr 18, 2021 6:39 pmAlso, Plan G is the only one available to me that pays Part B excess charges. How often does that actually matter, and what is my liability? Unlimited?
If you live in 1 of the 8 states that prohibit Medicare excess charges, then its definitely not a concern. However, somewhere I came across articles that indicated excess charges only account for something like 3% of all Medicare billing nationally. Sorry, I don't have a link, but in my research of which Medigap plan might be best for me I quickly dismissed any concern over excess billing. Good luck.
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Re: Medigap economic value by plan type?

Post by ModifiedDuration »

diy60 wrote: Sun Apr 18, 2021 7:57 pm
spammagnet wrote: Sun Apr 18, 2021 6:39 pmAlso, Plan G is the only one available to me that pays Part B excess charges. How often does that actually matter, and what is my liability? Unlimited?
If you live in 1 of the 8 states that prohibit Medicare excess charges, that it definitely is not a concern. However, somewhere I came across articles that indicated excess charges only account for something like 3% of all Medicare billing nationally. Sorry, I don't have a link, but in my research of which Medigap plan might be best for me I quickly dismissed any concern over excess billing. Good luck.
I’ve seen similar percentages on Excess Charges.

In this article, Aetna says that less than 1% of the claims they processed had Excess Charges and, of the ones that did have Excess Charges, the average charge was less than $20:

https://expertmedicare.com/medicare-excess-charges/

Another article that I have seen recently stated that less than 5% of bills have Excess Charges.

So, yes, Excess Charges appear to not be a significant issue.
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Re: Medigap economic value by plan type?

Post by spammagnet »

I was under the impression Medicare excess charges were potentially unlimited but just learned they cannot be greater than 15% over Medicare. That significantly reduces the financial risk, especially considering that most providers accept Medicare. I was concerned with surprise charges from a non-network provider such as anesthesia, but that seems unlikely or at least limited.
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Re: Medigap economic value by plan type?

Post by diy60 »

spammagnet wrote: Sun Apr 18, 2021 8:36 pm I was under the impression Medicare excess charges were potentially unlimited but just learned they cannot be greater than 15% over Medicare.
Also minor detail, but the number works out to less than 15% because by law non participating providers cannot charge the full Medicare approved rate.
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Re: Medigap economic value by plan type?

Post by spammagnet »

FIREchief wrote: Sun Apr 18, 2021 7:23 pmHow often would you expect to hit the OOP maximum? Every year? Once in three years? etc. That's how you need to approach this trade off. I'm leaning towards Plan G HD not because I don't expect health issues, but because I don't expect significant health issues every year of my life from 65 until death.
That's a logical approach but my breakeven interval will be shorter. I expect to switch to Medicare Advantage in later life when I'm no longer traveling as much. Right now, I want the portability of a Medigap plan. Also, I'm already kind of a high utilizer of services, so I'd probably approach the high deductible even in the earlier years.
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Re: Medigap economic value by plan type?

Post by ModifiedDuration »

spammagnet wrote: Sun Apr 18, 2021 8:44 pm
FIREchief wrote: Sun Apr 18, 2021 7:23 pmHow often would you expect to hit the OOP maximum? Every year? Once in three years? etc. That's how you need to approach this trade off. I'm leaning towards Plan G HD not because I don't expect health issues, but because I don't expect significant health issues every year of my life from 65 until death.
That's a logical approach but my breakeven interval will be shorter. I expect to switch to Medicare Advantage in later life when I'm no longer traveling as much. Right now, I want the portability of a Medigap plan. Also, I'm already kind of a high utilizer of services, so I'd probably approach the high deductible even in the earlier years.
If you are a high utilizer of medical services, you might want to consider just going with the most comprehensive Medigap plan available to you, Plan G, and staying with it.

Otherwise, with a Medicare Advantage Plan you could be hitting the annual out-of-picket maximum on multiple, if not all, years.

With Plan G, your maximin out-of-pocket would be the $203 Part B deductible each year- no networks, no insurance company involvement. If it is a Medicare-approved expense, then the Medigap Plan will cover it.

If you went with Plan G, you would also probably want a Part D prescription plan.
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Re: Medigap economic value by plan type?

Post by GerryL »

Edit: what is the benefit of a high-deductible Plan G? The OOP exceeds the savings in lower premiums, for policies available to me. Is that an anomaly? Are there other financial benefits I don't know about? Is it for subscribers who have no expectation of actually reaching the max OOP?
The HD plans are appropriate for people who are not normally heavy users of healthcare. I am one of those people, so I opted for HD when I started on Medicare >6 years ago. I have yet to come anywhere near the deductible in any year. I understand that there may come a time when medical bills will take me well into the deductible zone or beyond, but I know I can afford to pay that out of pocket -- and I've already saved 4-5 years of the Medigap deductible thanks to the difference in premiums.

To decide whether you are a candidate for an HD plan, look back over several years of healthcare usage. If most of your doctor/clinic visits are for preventive care covered at no cost by Medicare, you may be well served by an HD plan.
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Re: Medigap economic value by plan type?

Post by spammagnet »

ModifiedDuration wrote: Sun Apr 18, 2021 9:06 pm
spammagnet wrote: Sun Apr 18, 2021 8:44 pm
FIREchief wrote: Sun Apr 18, 2021 7:23 pmHow often would you expect to hit the OOP maximum? Every year? Once in three years? etc. That's how you need to approach this trade off. I'm leaning towards Plan G HD not because I don't expect health issues, but because I don't expect significant health issues every year of my life from 65 until death.
That's a logical approach but my breakeven interval will be shorter. I expect to switch to Medicare Advantage in later life when I'm no longer traveling as much. Right now, I want the portability of a Medigap plan. Also, I'm already kind of a high utilizer of services, so I'd probably approach the high deductible even in the earlier years.
If you are a high utilizer of medical services, you might want to consider just going with the most comprehensive Medigap plan available to you, Plan G, and staying with it.

Otherwise, with a Medicare Advantage Plan you could be hitting the annual out-of-picket maximum on multiple, if not all, years.

With Plan G, your maximin out-of-pocket would be the $203 Part B deductible each year- no networks, no insurance company involvement. If it is a Medicare-approved expense, then the Medigap Plan will cover it.

If you went with Plan G, you would also probably want a Part D prescription plan.
I am not considering Medicare Advantage at this time. Comparing G to N for one provider, the annual premium difference is $379. Excess Medicare charges notwithstanding, am I missing something?
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Re: Medigap economic value by plan type?

Post by spammagnet »

GerryL wrote: Sun Apr 18, 2021 9:21 pmTo decide whether you are a candidate for an HD plan, look back over several years of healthcare usage. If most of your doctor/clinic visits are for preventive care covered at no cost by Medicare, you may be well served by an HD plan.
Unfortunately, that does not describe me. I'm not debilitated but do end up using various services.
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Re: Medigap economic value by plan type?

Post by nisiprius »

Not sure if it's true in all states, but in mine Medigap insurers are required to disclose their "medical loss ratio," the percentage of premiums paid out in claims. So find that number, multiply the premium by the medical loss ratio, and that's the mathematical expectation of the dollar value for the plan.

I think it's a bad mistake to suppose that you know whether you are going to be a "high utilizer of medical services." You can eat right, keep fit, and still end up with snakebite and a $50,000 bill for antivenin. You buy insurance to protect against the unlikely, not the predictable.
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Re: Medigap economic value by plan type?

Post by tj »

spammagnet wrote: Sun Apr 18, 2021 9:34 pm
ModifiedDuration wrote: Sun Apr 18, 2021 9:06 pm
spammagnet wrote: Sun Apr 18, 2021 8:44 pm
FIREchief wrote: Sun Apr 18, 2021 7:23 pmHow often would you expect to hit the OOP maximum? Every year? Once in three years? etc. That's how you need to approach this trade off. I'm leaning towards Plan G HD not because I don't expect health issues, but because I don't expect significant health issues every year of my life from 65 until death.
That's a logical approach but my breakeven interval will be shorter. I expect to switch to Medicare Advantage in later life when I'm no longer traveling as much. Right now, I want the portability of a Medigap plan. Also, I'm already kind of a high utilizer of services, so I'd probably approach the high deductible even in the earlier years.
If you are a high utilizer of medical services, you might want to consider just going with the most comprehensive Medigap plan available to you, Plan G, and staying with it.

Otherwise, with a Medicare Advantage Plan you could be hitting the annual out-of-picket maximum on multiple, if not all, years.

With Plan G, your maximin out-of-pocket would be the $203 Part B deductible each year- no networks, no insurance company involvement. If it is a Medicare-approved expense, then the Medigap Plan will cover it.

If you went with Plan G, you would also probably want a Part D prescription plan.
I am not considering Medicare Advantage at this time. Comparing G to N for one provider, the annual premium difference is $379. Excess Medicare charges notwithstanding, am I missing something?
I believe N has co-pays. (Do those not count against the deductible?) It's not just the lack of covering excess charges.
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Re: Medigap economic value by plan type?

Post by ModifiedDuration »

spammagnet wrote: Sun Apr 18, 2021 9:34 pm I am not considering Medicare Advantage at this time. Comparing G to N for one provider, the annual premium difference is $379. Excess Medicare charges notwithstanding, am I missing something?
Well, if you are a heavy user of medical services, the up to $20 copay when visiting a doctor’s office with Plan N could add up over the year (as well as the up to $50 charge fur an ER visit that does not result in a hospital admission),

Plus, you do have the possibility of Excess Charges with Pkan N.

Your call, but Plan N does look attractive. Either one would work, really.

I don’t know if these are attained-age rates, however, another factor you might want to look at and consider is the difference in cost between the two Medigap plans at other ages, maybe at age 75.
Last edited by ModifiedDuration on Sun Apr 18, 2021 9:54 pm, edited 2 times in total.
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Re: Medigap economic value by plan type?

Post by spammagnet »

nisiprius wrote: Sun Apr 18, 2021 9:43 pmNot sure if it's true in all states, but in mine Medigap insurers are required to disclose their "medical loss ratio," the percentage of premiums paid out in claims. So find that number, multiply the premium by the medical loss ratio, and that's the mathematical expectation of the dollar value for the plan.

I think it's a bad mistake to suppose that you know whether you are going to be a "high utilizer of medical services." You can eat right, keep fit, and still end up with snakebite and a $50,000 bill for antivenin. You buy insurance to protect against the unlikely, not the predictable.
Thanks. I'll look for the loss ratio, if available.

With respect to being a high utilizer, I agree that it's risky to presume you will not be a high utilizer of medical services. However, one's medical history may reveal that you already are.

For those willing to accept the risk of assuming they're not, they may have a bad year but not have high expenses in most other years and still come out ahead. It's a risk decision, which is always a guess. An informed guess, perhaps, but still a guess.
Last edited by spammagnet on Sun Apr 18, 2021 9:56 pm, edited 1 time in total.
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Re: Medigap economic value by plan type?

Post by spammagnet »

tj wrote: Sun Apr 18, 2021 9:46 pmI believe N has co-pays. (Do those not count against the deductible?) It's not just the lack of covering excess charges.
I just read some policy details that mentioned "some" co-pays as a asterisk footnote. That would reduce the premium advantages of N, for sure. The effort to find out exactly which visits did have co-pays would probably be large and, most likely, the results would be incomplete.

It sounds like G wins for me.
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Re: Medigap economic value by plan type?

Post by GerryL »

spammagnet wrote: Sun Apr 18, 2021 9:51 pm
nisiprius wrote: Sun Apr 18, 2021 9:43 pm ...
I think it's a bad mistake to suppose that you know whether you are going to be a "high utilizer of medical services." You can eat right, keep fit, and still end up with snakebite and a $50,000 bill for antivenin. You buy insurance to protect against the unlikely, not the predictable.
Thanks. I'll look for the loss ratio, if available.

With respect to being a high utilizer, I agree that it's risky to presume you will not be a high utilizer of medical services. However, one's medical history may reveal that you already are.

For those willing to accept the risk of assuming they're not, they may have a bad year but not have high expenses in most other years and still come out ahead. It's a risk decision, which is always a guess. An informed guess, perhaps, but still a guess.

High healthcare utilization can happen to anyone in a given year even if they are in good health. Or someone may develop a condition that will require ongoing care in the future. Can't predict that. What you can control is how likely you are to go to a clinic or consult a doctor for common situations, like a minor cut, a queasy stomach, a sore ankle or a common cold. Some people treat the symptoms and see if it clears up in a few days. Others go straight to the doctor. An HD plan is probably not a good choice for the latter type of person.
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