Why arent high deductible medigap plans more popular?

[LostDollar]

In many cases with agents, it's true about the commission. However, for many of us who've been in the business a great while with agents, commission is the very last thing we think of.

For agents who are desperate, broke, and selfish, then yes.

Also, an agent's biggest mistake is to keep thinking that money is always the main motivator for everyone. It's not. But the only way you find out is if you ask questions and listen to them.

Many people who are even on a more limited budget but don't want an advantage plan will opt for Plan N or even G over an HDG for its simplicity. Keep ramming savings down their throats while they're more worried about ease of use and health issues, and you can quickly expect the "let me think about it" response.

It's the equivalent of "I love you, but I'm not IN love with you" in the relationship world. Do your job properly, and you won't have this issue.

Often, when you start explaining HDG to people, many will respond "No, I don't want that". Okay, moving right along...

If you continually go into your calls assuming everyone just wants to save every penny no matter what, a better agent who understands human behavior and buying motives will easily get that deal from you.

Caveat, not an agent. (I am a Medicare Beneficiary holding an HDF Medigap plan.)

Thank you for making that considered response to help op with evaluating his sales processes. (And thank YOU for extending the courtesy of making a response to me.)

Going back and looking at actual posts might show a different result, but at this remove, it feels like posts made as direct responses to me about HD F&G plans have been heavily weighted towards their poor commission return for agents.

( @sshafran , feel free to weigh in at any time!

)

@somarco has remarked a number of times, something like: "Buying decisions are made on emotions". I am not a salesperson so I don't understand that well, or how a salesperson should use it. I do think that fits right in with your last paragraph above. And, based on somarco's experience, if nothing else, I know that if I was a salesperson, I would disregard that comment and concept at my peril.

 

[LostDollar]

Many people who are even on a more limited budget but don't want an advantage plan will opt for Plan N or even G over an HDG for its simplicity. Keep ramming savings down their throats while they're more worried about ease of use and health issues, and you can quickly expect the "let me think about it" response.

This is consistent with kgmom's comments about mental capacity as one ages, and its relationship to additional paperwork requirements for both N and HDG over G.

(And the older preference of some for Plan F over Plan G, even though math favored Plan G.)

 

[Bevo]

Caveat, not an agent. (I am a Medicare Beneficiary holding an HDF Medigap plan.)

Thank you for making that considered response to help op with evaluating his sales processes. (And thank YOU for extending the courtesy of making a response to me.)

Going back and looking at actual posts might show a different result, but at this remove, it feels like posts made as direct responses to me about HD F&G plans have been heavily weighted towards their poor commission return for agents.

( @sshafran , feel free to weigh in at any time!

)

@somarco has remarked a number of times, something like: "Buying decisions are made on emotions". I am not a salesperson so I don't understand that well, or how a salesperson should use it. I do think that fits right in with your last paragraph above. And, based on somarco's experience, if nothing else, I know that if I was a salesperson, I would disregard that comment and concept at my peril.

In advanced negotiation and sales training, one of the very first things we taught in the beginning session of every class, was once you learn these techniques, you literally will feel like you have an unfair advantage over people.

The 2nd thing we stressed was that you MUST use your newly acquired skills for good only. Somarco is correct, most buying decisions for most people are in fact made on emotions.

With great power, comes great responsibility. Karma's a bitch.

 

[GoPokes]

I did an analysis for a plan G and high deductible G over 10 years. The G plan would cost $15,700 for 10 years and the HD G would be $6,150 for the premium for 10 years. Also added in the deductible of $2800 for 3 of the 10 years, and the total HD G premium and the $2800 deductible comes out to $14,550…still less than the premium alone for Part G for those . Even the Plan N can't compete at $11,400 for 10 years premium alone. Why wouldnt everyone be getting this plan? Am I missing something?

Edit: Yes I messed up on the maths. Stupid excel!

I like running the numbers. And I like your breakdown.

However, I will take it a step further...

15,700 - 14,550 = 1,150

1,150 / 120 months = 9.58

So, I can pay $9.58 more per month, and not have to mess with any of those deductibles, coinsurance, and bills ?

The experience, feeling the peace of mind, looks and sounds great.

The logic makes the difference miniscule. And these are the retirement years, you saved for these years, dont you want it simple where you can afford it?

 

[pogo]

Because paying a good sum for a premium every single month and then telling someone absolutely nothing is covered until you pay another $2,800 is a very hard sell, psychologically. If you're gonna do that, you're honestly much better off with a Medicare Advantage plan in most cases.

The $2800 is a Plan HDG deductible. OM will pay 80% after the Part B deductible, and the plan pays $0 until the member payment of the remaining 20% reaches $2800.

In my state, the difference in premium between a T65 G and HDG is about $100/mo. That means someone in a HDG will have lower total OOP in a HDG than in a G as long as their total covered medical expenses for the year is less than ~$6000. ($1200 savings in premium cost equals 20% of $6000.)

The difference between G and HDG varies by state. In Connecticut, it's $160/mo. so the breakeven point is ~$9600. In Florida, $120/mo makes the breakeven point ~$7200.

HDG isn't like a MSA where absolutely nothing is covered until the full deductible is paid.

 

[LostDollar]

The $2800 is a Plan HDG deductible. OM will pay 80% after the Part B deductible, and the plan pays $0 until the member payment of the remaining 20% reaches $2800.

In my state, the difference in premium between a T65 G and HDG is about $100/mo. That means someone in a HDG will have lower total OOP in a HDG than in a G as long as their total covered medical expenses for the year is less than ~$6000. ($1200 savings in premium cost equals 20% of $6000.)

The difference between G and HDG varies by state. In Connecticut, it's $160/mo. so the breakeven point is ~$9600. In Florida, $120/mo makes the breakeven point ~$7200.

HDG isn't like a MSA where absolutely nothing is covered until the full deductible is paid.

Caveat, not an agent.

Not sure on this because I have HDF, but I think for most people, many years, the Part B deductible will be included as part of the HDG deductible?

I like your comment about the MSA. I hadn't thought of that particular comparison.

 

[Yagents]

HDG's are the future (3 to 5 yrs out). Get used to it. If UHC getting in the market, there's a reason. It's in the middle between MAPD and plan G.

1. More people want to avoid those shitty MAPD plans. Got 3 calls TODAY, from people who want off their MAPD, all referrals of course. Doctor leaving network, rehab kicking husband out, can't go to Mayo. It's real, somehow other agents don't get these calls.

2. Supplement premiums are getting high, $240 deductibles are just logically too low (my car is $1000 and home is 1% deductible and HSA is $7500), and most people are getting used to higher out of pocket. The Premium difference has to be there, and in FL, it's like $150/mo or $1800 year, in AZ, it was $60/mo, but now $80+/mo difference, and will probably only grow.

HDG premiums will climb, along with commissions and OOP. It happened in ACA, gonna happen eventually in OM. I bring up HDG to those who are healthy and wealthy or in a rural area, and don't mind the extra bills in the mail...at least now.

BTW, Medicare pays 80% after part B deductible is met in HDG. So, it's difficult to hit $2800, just under Part B expenses. Can get their quicker if admitted under Part A deductible.

If MC still exists in present state, i'd buy HDG when 65

 

[Yagents]

I'll add.......HDG will be much like HSA's were in the beginning.

I started in 2003, the year HSA's came into law. Coming from financial background, I saw the writing on the wall. Lower premium, lower OOP, and tax deductions? EZ sell. "Sign me up, I don't want this damn copay plan".

Other agents and agencies shrugged it off. Why? Lower commissions, more education in the sales process, lack of understanding of tax codes, and how/why it's the best financial planning tool created (triple tax bene's).

20 years later, 50% of my book is still HSA's, and the overall market has grown substantially. 35 million have one today with $116 billion in assets.

 

[Chazm]

This thread cursed me. I haven't done HDG in two years. I just sold one tonight.

 

[pogo]

Not sure on this because I have HDF, but I think for most people, many years, the Part B deductible will be included as part of the HDG deductible?

You're right, the Part B deductible is included as part of the HDG deductible. Including the B ded in the calculation actually raises the breakeven point by the amount of the B ded.

Using approximate premiums as an example.

G: $150/mo premium so annual OOP is 12*150+240=2040

HDG: someone paying $50/mo will have OOP of $2040 when annual covered expenses are $6240 (premium $600, $240 Part B ded, 20% of $6000 in expenses after B ded)

In this scenario, HDG max out of pocket would be $3400 (premium + HDG ded). This OOP would be reached when total covered Medicare expenses come to around $13,000.

For anyone wanting to find the breakeven point in their state, the formula is (G monthly premium - HDG monthly premium) * 60 + B deductible