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The Hidden Value of High-Deductible Plan G

October 15th, 2025

2 min read

By www.psmbrokerage.com Admin

The Hidden Value of High-Deductible Plan G
3:13

As Medicare agents, we all know the landscape keeps changing. Plan designs shift, benefits evolve, and client preferences follow suit. While zero-premium Medicare Advantage plans continue to dominate the conversation, there’s a growing group of savvy seniors — and equally savvy agents — giving High-Deductible Plan G (HDG) another look, especially when paired with a Hospital Indemnity Plan (HIP).

This approach blends cost efficiency with flexibility, offering clients a way to maintain nationwide access and predictable costs without overpaying for coverage they may never fully use.

Why High-Deductible Plan G Deserves Attention

For years, many clients have believed that the best Medicare Supplement plan is the one that pays every bill immediately. But today’s consumers are more informed and cost-conscious. They’re looking for value, not just convenience — and that’s where HDG shines.

With HDG, Medicare still covers 80% of approved charges, and the supplement steps in after the $2,870 deductible (2025) is met. Because the insurer’s exposure begins later, premiums are substantially lower, and future rate increases are often smaller and more stable.

“High-Deductible Plan G is one of the most underrated products in the Medigap space,” says Mark Farrah, Senior Health Analyst at the American Association for Medicare Supplement Insurance. “It offers the same protections as standard Plan G but at a fraction of the cost — and for many retirees on fixed incomes, that flexibility matters.”

According to AAMSI’s 2024 Medigap Market Snapshot, enrollment in high-deductible Plan G grew by over 14% year-over-year, signaling renewed interest among cost-conscious beneficiaries.

The Hospital Indemnity Advantage

A Hospital Indemnity Plan (HIP) pairs naturally with HDG, covering many of the upfront costs seniors worry about most. HIP provides cash benefits directly to the policyholder when they’re hospitalized or undergo certain covered treatments. Those funds can help offset the HDG deductible or cover travel, lodging, and other expenses.

“When you layer Hospital Indemnity over High-Deductible Plan G, you create one of the most balanced, predictable coverage designs in Medicare,” explains Jamie Sarno, Vice President of Medicare Supplement & Specialty Health Products at AmeriLife. “It’s a modern approach to Medigap that gives seniors control and affordability.”

HIP premiums also tend to remain remarkably stable year to year, which helps clients manage their overall costs with fewer surprises.

The Numbers Tell the Story

Let’s look at a simple example:

  • A client undergoes a four-day hospital stay totaling $20,000 in approved Medicare charges.

  • Medicare pays $16,000 (80%), leaving $4,000 in cost-sharing.

  • With HDG, the client pays $2,870, and the supplement covers the remainder.

  • If their HIP provides $1,500 per stay, that benefit effectively reduces their out-of-pocket to just $1,370.

When you factor in the lower, steadier premiums, it’s easy to see why this pairing appeals to financially savvy clients who prefer predictability and independence.

A Balanced Perspective: There’s a Place for Both

Medicare Advantage remains a powerful, growing segment of the market — and for many clients, MA plans with zero premiums and built-in extras like dental or vision are the right fit.

But for others, especially those who prioritize provider freedom, travel flexibility, or predictable cost ceilings, HDG + HIP offers a compelling alternative.

“Medicare Advantage and Medicare Supplement plans are not competitors — they’re complementary tools,” says Kelly Hall, a veteran broker and Medicare trainer. “The best agents understand how to position both, helping each client find their own comfort zone.”

Why This Matters for Agents

Offering HDG alongside traditional MA options positions you as a true advisor, not just an enroller. It shows clients you’re thinking beyond trends — helping them find the right balance of coverage, control, and cost.

As Medicare Advantage evolves with more prior authorization requirements and network limits, having a strong understanding of Medigap alternatives helps you serve clients with greater confidence and credibility.

The Bottom Line

For seniors who value choice, stability, and peace of mind, a High-Deductible Plan G paired with a Hospital Indemnity Plan could be one of the smartest coverage designs available today.

It’s not about replacing Medicare Advantage — it’s about broadening your toolkit to meet the diverse needs of the clients you serve.

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