High-Deductible Plan G in 2025: Worth the Risk or Smart Savings?

When people think about Medicare Supplement plans, the debate often centers on Plan G vs. Plan N. But there’s another option that’s frequently overlooked—even by brokers. You won’t even see it highlighted in Medicare’s official plan comparison chart unless you read the fine print.

It’s the High-Deductible Plan G (HDG). Let’s look at how it works, why some people love it, why others avoid it, and whether it could be the right fit for you in 2025.

How High-Deductible Plan G Works

Like the standard Plan G, the high-deductible version covers nearly all Medicare-approved expenses after Original Medicare pays its share. The difference is what you pay before the plan kicks in.

• In 2025, the deductible is $2,840.
• You’re responsible for Medicare’s normal cost-sharing (like Part B deductible, coinsurance, and Part A inpatient deductible) until you hit that $2,840 cap.
• After that, your High-Deductible Plan G works just like the traditional Plan G.

Think of it as Original Medicare with a safety net—you’ll never pay more than the $2,840 deductible for covered services in a year, but until you reach it, you’re carrying more of the upfront risk.

Examples of How Costs Work

• Doctor’s visit under Part B: With standard Plan G, after paying the small Part B deductible, your plan covers the rest. With High-Deductible G, you pay the deductible ($257 in 2025) plus 20% coinsurance until your costs reach $2,840 for the year.
• Hospital stay under Part A: A traditional Plan G pays the $1,676 Part A deductible for you. With High-Deductible G, that amount goes toward your $2,840 cap.

In other words, you’ll spend more out of pocket early in the year with HDG, but your worst-case exposure is capped.

Why People Choose High-Deductible Plan G

1. Lower premiums – In states like Michigan and Texas, HDG averages about $80 less per month than standard Plan G and around $50 less than Plan N. In Florida, the gap is even bigger—Plan G can cost $130 more per month.
2. Slower rate increases – On average, Plan G premiums increase ~6.5% per year, while HDG has only increased around 2.5% per year. Over decades, that adds up.
3. Same flexibility as other Medigap plans – You can see any doctor who takes Medicare nationwide, without the networks and prior authorizations that come with Medicare Advantage.
4. Best for savers – If you’re healthy and have funds set aside (like in a Health Savings Account), HDG can be a cost-efficient way to stay covered.

Why It May Be Risky

1. Bigger bills upfront – A $2,840 deductible is no small number, especially if you get sick early in the year.
2. Hard to switch later – If your health changes, you may not qualify to move back into a regular Plan G or Plan N. Most states require underwriting if you want to switch.
3. Budget unpredictability – With standard Plan G, you know your costs: the monthly premium plus the small Part B deductible. With HDG, your out-of-pocket bills are less predictable.
4. Psychological factor – Many clients tell us it feels like they don’t have coverage unless they hit the deductible—since the plan technically doesn’t pay until then.

Long-Term Cost Projections

Looking at the numbers long-term is where High-Deductible Plan G can really shine:

• Over 25 years, cumulative costs (premiums + out-of-pocket) often come out lower than standard Plan G, especially in higher-premium states like Florida.
• Even in a “worst-case” scenario where you hit the deductible every year, HDG can still be competitive over time thanks to lower premiums and slower rate hikes.
• For someone with “average health,” paying around $1,632 out of pocket annually (based on AARP data), HDG often costs less overall than Plan N or Plan G.

Who Should Consider It?

High-Deductible Plan G could be the right choice if:

• You’re healthy and rarely use medical services.
• You can comfortably pay the $2,840 deductible if needed.
• You want lower premiums and are okay with risk.
• You live in a state with especially high Plan G or Plan N premiums (Florida, New York, etc.).

It may not be right if:

• You need frequent care or have chronic conditions.
• You’re on a fixed budget and value predictability.
• You’d struggle to pay a large out-of-pocket bill.

Final Thoughts

High-Deductible Plan G is a niche option. It’s not for everyone, and it’s not our default recommendation. But for the right person—especially healthy retirees who want low premiums and can absorb risk—it can be a smart long-term play.

The key is knowing your own comfort with risk. Insurance is there to protect against the unexpected, and HDG shifts some of that balance back onto you.

We always suggest pairing the HDG Medigap plan with cancer/heart attack/stroke insurance and, as for everyone - regardless of plan type - we recommend considering short term care insurance.

👉 Want help comparing numbers for your state and situation? Reach out to us at gmedicareteam.com. We’ll walk you through the math and help you decide if High-Deductible Plan G really is worth the risk.