How it works
Medigap plans are standardized by letter - every carrier's Plan G covers the same gaps - so the real shopping variable is price structure: monthly premium versus deductible versus copays. That standardization makes the choice unusually computable, and this framework computes it while staying deliberately letter-neutral: enter any two quotes' premiums and deductibles along with your expected annual covered charges, and the engine totals each design's first-year cost, finds the usage level where the two cross, and extends the comparison across your holding horizon. The structural insight it surfaces is that high-deductible designs win in low-cost years and lose in heavy ones: their premium saving is certain while their deductible risk is bounded, so the breakeven covered-charges figure tells you exactly how sick a year must get before the richer design repays its extra premium. Two cautions frame honest use. Copay differences between plans shift these totals - hold them equal or add the expected difference manually before trusting the verdict. And Medigap pricing itself drifts: community-rated, issue-age-rated and attained-age-rated carriers age very differently, so a quote that wins today can lose within a decade of renewals. This tool teaches the arithmetic; plan selection deserves quotes from multiple carriers and confirmation of current rules at Medicare.gov.
Formula
cost = premium x 12 + min(covered charges, deductible) | breakeven charges solve cost(A) = cost(B) | horizon advantage = (cheaper annual cost) x years
Tips
- Hold copays equal between the two quotes or add expected copay differences manually first.
- The breakeven figure, not the first-year verdict, is the durable answer - health costs trend upward with age.
- Ask each carrier how they rate age: issue-age pricing locks today's premium logic; attained-age rises steeply.
- Household discounts of 5-15% exist at many carriers even when only one spouse enrolls.
- Confirm current plan availability and rules at Medicare.gov - this framework educates on math, not selection.
Frequently asked questions
- How do I compare two Medigap quotes fairly?
- Total each design's realistic annual cost: twelve months of premium plus whatever deductible and copays your expected usage triggers, then extend across the years you expect to keep the plan. Premium-only comparisons flatter cheap attained-age policies whose rates climb fastest; deductible-only comparisons ignore the certain monthly saving.
- Is a high-deductible Medigap plan worth it?
- It wins when years stay medically quiet: the premium saving is guaranteed while the large deductible bites only in heavy years. On these defaults the cheaper-premium design saves about $456 annually until covered charges exceed that gap, after which the full-deductible design pulls ahead permanently for that year.
- Why do identical Medigap plans have different prices?
- Because plans are standardized by benefit but not by price. Carriers rate differently - community-rated pools everyone together, issue-age locks your entry age forever, attained-age raises premiums as you age - and load different household discounts and underwriting. Identical letters can diverge by hundreds of dollars annually within one ZIP code.
- What does 'covered charges' mean in this framework?
- The amount providers bill for Medicare-approved services during the year before supplement cost-sharing applies - roughly what Medicare allows. It is not what you pay; it is the base the deductible applies against. Higher expected charges push the comparison toward lower-deductible designs; quiet years favor premium savings.
- Can I switch Medigap plans later?
- Outside your initial six-month open enrollment, switching usually requires medical underwriting except when returning to a guaranteed-issue window - which makes the first choice stickier than most insurance decisions. That permanence is why comparing structures carefully now matters more than finding the cheapest first-year quote.