Copays vs High Deductible Medigap Plans–What’s the Best Option?

Clients aging into Medicare are smart to take advantage of the guaranteed issue and benefits that come when first eligible. Longevity and affordability over time are also important factors to consider, which is why agents are inviting clients to consider copay or High Deductible Medigap even if affordability isn’t an issue when they first retire.

Starting Medigap with a copay or high deductible option could reduce premiums by half in the first year, and with significantly lower premium increases over time, signing up for a cost sharing Medigap plan makes a lot of financial sense. Consider that if a low deductible Medigap plan increases premiums at 7%, the cost of coverage doubles in just ten years. It is the increase over time that can create financial issues for some seniors.

Signing up for affordable coverage is a must, which is why advisors are always searching for plans clients can afford for the long haul.

Let’s break down some of the average Medigap costs clients might see.

  • The average cost of an MN Basic (with riders) is over $200/month
  • The average cost of an MN copay plan is under $200/month
  • A MN High Deductible plan average is under $100/month

Members typically pay somewhere around $20-$50 per visit with a copay (Plan N). Luckily, the cost is not high enough that it would alter decisions on seeking care. Having a copay reduces unnecessary claims, which lowers premium increases over time. Cost sharing plans protect your clients and your Medigap block of business.

With a High Deductible Medigap, members pay 100% of costs until they hit the deductible ($2,340 for all MN HD Medigap plans). Like a copay plan, the low deductible does not prevent a client from seeking necessary care and allows them to take advantage of significant premium savings in years where they have low claims.

Discussing Medigap cost sharing plans with your client demonstrates the value of having a local professional advisor to help them work out the best approach for their health and financial needs.

Many clients are only shown MN Basic plans with riders, and it’s likely that a good number of them will appreciate lower premiums and lower increases overtime by considering a copay or High Deductible Medigap plan.

As with any Medigap plan, Cost Sharing plans have the portability and guaranteed coverage many clients are seeking. Once you start a conversation about lowering their premiums, you often earn the right to discuss how to address other concerns, such as Hospital Indemnity, Dental or a Cancer plan. During your suitability conversations, you should be identifying the right blend of plans to fulfill all their health and financial goals.

Medigap plans should be paired with high-quality dental coverage such as Ameritas or UnitedHealthone senior dental plans and a high or low coverage PDP.

When clients share costs, they flatten the premium curve leading to longer term affordability. This can be a double win for those choosing Plan N (copay) or High Deductible G when first eligible for Medicare.

If you are looking for a standalone PDP, consider Mutual of Omaha or SilverScripts. Each have high and low option coverage, with wide networks and formularies.

To get appointed or to learn more, reach out to LaRae Mills or Weston Peterson.