Almost nobody knows about the High Deductible Plan F (HDF). And insurance agents rarely discuss it due to low premiums which translates into low commissions. But for those people who are looking for a plan to cover expenses they can’t afford while avoiding the limitations of an HMO, this could easily be the plan of choice.

An HDF will start paying the deductibles and coinsurance after these items total $2,200 (the amount will vary slightly from year to year). So while Medicare will pay their share you could be on the hook for up to $2,200 during the course of the year.

Why would anyone want to do this? Plain and simple. Value. The monthly premium for most people will be in the $30-40 range. That’s typically $120-150 less than a Plan F. So you save $1,400-1,800 by being willing to assume the first $2,200 of share of cost.

Let’s look at a real life example:

Mary goes to the doctor with shoulder pain on January 3. The doctor runs tests, x-ray, and maybe an MRI. The total allowable cost for all this is $1,183. Medicare has a deductible of $183 and then pays 80% of the remaining $1,000 balance. Mary will pay $383 for all those services against the annual maximum of $2,200.

The doctor recommends surgery. At that point Mary will likely pay the balance of costs until she has spent the entire $2,200. She is now done with her costs for the year.

Mary has had the HDF for 5 years with little expense. In those years she saved an average of $1,500 a year. That means she has already saved $7,500 in premiums. She can easily afford to pay for her services this year.

Again, it’s value that matters. Ask your agent about this concept. It’s not for everyone as some people might be hesitant to “risk” $2,200. But if you can guarantee a savings of $1,500 in premium it’s not much of a risk.