Is the wealth / cash flow problem in America forcing seniors to pick Medigap Plan G over HD-G?

[jo85336578]

Once a senior sees that the total annual cost of Plan HD-G premiums  (around $495) plus the annual deductible (this year $2950) in my case exceeds the annual cost of Plan G's premiums (my actual announced $3270) plus the $283 annual Part B deductible and sees that in either the best case or worst case scenario, the HD-G plan would save the senior money, the only reason I can imagine for not choosing the HD-G plan is the seniior's lack of wealth or cash flow to support the irregular cash flows (but lower expense) of the HD-G plan.

Some have said that they fear being on HD-G in a future that they ima gine will bring higher medical expenses. That is simply illogical because the HD-G pays the same as G once the annual deductible is met. (And the deductibles actually paid are already included in the worst (or best) case scenarios described above.

Some have mentioned perceived fear of not meeting medical underwriting to get back to either G or N. To that I ask, "Why you ever want to return to G or N" after enrolling in HD-G?  In coming years and for the rest of your life, the monthly premiums of either G or N are expected to ilancrease much more than HD-G. 

So it must be a worry that you cannot afford to possible irregular cash flows associated with HD-G. May I suggest that before signing up for HD-G, you establish a separate FDIC-insured savings account to pay for your HD-G monthly premiums ($41 in my case) plus any deductibles that you might have. And if I were to establish a separate savings account to pay for a Plan G (for its monthly premiums of $3270 plus the Part B deductible), I would have to deposit a greater amount. So while the cash flows would be irregular, the cost of Plan G would , in my case for 2027, would be greater than the cost of HD-G.

The figures above the 2027 premiums of a HD-G plan I have found from N.C. BCBS (for NC residents only) and the announced 2027 premiums of $270 for an AARP/UHC Plan G with spousal and new member discounts. I would bet with a high level of certainty that future G premiums will rise faster and more than HD-G premiums. 

[GailL1]

@jo85336578 

Thanks for starting a NEW thread on this type subject. 

I believe that it has to do with several different things -

1.  fear of the unknown - those HD plan deductibles rise with the CPI-U or COLA calculations - and in some recent years they have gone up rather abruptly because of inflation.  Plan G-HD hasn’t been around too long but it jumped up a good bit in 2022 and 2023 after those high COLAs.

How the COLA has occurred by year:

How the HD - Plan G (and Plan F-HD) have increased since 2015 based on the above COLA (CPI-U) increases.

These were the HD-G (and HD-F) deductibles in the year noted 

2.  Everyplace is different in premiums and therefore any savings:

The other thing is this savings is gonna be area specific because premiums are definitely lower some places than other.  All of the images are from the same source - just some broker site, but I thought they were a good reference - JUST DISREGARD THE CONTACT INFO for the broker - I did not have all the time necessary to edit the graphs.  Plus he did put it all together in one place for me.

 

3.  We forget

Plus sometimes people forget about the savings in the premiums when they are having to pay out of pocket more - Maybe it has something to do with getting ole but I don’t think so - sometimes / many times seniors just don’t understand for one reason or another.  I means some saved for retirement; others didn’t.  

Everybody has to do what is best for themselves or what they think is best for themselves and of course, according to their state law what they CAN actually do without underwriting or if they can pass underwriting.

I assume you know that in states where they underwrite to change plans or insurers, that just because one passes underwriting, they may not get the whatever plan at the regular rate - the insurer as part of the underwriting will added to the premium a certain amount to offset their risk - that is the purpose of underwriting - 

4. Places where there Underwriting is permitted:  The other thing is that in states where there is no law preventing underwriting, an insurer can also deny coverage for a pre-existing condition for a specific amount of time - I think it is normally about 6-months but that could be a fortune to some who have high health care cost for a specific condition.

5.  Losing coverage because of some condition and a fib:  

Then there are a few few seniors who fudge on their application for a new plan/insurer and if that condition comes up and the insurer investigates that it had some earlier Dx that they missed - they will deny you coverage and your lose the new policy and the old one is already gone.  There are only (2) ways to lose a Medigap policy - (1) not paying your premiums (2) fraud on your application.  

It is just like everything else about the program of Medicare - the details matter and those details can be at the Federal or state level.  So it is just good to know -

6.  We can blame others:

Therefore, sometimes if it is just a hassle to change - so they stick with what they have - and then b*tch and moan about their premiums going up.  Which is commonplace here - they are looking to blame somebody - might as well pick AARP - when in truth, it is their usage, their transference of the risk and medical as well as economic inflation that is the true culprit of increases in premiums.  

7.  The Solution of what might happen to us all:

But they do not want to hear that IF Medicare had an annual out of pocket maximum that there may be no need for a Medigap plan at all.  

Urban Institute.org - June 2022 - Adding an Out-of-Pocket Spending Limit to Traditional Medicare 

And that is the MOST common sense of it all - especially considering the current financial situation of Part A (HI Trust Fund) and the ever increasing Part B and D premiums (SMI ) with the Country’s debt level -

SSA.gov - Social Security Trustee Report 2025 Summary 

from the link ~

”The Hospital Insurance (HI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, three years earlier than reported last year. At that point, that fund’s reserves will become depleted and continuing program income will be sufficient to pay 89 percent of total scheduled benefits.

• The Supplementary Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because, unlike the other trust funds, its main financing sources—enrolled beneficiary premiums and the associated federal contributions from the Treasury—are automatically adjusted each year to cover costs for the upcoming year. Although the financing is assured, the rapidly rising SMI costs have been placing steadily increasing demands on beneficiaries and general taxpayers.”

I am a realist - 🤓 - Choose the plan that is best for your health and pocket book - that is all that one can do.