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High-deductible Medigap Policies

Most Medicare benefits are included in two parts, A and B. A and B, also called original Medicare, offers benefits for inpatient and outpatient hospital services, mental health services, home health, hospice care and preventive services like health screens, exams and vaccinations. However, Medicare is not free. Both Part A and Part B come with annual deductibles, premiums, co-payments and co-insurance. Medicare supplements, called Medigap, can help pay for these, but often have high premiums themselves. High-deductible Medigap plans, however, feature lower monthly premiums in return for a higher annual deductible payment.

  1. Plan J

    • Plan J was a Medigap plan sold up until 2010. Plan J was available as both a regular policy and as a high-deductible policy. As of June 1, 2010, Plan J was discontinued and no longer available for new buyers. However, customers who had already purchased Plan J were allowed to keep it if they chose.

    Plan F

    • Plan F is the only other Medigap policy which is offered with a high-deducible option. As of 2011, Plan F was still sold in both high-deductible and regular forms. Plan F can also be purchased as a Medicare Select option in some states. Medicare Select allows customers to buy Medigap in a form similar to an HMO health insurance plan, where medical services must be obtained by approved providers from within their insurance company's network.

    Plan J Benefits

    • Both Plan J and Plan F come with a large number of benefits. Plan J policies included coverage for both the Part A and Part B deductibles, skilled nursing facility co-insurance, Part A co-insurance after all regular hospital benefits have been used, the excess fees for Part B and the first three pints of blood per year. Plan J also carried the at-home recovery benefit, which covered home health services Medicare usually does not pay, and a foreign travel emergency benefit, which helps pay for medical treatment needed while outside of the U.S.

    Plan F Benefits

    • Plan F benefits are similar to those of Plan J. As of 2010, the at-home recovery benefits was completely dropped from Medigap, but Plan F does offer the foreign travel emergency benefit, Part A hospital co-insurance coverage and payment for Part B excess charges, the parts A and B deductibles, the cost of the first three pints of blood, and hospice and Part B co-insurance. In 2011, Plan F offers all possible benefits available through Medigap plans.

    Deductibles

    • Plans J and F have annual deductibles that must be paid before insurance begins covering medical costs. These deductible amounts can change. In 2011, the annual amount for high-deductible plans was $2,000. The foreign travel emergency benefit offered by both Plan J and Plan F also has its own, separate deductible. Although considerably less than the annual deductible, it, too, must be paid by the patient before Medigap coverage will begin. As of 2010, the foreign travel emergency deductible was $250.

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