Bulletin
Investor Alert

NerdWallet

May 16, 2022, 7:01 p.m. EDT

What is a high-deductible Medigap plan, and is it worth the cost?

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

By Alex Rosenberg

Continued from page 1
Page 1 Page 2

If you’ll meet the deductible

If you’ll spend enough on coinsurance, copayments and deductibles to meet the Medigap deductible for a high-deductible Medigap plan, it’s worth comparing quotes to see which version is most cost-effective.

For the high-deductible version to cost less than the standard option, the lower premiums have to outweigh the added cost of meeting the deductible.

Benefits for high-deductible Medigap plans kick in after a deductible of $2,490 in 2022. Divided over 12 months, that’s $207.50 per month. A high-deductible plan would need to have premiums at least $207.50 per month less than the standard version for you to spend less on it overall.

If you won’t meet the deductible

A high-deductible Medigap plan isn’t a good choice if you’re fairly certain that you won’t meet the deductible.

If you spend less than the deductible, the plan doesn’t pay for any services. Effectively, you get nothing in return for your premium payments.

If you’re not sure whether you’ll meet the deductible

In this case, you might want to consider your financial situation and how much you can afford to spend on out-of-pocket medical costs to determine if a high-deductible Medigap plan is right for you:

  • If you don’t end up meeting the deductible, then you’re out the cost of the premiums — which are generally pretty low — and also risk losing coverage that’s available with a standard Medigap plan.

  • If you do meet the deductible, you’re covered after that point, so you limit your potential out-of-pocket spending in case of unexpectedly high medical costs.

Read : The twists, turns and myths of applying for Medicare: How we navigated the enrollment road

Find the right Medicare Supplement Insurance plan

Because Medigap plans are standardized, you can get precisely the same Medicare benefits from any company offering the plan. So when you shop, keep these considerations in mind to find the best policy to fit your needs:

  • Is your preferred plan available?  Health insurance companies don’t always sell every plan, so check who sells the plan you want to buy in your area.

  • What are the premiums?  Prices for the same plan can vary between companies, so check to find the most competitive rates.

  • Will your premiums change over time?  Most policies cost more as you age, but some companies offer policies that let you lock in a price when you sign up.

  • Are there extras?  Medigap plans’ core benefits are standardized, but in certain cases, some companies include such perks as discount programs or gym memberships.

If you have additional questions about Medicare, visit Medicare.gov or call 800-MEDICARE (800-633-4227, TTY 877-486-2048).

More From NerdWallet

Alex Rosenberg writes for NerdWallet. Email: arosenberg@nerdwallet.com. Twitter: @AlexPRosenberg.

Page 1 Page 2
This Story has 0 Comments
Be the first to comment
More News In
Retirement

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.