Final approach to Medicare – age 64

[FreddieFIRE]

I’m currently age 64 and making final plans for Medicare. At this point I am 100% certain that I will enroll in traditional Medicare (vs. Medicare Advantage) and a Medigap supplement. This decision is driven by a desire not to have to deal with in-network provider issues and the challenges that those can present. I am 95% certain that I will select a Medigap G-HD supplement.

Given the above, I am at the point of selecting a specific Medigap provider and policy. I have read various threads here on the forum about “dead pools” with Medigap providers. Thank you to those who contributed. It appears that there is no way to insulate myself from eventually being trapped in a dead pool and facing meaningful/significant premium increases in the future. Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool? My hope is that this would tend to mitigate the risks of dead pool premium increases.

I believe that once I finalize my thoughts on G vs. G-HD I will need to decide on a specific company that will provide these policies in my state, using criteria such as historical rate increases, reported patterns of dead-pooling, etc. Is there anything else I need to be thinking about at this time? Thanks.

[Marq1]

I just got my notice for Medicare part B and also have no plans to switch to Advantage. My reasons are slightly different in that I have never, ever had any need for medical treatment or prescriptions for my entire 67 years. Yea I know, the past doesn't foretell the future but I figure for the next 5 years the minimal outlay for a couple cleanings per year is the only negative aspect and I get to avoid the absolute confusion of trying to deal with Advantage claims!

[goodtogo]

Had the same concerns as you did. Decided to go the United Health AARP plan G. It seems this is the biggest, most stable one out there that does not have a closing the books issue. Used Boomer Benefits and they were great! I looked at N and the high deductible plans. Honestly I have had enough of record keeping, receipts and reconcilliation. With plan G you pay your annual deductible along with your monthly supplement premium and that is it. No copays, if Medicare covers it and the provider takes Medicare assignment you are good to go. It is wonderful and worth the little extra cost for the monthly premium! Life is short, the hassle factor for high deductible or copay plan N is just not worth it. Also if you are in a community rated state like we are, the monthly cost and future increases are really stable. It took 65 years to get here, no way I am skimping out now. I have family members that went the advantage route. Nothing but a big hassle, think preauthorizations, limited networks, large out of pockets etc. No thank you! Good luck in whatever you chose, sounds like you are on the right path to me!

[Artsdoctor]

Freddie: The first step is to understand exactly what your state allows. The rules are really all over the place when it comes to freely moving from one Medigap policy to the next throughout the year. Once you understand your state laws, you'll then be able to make an more informed decision. For example, if your state allows you to switch easily without any underwriting, it'll open up your decision-making considerably.

[FreddieFIRE]

Freddie: The first step is to understand exactly what your state allows. The rules are really all over the place when it comes to freely moving from one Medigap policy to the next throughout the year. Once you understand your state laws, you'll then be able to make an more informed decision. For example, if your state allows you to switch easily without any underwriting, it'll open up your decision-making considerably.

Thank you. I'm in a state that requires underwriting to switch Medigap plans, so I'll have to do my best to select a good provider on the front end. I've read here on the forum that Aetna, Cigna, and Mutual of Omaha have an undesirable pattern of creating dead pools, but I've also read that it is somewhat of a general risk across all providers. I have thought that maybe a mutual will be more stable due to them allegedly not being as profit driven. This may just be wishful thinking. I really don't know.

[GaryA505]

I’m currently age 64 and making final plans for Medicare. At this point I am 100% certain that I will enroll in traditional Medicare (vs. Medicare Advantage) and a Medigap supplement. This decision is driven by a desire not to have to deal with in-network provider issues and the challenges that those can present. I am 95% certain that I will select a Medigap G-HD supplement.

Given the above, I am at the point of selecting a specific Medigap provider and policy. I have read various threads here on the forum about “dead pools” with Medigap providers. Thank you to those who contributed. It appears that there is no way to insulate myself from eventually being trapped in a dead pool and facing meaningful/significant premium increases in the future. Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool? My hope is that this would tend to mitigate the risks of dead pool premium increases.

I believe that once I finalize my thoughts on G vs. G-HD I will need to decide on a specific company that will provide these policies in my state, using criteria such as historical rate increases, reported patterns of dead-pooling, etc. Is there anything else I need to be thinking about at this time? Thanks.

There is no way to know in advance which company is more likely to produce "dead pools" (or "sick duck pools"), but there is some history on this. Unfortunately the companies that have historically not produced dead pools or (sick duck pools) charge more, in some states at least.

I currently have Aetna G-HD ($42/mo) but may switch to United American G-HD ($49/mo) within my 30-day free look period. Even though in my case the UA plan is a few dollars more, unlike Aetna, UA has a reputation for not creating dead pools. As you know, dead pools can often produce higher rate increases. I'd rather not have to deal with this in the future, and I'm thinking a set-it-and-forget-it approach is worth a few bucks a month to me.

You are likely to get a lot of opinions on this. Some of these opinions will be useless since they are just coming from people trying to justify/promote their own decision.

[GaryA505]

Freddie: The first step is to understand exactly what your state allows. The rules are really all over the place when it comes to freely moving from one Medigap policy to the next throughout the year. Once you understand your state laws, you'll then be able to make an more informed decision. For example, if your state allows you to switch easily without any underwriting, it'll open up your decision-making considerably.

Thank you. I'm in a state that requires underwriting to switch Medigap plans, so I'll have to do my best to select a good provider on the front end. I've read here on the forum that Aetna, Cigna, and Mutual of Omaha have an undesirable pattern of creating dead pools, but I've also read that it is somewhat of a general risk across all providers. I have thought that maybe a mutual will be more stable due to them allegedly not being as profit driven. This may just be wishful thinking. I really don't know.

I think you're on the right track.

People in the insurance biz call this the "Omaha shuffle".

[cashmoney]

I’m currently age 64 and making final plans for Medicare. At this point I am 100% certain that I will enroll in traditional Medicare (vs. Medicare Advantage) and a Medigap supplement. This decision is driven by a desire not to have to deal with in-network provider issues and the challenges that those can present. I am 95% certain that I will select a Medigap G-HD supplement.

Given the above, I am at the point of selecting a specific Medigap provider and policy. I have read various threads here on the forum about “dead pools” with Medigap providers. Thank you to those who contributed. It appears that there is no way to insulate myself from eventually being trapped in a dead pool and facing meaningful/significant premium increases in the future. Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool? My hope is that this would tend to mitigate the risks of dead pool premium increases.

I believe that once I finalize my thoughts on G vs. G-HD I will need to decide on a specific company that will provide these policies in my state, using criteria such as historical rate increases, reported patterns of dead-pooling, etc. Is there anything else I need to be thinking about at this time? Thanks.

On way to avoid to mostly avoid this is by sticking with a big national carrier such as UHC ,UA,Bankers life/Conseco or even the BCBS plan but even some big name national companies especially MOO are notorious for continually opening new books of business.For the first time ever UHC has even opened up a new book under the UHICA name in some states.One indicator that you may be getting a plan that is likely to spin off is if the customer service his handled by a third party admin instead of internal customer service.

[FreddieFIRE]

On way to avoid to mostly avoid this is by sticking with a big national carrier such as UHC ,UA,Bankers life/Conseco or even the BCBS plan but even some big name national companies especially MOO are notorious for continually opening new books of business.

Thank you. These are the companies that issue G-HD policies in my state:

Ace Property and Casualty Insurance Company
Aetna Health and Life Insurance Company
Cigna National Health Insurance Company
Cigna National Health Insurance Company (Standard II)
Federal Life Insurance Company
Globe Life and Accident Insurance Company (Direct to Consumer)
Humana (Humana Insurance Company)
Humana Achieve (CompBenefits Insurance Company)
Medico Insurance Company (Preferred)
Medico Insurance Company (Standard I)
Medico Insurance Company (Standard II)
MedMutual Protect
Mutual of Omaha (Mutual of Omaha Insurance Company)
New Era Life Insurance Company
Physicians Select Insurance Company
Physicians Select Insurance Company (With Preventive and Fitness Benefits)
United American Insurance Company
Washington National Insurance Company
Washington National Insurance Company (Substandard)
Woodmen Of The World Life Insurance Society

All are issue age pricing. The monthly premiums range from $44 to $78. I'm fine with any of those.

[GaryA505]

On way to avoid to mostly avoid this is by sticking with a big national carrier such as UHC ,UA,Bankers life/Conseco or even the BCBS plan but even some big name national companies especially MOO are notorious for continually opening new books of business.

Thank you. These are the companies that issue G-HD policies in my state:

Ace Property and Casualty Insurance Company
Aetna Health and Life Insurance Company
Cigna National Health Insurance Company
Cigna National Health Insurance Company (Standard II)
Federal Life Insurance Company
Globe Life and Accident Insurance Company (Direct to Consumer)
Humana (Humana Insurance Company)
Humana Achieve (CompBenefits Insurance Company)
Medico Insurance Company (Preferred)
Medico Insurance Company (Standard I)
Medico Insurance Company (Standard II)
MedMutual Protect
Mutual of Omaha (Mutual of Omaha Insurance Company)
New Era Life Insurance Company
Physicians Select Insurance Company
Physicians Select Insurance Company (With Preventive and Fitness Benefits)
United American Insurance Company
Washington National Insurance Company
Washington National Insurance Company (Substandard)
Woodmen Of The World Life Insurance Society

All are issue age pricing. The monthly premiums range from $44 to $78. I'm fine with any of those.

I've heard that MedMutual Protect includes Silver Sneakers but have not confirmed it.

United American and Globe are the same company.

If you go with UA you might want to call Tim Ahlbum.
(954) 970-4760
jahlbum@ahlbumgroup.com
https://ahlbumgroup.com

[FreddieFIRE]

I've heard that MedMutual Protect includes Silver Sneakers but have not confirmed it.

Thanks. I would never use Silver Sneakers, but some would. It's not that I don't exercise. It's just that I live in a community (apartment) with a nice exercise room that is so convenient that I have zero excuses to not use it at least three times a week (per Doctor's ORDERS).

[FreddieFIRE]

United American and Globe are the same company.

Thanks. I think I knew that. Is there anything different other than how you buy it? I see that the UA premiums are more. Is that just to cover broker commissions?

[cashmoney]

On way to avoid to mostly avoid this is by sticking with a big national carrier such as UHC ,UA,Bankers life/Conseco or even the BCBS plan but even some big name national companies especially MOO are notorious for continually opening new books of business.

Thank you. These are the companies that issue G-HD policies in my state:

Ace Property and Casualty Insurance Company
Aetna Health and Life Insurance Company
Cigna National Health Insurance Company
Cigna National Health Insurance Company (Standard II)
Federal Life Insurance Company
Globe Life and Accident Insurance Company (Direct to Consumer)
Humana (Humana Insurance Company)
Humana Achieve (CompBenefits Insurance Company)
Medico Insurance Company (Preferred)
Medico Insurance Company (Standard I)
Medico Insurance Company (Standard II)
MedMutual Protect
Mutual of Omaha (Mutual of Omaha Insurance Company)
New Era Life Insurance Company
Physicians Select Insurance Company
Physicians Select Insurance Company (With Preventive and Fitness Benefits)
United American Insurance Company
Washington National Insurance Company
Washington National Insurance Company (Substandard)
Woodmen Of The World Life Insurance Society

All are issue age pricing. The monthly premiums range from $44 to $78. I'm fine with any of those.

if you are married and your spouse will likely get same plan consider the plans with the biggest household discount down the road.I believe some only apply discount with applications at the same time but others will apply discount household discount when spouse is added.

[GaryA505]

United American and Globe are the same company.

Thanks. I think I knew that. Is there anything different other than how you buy it? I see that the UA premiums are more. Is that just to cover broker commissions?

My guess would that they are the same. In my state UA is $2 less than Globe. Go figure.

[Artsdoctor]

If you're in a state in which you have significant restrictions from moving from Medigap policy to Medigap policy, I'd personally consider going with "bigger is better" for some of the reasons stated above. The sheer quantity of participants would probably help you more than much smaller providers would.

One thing I'd caution about comparing prices, especially if your state has significant restrictions: Remember that what you see now may not resemble what you see in the future (near and far). Insurers will raise rates: it might be age-related, or it might be across the board for everyone--or it might be both. Likewise, if you look as discounted plans, such as AARP's UHC supplement with AARP membership, bear in mind that the discount fades over time.

[FreddieFIRE]

If you're in a state in which you have significant restrictions from moving from Medigap policy to Medigap policy, I'd personally consider going with "bigger is better" for some of the reasons stated above. The sheer quantity of participants would probably help you more than much smaller providers would.

While I might be tempted to agree, I find it interesting that some of the biggest, well-known insurers are often mentioned as the ones "abusing" dead pools (actually, if they aren't breaking any state rules, it's likely just good business).

One thing I'd caution about comparing prices, especially if your state has significant restrictions: Remember that what you see now may not resemble what you see in the future (near and far). Insurers will raise rates: it might be age-related, or it might be across the board for everyone--or it might be both. Likewise, if you look as discounted plans, such as AARP's UHC supplement with AARP membership, bear in mind that the discount fades over time.

Good advice. I may not have been clear, but I'm not using price comparisons as a meaningful input to my decisions. I'm really just looking at the company's reputation and historical behaviors. Granted, both can be hard to nail down with any accuracy.

[GaryA505]

If you're in a state in which you have significant restrictions from moving from Medigap policy to Medigap policy, I'd personally consider going with "bigger is better" for some of the reasons stated above. The sheer quantity of participants would probably help you more than much smaller providers would.

While I might be tempted to agree, I find it interesting that some of the biggest, well-known insurers are often mentioned as the ones "abusing" dead pools (actually, if they aren't breaking any state rules, it's likely just good business).

One thing I'd caution about comparing prices, especially if your state has significant restrictions: Remember that what you see now may not resemble what you see in the future (near and far). Insurers will raise rates: it might be age-related, or it might be across the board for everyone--or it might be both. Likewise, if you look as discounted plans, such as AARP's UHC supplement with AARP membership, bear in mind that the discount fades over time.

Good advice. I may not have been clear, but I'm not using price comparisons as a meaningful input to my decisions. I'm really just looking at the company's reputation and historical behaviors. Granted, both can be hard to nail down with any accuracy.

I'll be interested to hear what you decide, and why. I have until the end of January to decide if I want to switch to UA. I'm leaning that way now.

[Carl53]

I've heard that MedMutual Protect includes Silver Sneakers but have not confirmed it.

I don't know about MedMutual Protect, but MedMutual of Ohio G plan does include Silver Sneakers. Did not realize it until we inquired about membership at a local Y as well as a local Jewish Center. I found out I had coverage, but spouse on a Mutual of Omaha G plan did not despite them telling her that it provided local gym membership. She was able to switch to MMO and now goes to either of several facilities and I occasionally join her.

[billfromct]

You should contact your “State Health Insurance Assistance Program”; also known as SHIP. I guess they left out the “A” to make it easier to remember.

Each state has volunteers who are very knowledgeable about the Medicare providers & issues for their particular state.

Google “your state name SHIP” so you can call them to get specific state Medicare information.

bill

[FreddieFIRE]

She was able to switch to MMO and now goes to either of several facilities and I occasionally join her.

Did she switch Medigap plans just to get Silver Sneakers? Was underwriting required?

[FreddieFIRE]

You should contact your “State Health Insurance Assistance Program”; also known as SHIP. I guess they left out the “A” to make it easier to remember.

Each state has volunteers who are very knowledgeable about the Medicare providers & issues for their particular state.

Google “your state name SHIP” so you can call them to get specific state Medicare information.

bill

I'll reach out to them at some point. Do I need to have a list of questions prior?

[cks]

Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool?

Lower utilization is the goal of HD plans, but that doesn't mean that the pool is healthier- they are getting older after all and medical problems will appear/compound.

I suspect that they also attract a higher proportion of people whose finances are stressed. Wealthier people tend to be healthier.

I suspect that 5% of you is probably asking the question; is this really where you want to cut corners

Extra copay/deductible/co-insurance costs may discourage you from seeking/receiving care that may lead to earlier diagnosis of ailments.

[GaryA505]

Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool?

Lower utilization is the goal of HD plans, but that doesn't mean that the pool is healthier- they are getting older after all and medical problems will appear/compound.

I suspect that they also attract a higher proportion of people whose finances are stressed. Wealthier people tend to be healthier.

I suspect that 5% of you is probably asking the question; is this really where you want to cut corners

Extra copay/deductible/co-insurance costs may discourage you from seeking/receiving care that may lead to earlier diagnosis of ailments.

I wouldn't call it "cutting corners". It's a decision based on estimated probabilities, just like a lot of other types of insurance.

And one could argue that Plan G causes people to make a lot of unnecessary doctor visits. We've heard all the arguments for all the plans.

[FreddieFIRE]

Is it reasonable to conclude that a high deductible (e.g. G-HD) plan will attract those who utilize their insurance less, and thus result in a more desirable risk pool?

I suspect that 5% of you is probably asking the question; is this really where you want to cut corners

Extra copay/deductible/co-insurance costs may discourage you from seeking/receiving care that may lead to earlier diagnosis of ailments.

It has nothing to do with cutting corners. Just math. If I need to see the doctor, I will. Money is only part of this equation for me in that I don't want to do something dumb WRT exposure to long term hyper-inflated costs due to dead pooling. Even in that scenario, I would still just pay them.

It is questionable to compare HD Medigap plans with traditional HD health insurance, since Medicare Part B is still paying the first 80% (after Medicare deductible, which is a constant across all Medigap plans).

[FreddieFIRE]

Lower utilization is the goal of HD plans, but that doesn't mean that the pool is healthier- they are getting older after all and medical problems will appear/compound.

I suspect that they also attract a higher proportion of people whose finances are stressed. Wealthier people tend to be healthier.

I suspect that 5% of you is probably asking the question; is this really where you want to cut corners

Extra copay/deductible/co-insurance costs may discourage you from seeking/receiving care that may lead to earlier diagnosis of ailments.

I wouldn't call it "cutting corners". It's a decision based on estimated probabilities, just like a lot of other types of insurance.

And one could argue that Plan G causes people to make a lot of unnecessary doctor visits. We've heard all the arguments for all the plans.

Thank you. I agree 100%. I assume for planning purposes that I will hit the G-HD deductible during every bad year. I need to circle back on the numbers, but the last time I calculated I could have a "bad" year about every third year and come out ahead money wise with a G-HD vs. a G. I'll redo that soon and share the results.

[FreddieFIRE]

I’ve analyzed this a bit more. One of my candidate companies is Globe Life and Accident Insurance Company. For 2025, monthly/annual premiums are as follows:
Plan G-HD: $58/$696
Plan G: $248/$2976

Therefore, it will cost $2,280 more per year if I select a Plan G over a Plan G-HD. Medicare.gov indicates that the Part B deductible is $257 (which I will just assume I pay in all cases) and that for Plan G-HD I will be responsible for $2,875 plan deductible “After I pay:” the $257 Part B deductible. This is contrary to my previous understanding, but likely irrelevant. Simple scenarios:
A) Good year: I incur $1000 of medical expenses (e.g. three or four doctor appointments without imaging or extensive laboratory work). I will be responsible for the Medicare Part B deductible plus an additional 20% x $743 = $148
B) Challenging year: I incur $5000 of medical expenses (doctor visits, extensive imaging and lab work but no surgery). I will be responsible for the Medicare Part B deductible plus 20% x $4,743 = $948.60
C) Bad year: I incur $15,000 (or more) of medical expenses (doctor visits, imaging, lab work, surgery). I will be responsible for the Medicare Part B deductible plus 20% x $14,743 = $2,948.60 which will be capped at the $2,875 G-HD deductible.

Example 1: So, time to get out the crystal ball. Recent historical data suggests that out of ten years I would have 1 bad year, 1 challenging year and 8 good years. But, I’m getting older. Let’s assume for sake of analysis that going forward over the next ten years it will be 2 bad years, 2 challenging years and 6 good years. I think that is conservative, as my current health/family history would suggest less negative years. Running the numbers, my incremental costs incurred due to selection of Plan G-HD would be (2 x $2,875 + 2 x $948 + 6 x $148 =) $8,534. My premium savings would be ($2,976 - $696) x 10 = $22,800. Cost savings by choosing G-HD = $14,266. An easy choice for G-HD.

Example 2: Same inputs with 4 bad years, 3 challenging years and 3 good years. Incremental costs for G-HD would be (4 x $2,875 + 3 x $948 + 3 x $148 =) $14,788. Cost savings by choosing G-HD = $8,012. Still a strong argument for G-HD.

Example 3: Same inputs with 6 bad years, 4 challenging years and no good years. Incremental costs for G-HD would be (6 x $2,875 + 4 x $948 + 0 x $148 =) $21,042. Cost savings by choosing G-HD = $1,758. Still G-HD, but near breakeven.

Example 4: Same inputs with all bad years. 10 x $2,875 = $28,750. Excess cost for G-HD = $5,950. Finally, G comes out ahead, but at less than $600 per year.

This is a first cut at this analysis. Corrections/clarifications are welcomed. Thanks.

[kd2008]

I’ve analyzed this a bit more. One of my candidate companies is Globe Life and Accident Insurance Company. For 2025, monthly/annual premiums are as follows:
Plan G-HD: $58/$696
Plan G: $248/$2976

Therefore, it will cost $2,280 more per year if I select a Plan G over a Plan G-HD. Medicare.gov indicates that the Part B deductible is $257 (which I will just assume I pay in all cases) and that for Plan G-HD I will be responsible for $2,875 plan deductible “After I pay:” the $257 Part B deductible. This is contrary to my previous understanding, but likely irrelevant. Simple scenarios:
A) Good year: I incur $1000 of medical expenses (e.g. three or four doctor appointments without imaging or extensive laboratory work). I will be responsible for the Medicare Part B deductible plus an additional 20% x $743 = $148
B) Challenging year: I incur $5000 of medical expenses (doctor visits, extensive imaging and lab work but no surgery). I will be responsible for the Medicare Part B deductible plus 20% x $4,743 = $948.60
C) Bad year: I incur $15,000 (or more) of medical expenses (doctor visits, imaging, lab work, surgery). I will be responsible for the Medicare Part B deductible plus 20% x $14,743 = $2,948.60 which will be capped at the $2,875 G-HD deductible.

Example 1: So, time to get out the crystal ball. Recent historical data suggests that out of ten years I would have 1 bad year, 1 challenging year and 8 good years. But, I’m getting older. Let’s assume for sake of analysis that going forward over the next ten years it will be 2 bad years, 2 challenging years and 6 good years. I think that is conservative, as my current health/family history would suggest less negative years. Running the numbers, my costs incremental costs incurred due to selection of Plan G-HD would be (2 x $2,875 + 2 x $948 + 6 x $148 =) $8,534. My premium savings would be ($2,976 - $696) x 10 = $22,800. Cost savings by choosing G-HD = $14,266. An easy choice for G-HD.

Example 2: Same inputs with 4 bad years, 3 challenging years and 3 good years. Incremental costs for G-HD would be (4 x $2,875 + 3 x $948 + 3 x $148 =) $14,788. Cost savings by choosing G-HD = $8,012. Still a strong argument for G-HD.

Example 3: Same inputs with 6 bad years, 4 challenging years and no good years. Incremental costs for G-HD would be (6 x $2,875 + 4 x $948 + 0 x $148 =) $21,042. Cost savings by choosing G-HD = $1,758. Still G-HD, but near breakeven.

Example 4: Same inputs with all bad years. 10 x $2,875 = $28,750. Excess cost for G-HD = $5,950. Finally, G comes out ahead, but at less than $600 per year.

This is a first cut at this analysis. Corrections/clarifications are welcomed. Thanks.

Great analysis
Part B deductible is included in max plan G-HD "deductible" ... misworded by Medicare as it should be out of pocket max.

You can include "earnings" on money NOT spent...it makes plan G-HD even better.

Further, include additional tax savings and earnings by paying G-HD out of pocket costs through HSA. For plan G and plan G-HD the premiums cannot be paid through HSA.

This makes G-HD better in all scenarios you looked at.

[Softballer]

I will also be signing up this year but not until summer. Is it wise to start looking at the supplemental plans now or can they change throughout the year? I'm in Illinois.

[FreddieFIRE]

Great analysis
Part B deductible is included in max plan G-HD "deductible" ... misworded by Medicare as it should be out of pocket max.

Thanks. That us what I thought as well. That would likely tilt my analysis slightly more in favor of G-HD.

You can include "earnings" on money NOT spent...it makes plan G-HD even better.

Good point. For the next several years, every dollar less that I spend results in one more dollar in my Roth, invested in stocks with tax free earnings.

Further, include additional tax savings and earnings by paying G-HD out of pocket costs through HSA. For plan G and plan G-HD the premiums cannot be paid through HSA.

Yep. I did think about that, and will benefit as I will be burning down many years of deferred HSA contributions.

This makes G-HD better in all scenarios you looked at.

Certainly. Unless I'm totally missing something, it appears that there is no good reason for me not to just plan on G-HD.

[Dottie57]

Lower utilization is the goal of HD plans, but that doesn't mean that the pool is healthier- they are getting older after all and medical problems will appear/compound.

I suspect that they also attract a higher proportion of people whose finances are stressed. Wealthier people tend to be healthier.

I suspect that 5% of you is probably asking the question; is this really where you want to cut corners

Extra copay/deductible/co-insurance costs may discourage you from seeking/receiving care that may lead to earlier diagnosis of ailments.

I wouldn't call it "cutting corners". It's a decision based on estimated probabilities, just like a lot of other types of insurance.

And one could argue that Plan G causes people to make a lot of unnecessary doctor visits. We've heard all the arguments for all the plans.

No one enjoys going to extra visits. I do want appropriate tests.

[cks]

OP, I don't think you've factored in the increases in the premiums and deductible amounts in your calculation:

https://65medicare.org/high-deductible- ... -cautions/:

Lastly, you should be aware that the deductible on the high deductible Plan G changes every year. In the last five years, it has gone from $2200 to $2800, a 27% increase in that time period.

Good luck!

[FreddieFIRE]

Lastly, you should be aware that the deductible on the high deductible Plan G changes every year. In the last five years, it has gone from $2200 to $2800, a 27% increase in that time period.

Isn't that just an inflation adjustment based upon CPI?

If so, the statement "It is not likely that this trend of the increasing deductible will lessen over time" would likely be inaccurate.

It appears that the link is to an insurance broker website. If so, wouldn't they have a vested interest in steering folks to more expensive options with more lucrative commissions?

[FreddieFIRE]

I don't think you've factored in the increases in the premiums

I haven't attempted to factor in increases in premiums. That would be relevant if:
a) both G and G-HD premiums increase faster than the rate of inflation (they certainly might) and
b) the G-HD premiums increased at a faster rate than the G premiums (we have no idea of this - it certainly could be the opposite)

[WhyNotUs]

We have an insurance broker who I trust. One of my desires was to sign up for a plan that would stay in our market, one of the most expensive in the US. Her suggestion was a plan from Anthem G plan based on her 20+ years experience in the market. She also signed me up for a Wellcare Part D plan based on my lack of prescription use. It is noteworthy to me that she recommended a plan that does not pay her a commission. I offered to pay for her time but she said Medicare does not allow that. It reinforced my faith that she is offering the best advice she can while recognizing that the insurance market is constantly changing and devolving.

Google “your state name SHIP” so you can call them to get specific state Medicare information.

bill

I'll reach out to them at some point. Do I need to have a list of questions prior?
[/quote]

[goaties]

C) Bad year: I incur $15,000 (or more) of medical expenses (doctor visits, imaging, lab work, surgery). I will be responsible for the Medicare Part B deductible plus 20% x $14,743 = $2,948.60 which will be capped at the $2,875 G-HD deductible.
.......
This is a first cut at this analysis. Corrections/clarifications are welcomed. Thanks.

You might be as shocked as I was to realize that a "Bad year" could be significantly worse than you outlined above:
https://www.youtube.com/watch?v=77YF-TL0n-8

I think I posted this link in another Medicare thread recently because it was so surprising to me. I doubt this scenario (over 300K in Medicare-approved chemotherapy cost) happens more than once in a lifetime, but boy, even once it surely could break *my* bank. I view G-HD as providing the much-needed MOP for real Medicare.

[Svensk Anga]

OP, I don't think you've factored in the increases in the premiums and deductible amounts in your calculation:

https://65medicare.org/high-deductible- ... -cautions/:

Lastly, you should be aware that the deductible on the high deductible Plan G changes every year. In the last five years, it has gone from $2200 to $2800, a 27% increase in that time period.

Good luck!

The big deductible is adjusted every year according to CPI-U, so about 2.5%/year for the last decade.

I would expect the premiums for the plans that cover almost all expenses (G and to a lesser extent N) to increase at the rate of medical cost inflation, which is almost always more than CPI-U. Supposedly, the inflation in the high deductible amount reduces the pressure on G-HD insurers to raise their premiums. The implication is that G-HD ought to become more attractive relative to G over time, given a constant amount of medical care, especially if G-HD insureds are lower risk.

Note that on G-HD, one has to pay the part A deductible if admitted to the hospital (inpatient). It is $1676 for 2025. It is possible to pay it more than once a year too. This counts toward the G-HD high deductible. I figure that it is currently tough to max out the deductible on just Part B charges, but a good chance to do so if one is hospitalized. For my wife who is a fairly heavy users of medical services, I figured that G-HD was better than N if she could avoid being hospitalized more than once every two years. Seemed like a safe bet to me and the risk of being wrong was not huge. How this all works out 20 years from now given evolving premium rates and inflation in the other values is pretty uncertain.

I suggest asking your broker for the medical loss ratio for the insurers/plans you are considering. The lower it is, the less pressure there is on premiums in the near term and the less chance for your state to approve a big rate increase. United American G-HD in FL was 72% recently. You want to be well clear of 80%.

[ModifiedDuration]

Plan G-HD premiums usually go up not at all or $1-$3 a month each year. The Plan G-HD participants tend to be healthy, which helps keep the premiums down. The Plan G-HD maximum out-of-pocket goes up directly in line with the CPI (you will probably reach that infrequently).

Plan G premiums on average go up much more quickly than the CPI and, unlike the Plan G-HD maximum out-of- pocket, you will have to pay this higher premium whether you have many claims or not.

The actuarial consulting firm Telos publishes data on the nationwide average increase in Plan G premiums for the major insurers and the data is rather concerning.

https://www.telosactuarial.com/blog/med ... ns-2024-q3

Plan G premiums go up significantly for several reasons:

First, it is a less healthy pool. People who are entering Medicare and have health issues tend to sign-up for Plan G, the most comprehensive Medicare Supplement Plan. This tends to result in higher premium increases going forward.

Second, if one is eligible for Guaranteed Issue Rights, they can sign-up for Plan G without underwriting. This leads to individuals who normally would not be able to get Plan G to get it without underwriting and higher premiums for everyone.

Third, there have been a a lot of studies that have shown even a shall copay discourages people from going to the doctor in situations where it really isn’t warranted. Since there is no copay after paying the Part B deductible with Plan G, some people with Plan G may be going to the doctor when it really isn’t necessary, resulting in higher premiums for everyone with the Plan.

Plan G-HD is United American’s “bread and butter”. They are known for low, stable premiums and Plan G-HD with them is worth seriously considering.

[FreddieFIRE]

You might be as shocked as I was to realize that a "Bad year" could be significantly worse than you outlined above:
https://www.youtube.com/watch?v=77YF-TL0n-8

I defined "bad year" as $15,000 or more, because beyond that there is absolutely no difference between G and G-HD. Was I missing something?

[FreddieFIRE]

I view G-HD as providing the much-needed MOP for real Medicare.

What is "MOP?"

[FreddieFIRE]

I suggest asking your broker for the medical loss ratio for the insurers/plans you are considering. The lower it is, the less pressure there is on premiums in the near term and the less chance for your state to approve a big rate increase. United American G-HD in FL was 72% recently. You want to be well clear of 80%.

Thank you. That's good to keep in mind.

[goaties]

You might be as shocked as I was to realize that a "Bad year" could be significantly worse than you outlined above:
https://www.youtube.com/watch?v=77YF-TL0n-8

I defined "bad year" as $15,000 or more, because beyond that there is absolutely no difference between G and G-HD. Was I missing something?

No, you are not. I forgot to make my point! My point was that you had done all kinds of careful analysis using real dollar amounts which no one could possibly predict--and that's not how I look at it. To me Plan G gives you "first dollar" coverage, which some people seem to emotionally need. Plan G-HD gives you a MOP (Max Out of Pocket) for those of us who don't mind paying medical bills as they arise. The difference is more about attitude than about which plan costs a few thousand more. In the world of medical expenses, a few thousand dollars is pocket lint.

[FreddieFIRE]

Plan G-HD is United American’s “bread and butter”. They are known for low, stable premiums and Plan G-HD with them is worth seriously considering.

Thank you! Am I correct in understanding that Globe Life is really United American, but just sold direct and not through a broker? I've heard good things, which is why I used them in my example. They are not the cheapest in my market.

[FreddieFIRE]

I defined "bad year" as $15,000 or more, because beyond that there is absolutely no difference between G and G-HD. Was I missing something?

No, you are not. I forgot to make my point! My point was that you had done all kinds of careful analysis using real dollar amounts which no one could possibly predict--and that's not how I look at it. To me Plan G gives you "first dollar" coverage, which some people seem to emotionally need. Plan G-HD gives you a MOP (Max Out of Pocket) for those of us who don't mind paying medical bills as they arise. The difference is more about attitude than about which plan costs a few thousand more. In the world of medical expenses, a few thousand dollars is pocket lint.

Thank you for the clarification. I'm 99% analytical and then some soft stuff that rarely gets in the way (if it even shows up). I'm not sure what you are referring to as me using amounts that I can't predict. They were in no way predictions. Merely illustrations. The analysis is extremely straight forward. It's just math. I'm not sure why you mention "a few thousand dollars" when my first, very likely, scenario illustrated a $14K delta. Maybe that's "pocket lint" in a lifetime of Boglehead finances. It certainly wouldn't keep me awake at night. It would make me feel foolish if I'm paying it for no good (analytical) reason.

I have zero emotional need for first dollar coverage. To be accurate, isn't the first dollar that first premium dollar you pay on January 1?

[GaryA505]

You might be as shocked as I was to realize that a "Bad year" could be significantly worse than you outlined above:
https://www.youtube.com/watch?v=77YF-TL0n-8

I defined "bad year" as $15,000 or more, because beyond that there is absolutely no difference between G and G-HD. Was I missing something?

I don't think you missed anything. The G-HD deductible is actually a MOOP so it doesn't matter if your bad year is $15,000 or $150,000 or $1,500,000.
I also think your analysis is very good. It's much the same thought process I went through, though yours has much more detail and is more complete.

In the end, it's a guessing game as to which is better financially, though I one's current health needs to be factored into the guess. I mean, if someone has diabetes, kidney failure, and needs a quadruple bypass I can't imagine that G-HD would be a good idea. On the other hand, someone who can pass medical underwriting and has a family history of good health/longevity is likely to be better off with G-HD.

The psychological factor should be ignored though. Some people get great comfort from knowing that they will never have to pay more than the Part B deductible, and having this comfort is worth the extra money they have to pay for Plan G. I think insurance agents are quick to pick up on this when talking to a client, and it makes an easy sale for Part G (for which they get a very much higher commission).

[FreddieFIRE]

In the end, it's a guessing game as to which is better financially, though I one's current health needs to be factored into the guess. I mean, if someone has diabetes, kidney failure, and needs a quadruple bypass I can't imagine that G-HD would be a good idea. On the other hand, someone who can pass medical underwriting and has a family history of good health/longevity is likely to be better off with G-HD.

Thanks Gary. I appreciate your inputs. Like many/most, my healthcare needs (current and anticipated) is somewhere in the middle. Based upon my high level analysis posted above, I would guess that I'm about 80/20 on this. 80% chance that G-HD will be financially desirable and 20% (bad cases) G would be better. Even in the worst case scenario, under current numbers the most I would "lose" would be about six hundred bucks a year. I guess to be pragmatic, if I am in that bad of health I'm likely not going to need any healthcare for many more years.

I likely couldn't pass underwriting right now, and that stuff just doesn't get any better.....

[FreddieFIRE]

The psychological factor should be ignored though. Some people get great comfort from knowing that they will never have to pay more than the Part B deductible, and having this comfort is worth the extra money they have to pay for Plan G. I think insurance agents are quick to pick up on this when talking to a client, and it makes an easy sale for Part G (for which they get a very much higher commission).

Thank you. I think that is a very valid summary of opinions/thoughts/emotions I have encountered both here on this forum and in other places. I've heard some reports that Brokers are not very responsive/helpful to folks leaning towards G-HD, and this is likely why.

[ModifiedDuration]

Plan G-HD is United American’s “bread and butter”. They are known for low, stable premiums and Plan G-HD with them is worth seriously considering.

Thank you! Am I correct in understanding that Globe Life is really United American, but just sold direct and not through a broker? I've heard good things, which is why I used them in my example. They are not the cheapest in my market.

Globe Life is the parent company of United American.

If you want to buy from them, that is ok, too.

By the way, if you were to go with United American and need an agent, a lot of agents either don't sell Plan G-HD or try and talk you out of it, due to the low commission.

Medigap Seminars is glad to sell Plan G-HD and several of my friends have had good experience with Jessica Cudzil there:

https://medigapseminars.org/

[GaryA505]

The psychological factor should be ignored though. Some people get great comfort from knowing that they will never have to pay more than the Part B deductible, and having this comfort is worth the extra money they have to pay for Plan G. I think insurance agents are quick to pick up on this when talking to a client, and it makes an easy sale for Part G (for which they get a very much higher commission).

Thank you. I think that is a very valid summary of opinions/thoughts/emotions I have encountered both here on this forum and in other places. I've heard some reports that Brokers are not very responsive/helpful to folks leaning towards G-HD, and this is likely why.

I had heard that too, and it makes sense. When I called one agent I started by saying "I know you guys don't make very much commission on G-HD", but he said "that's ok, I sell a lot of it and it's a good choice for a lot of people". That's my kind of agent.

[cks]

OP, I respect your decision- it will likely work out for you.

That being said, my opinion is that you're basing some of your assumptions based on grammar school math when at the very least, you need multivariable or stochastic calculus given the number of variables and unknowns. Even then, you can ask any economist how accurate your "guess" would be.

A comment was also made that the pool in G-HD plans are "healthier". I would appreciate a citation for that claim. If this is true, then the OP doesn't have to worry about dead pools.

It may turn out that a majority of G-HD pools may be lower consumers of health care dollars. Lower spending doesn't mean healthier. Someone who is diagnosed with stage IV cancer will likely pass in a few months and utilize less healthcare services than someone who is diagnosed in an early stage and utilize health services for many years. Same goes for someone walking around with a widow maker until it's too late. He will use no healthcare services as opposed to someone who went to see his doctor about a heartburn and received a stent.

[ModifiedDuration]

I will also be signing up this year but not until summer. Is it wise to start looking at the supplemental plans now or can they change throughout the year? I'm in Illinois.

You can look at Medicare Supplement pricing in your zip code at the Medicare website right now. It is possible that some insurers could get a premium increase approved by the Illinois Insurance Commissioner between now and the summer, but there probably won’t be a premium change for most of the insurers.

You do know that Illinois has a Birthday Rule that allows Medigap enrollees who are at least 65 years old to 75 years old, 45 days after their birthday, to change their Medigap policy with no health questions? They must purchase a Medigap policy with equal or lesser coverage from their current Medigap carrier to use this enrollment period.