Where in the World are High Deductible Health Plans?

High Deductible Plans versus Low Deductible Plans, TMA Blog

Well, it’s official. Plan F of Medicare is being retired. We know, please take a moment to quietly wipe the tears away.

Okay now that that’s over with, we can start asking some questions. What happens if you’re on plan F right now? Are you going to get kicked off? What will the new plan F be? Is there still a high deductible Med Supp plan? We have all of the answers and more!

Goodbye, F

So, here’s what we know for sure. Plan F is being phased out. By January 1st of 2020, it will no longer be a viable plan to sign onto. However, if you’re already on plan F, you don’t need to worry about losing coverage or having to change plans on a dime because you’ll be grandfathered into the system. Great news, right? It’ll still benefit you to take a look at your plan each year to make sure it’s still doing all the stuff you want it to do, but in the meantime, you don’t need to panic whatsoever.

Now for those of you wanting to sign on to plan F… get it while it’s hot. If you turn 65 before January 1st, 2020, consider this your call to action to get in on this first-dollar coverage while it’s still available. First-dollar coverage means that your insurance covers health care expenses without copayments or deductibles needing to be paid first. This is going to be the last of Medicare’s “first-dollar coverage,” as their plans from here on out will not be following this plan structure.

Hello, G

Plan G is set to announce that it will begin offering high deductible plans as of 2020, around the same time that plan F is officially discontinued. These plans, however, will not be the exact same, as plan G high deductible will not be able to cover part B of Medicare’s deductible like plan F did.

Which carriers are going to be offering the high deductible plan G? Unfortunately, it’s still too early in the process to tell for sure. While we can say it’ll most likely be the same carriers that offered the high deductible plan F, that’s just an educated guess. The closer we get to 2020 the clearer the future of this plan will become.

If you opt into a high deductible plan right now, you’re also able to start contributing to an MSA, or a medical savings account. This account collects money that you put into it to be spent exclusively on health care in the future. It’s essentially, as the name implies, a savings account that accumulates funds to make sure that if/when you need to visit the hospital in the future, you have the money specifically to cover whatever services or treatments you encounter. MSA’s come with some benefits as well, such as that the account rolls over each year, leaving you with an accrued sum that can be used as a medical nest egg of sorts.[get-quote w=’100%’ h=’325px’]

More on MSA

How do MSA’s accumulate money if you’re not the one putting funds in there? Well, your plan deposits funds into the account for medical expense purposes, and these run entirely untaxed as long as they pay for qualified medical expenditures. Also, like many other types of savings accounts, the MSA accrues interest throughout the year. If you take out any of the funds in an MSA for purposes other than medical, that amount can be taxed and penalized up to 50%. These plans can also come with additional benefits, like vision, hearing or dental care. It wholly depends on who the provider is, so it would be in your best interest to check firsthand with your plan to see what they’re going to cover. By law, MSA’s must be tied to a high deductible health plan.

Should You Get a High Deductible Plan?

High deductible plans are better suited for those that are more confident in gambling their health on a yearly basis, meaning that you’re assuming you won’t get sick anytime from now to the end of the year. If you do encounter health issues throughout the year that require extensive hospital or doctor visits, then you’d be facing a good deal of out-of-pocket costs not considering what would be covered potentially by your MSA. In short, high deductibles are for those that are sure of their health status while low deductible plans are for those that know they’re going to need to visit the doctor and require services and treatments regularly. The name of the game for MSA’s is minimal health costs.

Contact a licensed representative if you have any further questions about the changes being made, though some decisions still haven’t been made public yet regarding the new high deductible plan so answers might be limited. With 2020 just around the bend, we’ll have more information about this to be able to tell you how you should proceed. In the meantime, though, give us a ring if you think a high deductible health plan might be right for you! Medicare can be a confusing game, and it doesn’t need to be played alone.

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