Original Medicare (Parts A and B) is great coverage, but it has holes. Part A has a $1,632 deductible per hospital stay (2024). Part B covers only 80% of outpatient care after the deductible. And there's no out-of-pocket maximum—meaning costs can add up quickly with a serious illness.
Medigap insurance (also called Medicare Supplement) plugs these gaps. It's sold by private insurers but standardized by federal law, making it easier to compare plans.
What Is Medigap Insurance?
Medigap policies help pay some of the healthcare costs that Original Medicare doesn't cover:
- Copayments
- Coinsurance
- Deductibles
- Foreign travel emergency care (some plans)
How Medigap Works
- Medicare pays its share of the Medicare-approved amount first
- Your Medigap policy pays its share (some or all of the remaining costs)
- You pay whatever's left (if anything)
What You Need
- Original Medicare Part A and Part B (you can't use Medigap with Medicare Advantage)
- A separate Part D plan for prescription drugs (Medigap doesn't cover prescriptions)
Medigap vs. Medicare Advantage
These are alternative ways to get Medicare coverage. With Medigap, you keep Original Medicare and add supplemental coverage. With Medicare Advantage, you replace Original Medicare with a bundled private plan. You can't have both.
Medigap Plan Options
Federal law standardizes Medigap plans. Each plan letter (A, B, C, D, F, G, K, L, M, N) offers a specific set of benefits, regardless of which insurance company sells it. Plan G from Company X covers exactly the same things as Plan G from Company Y—only the price differs.
Most Popular Plans
Plan G
Best for most people. Covers everything except the Part B deductible ($240 in 2024). After paying that small deductible, you have essentially zero out-of-pocket costs for Medicare-covered services.
Plan N
Lower premium option. Covers most gaps but has small copays: up to $20 for doctor visits, up to $50 for ER visits that don't result in admission. Doesn't cover Part B excess charges.
Plan F
Most comprehensive, but limited availability. Covers everything including the Part B deductible. Only available to people who became Medicare-eligible before January 1, 2020.
Medigap Plan Comparison
| Benefit | G | N | F* |
|---|---|---|---|
| Part A hospital coinsurance and costs | 100% | 100% | 100% |
| Part A hospice coinsurance | 100% | 100% | 100% |
| Part B coinsurance (20%) | 100% | 100%** | 100% |
| Part A deductible ($1,632) | 100% | 100% | 100% |
| Part B deductible ($240) | No | No | 100% |
| Part B excess charges | 100% | No | 100% |
| Foreign travel emergency | 80% | 80% | 80% |
*Plan F only available to those Medicare-eligible before 1/1/2020
**Plan N has copays: up to $20 office, up to $50 ER (if not admitted)
When to Buy Medigap
Timing matters enormously with Medigap because of guaranteed issue rights.
Medigap Open Enrollment Period
Your best opportunity to buy is during your 6-month Medigap Open Enrollment Period:
- Starts: The first day of the month you turn 65 AND are enrolled in Part B
- Lasts: 6 months
- Benefit: Guaranteed issue—companies must sell you any plan they offer at the same price as healthy applicants, regardless of your health
Example: You turn 65 in March and enroll in Part B that month. Your Medigap Open Enrollment runs March 1 through August 31.
Don't Miss This Window
After your Medigap Open Enrollment ends, insurance companies can refuse to sell you a policy or charge higher premiums based on your health. If you have pre-existing conditions, this could mean being denied coverage entirely or paying significantly more.
Guaranteed Issue Rights
Outside Open Enrollment, you have guaranteed issue rights in specific situations:
- Your Medicare Advantage plan leaves your area or stops offering coverage
- You leave a Medicare Advantage plan within 12 months of joining
- Your employer group coverage ends
- Your Medigap insurer goes bankrupt or you lose coverage through no fault of your own
Medigap Costs
Premium Pricing Methods
Insurance companies use different methods to set premiums:
Community-Rated (No-Age-Rated):
- Same premium regardless of age
- Best long-term value
- Premiums may still increase for inflation and other factors
Issue-Age-Rated:
- Premium based on age when you buy
- Doesn't increase due to aging (but can increase for other reasons)
- Good if you buy young
Attained-Age-Rated:
- Premium increases as you get older
- May start lower but becomes most expensive over time
- Most common pricing method
Typical Premium Ranges (2024)
| Plan | Monthly Premium Range |
|---|---|
| Plan G | $100-$300+ |
| Plan N | $75-$200+ |
| Plan F | $150-$400+ |
Premiums vary significantly by location, age, gender, and insurance company.
Other Costs to Consider
- Part B premium: $174.70/month (2024 standard; higher for high-income earners)
- Part D premium: Varies by plan ($0-$100+/month)
- Part B deductible: $240/year (if choosing Plan G or N)
- Plan N copays: Up to $20-$50 per visit
How to Choose a Medigap Plan
Step 1: Decide on Coverage Level
- Maximum protection: Plan G (or F if eligible)
- Budget-conscious: Plan N (with small copays)
- Catastrophic-only: Plans K or L (partial coverage with out-of-pocket limits)
Step 2: Compare Companies
Since benefits are standardized, compare:
- Premium (get quotes from multiple companies)
- Premium pricing method (community, issue-age, or attained-age)
- Company financial strength (A.M. Best rating)
- Customer service reputation
- Any additional benefits (some offer gym memberships, nurse hotlines)
Step 3: Get Multiple Quotes
Prices for identical coverage can vary by 50% or more between companies. Get quotes from:
- Medicare.gov (plan finder)
- State insurance department website
- Independent insurance brokers
- SHIP counselors (free help)
Plan G vs. Plan N: Which Is Better?
Choose Plan G if:
- You want predictable costs with no surprises
- You see doctors frequently
- Your doctors might charge excess fees
- You value simplicity
Choose Plan N if:
- You're comfortable with small copays
- You want lower premiums
- Your doctors accept Medicare assignment (no excess charges)
- You're generally healthy with few doctor visits
Switching Medigap Plans
You can apply to change Medigap plans anytime, but there are important considerations:
Medical Underwriting
Outside of Open Enrollment or guaranteed issue situations, companies can:
- Deny your application based on health
- Charge higher premiums for pre-existing conditions
- Exclude coverage for certain conditions
When Switching Makes Sense
- You're healthy and can pass underwriting
- You find significantly lower premiums elsewhere
- Your current company is raising rates substantially
- You have guaranteed issue rights due to a qualifying event
Tips for Switching
- Don't cancel your current plan until the new one is approved
- Compare premiums annually to catch rate increases
- Consider the pricing method—attained-age plans get expensive over time
Medigap vs. Medicare Advantage
| Feature | Medigap + Original Medicare | Medicare Advantage |
|---|---|---|
| Monthly premium | $100-$300+ (plus Part B) | Often $0 (plus Part B) |
| Out-of-pocket costs | Very low to zero | Copays, coinsurance |
| Doctor network | Any doctor accepting Medicare | Usually network required |
| Referrals needed | No | Often yes (HMO) |
| Drug coverage | Separate Part D plan | Usually included |
| Extra benefits | Minimal | Dental, vision, hearing common |
Medigap is often better if:
- You want maximum freedom to see any doctor
- You travel frequently or live part-year in another state
- You have significant health issues and want predictable costs
- You can afford the higher premiums
Medicare Advantage may be better if:
- You want lower monthly premiums
- You're comfortable using network doctors
- You want dental, vision, and hearing coverage included
- You're generally healthy
Common Medigap Mistakes to Avoid
These are the most common errors people make when purchasing or managing Medigap coverage:
Missing the Open Enrollment Period
The six-month Open Enrollment Period starting when you're 65 and enrolled in Part B is critical. During this time, insurers must sell you any Medigap policy they offer at the standard rate, regardless of health conditions. After this period, insurers in most states can deny coverage or charge more based on health. Don't let this window close without at least researching your options.
Not Comparing Prices
Medigap policies are standardized—Plan G from one company covers exactly the same things as Plan G from another. The only differences are price and service quality. Yet many people buy from the first company they contact without shopping around. Premiums for identical coverage can vary by hundreds of dollars per year. Always get quotes from multiple insurers.
Choosing Based on Premium Alone
The cheapest policy isn't always the best value. Consider how the company prices policies (attained-age pricing means premiums rise as you age), the company's financial stability and history of rate increases, and customer service reputation. A slightly higher premium from a stable company may be better than the lowest price from an insurer known for aggressive rate increases.
Forgetting About Prescription Drug Coverage
Medigap policies do not cover prescription drugs. You need a separate Part D plan for drug coverage. If you don't enroll in Part D when first eligible and later need it, you may face late enrollment penalties that last for life. Even if you take few medications now, enrolling in a basic Part D plan protects you from penalties.
Frequently Asked Questions
Medigap is private insurance that helps pay for costs Original Medicare doesn't cover, like deductibles, copayments, and coinsurance. It works alongside Medicare Parts A and B.
Plan G is often considered the best value for most people—covering nearly everything except the Part B deductible. Plan N costs less but has small copays for some visits.
Buy during your 6-month Medigap Open Enrollment Period, starting the month you turn 65 and enroll in Part B. During this window, insurers cannot deny you coverage or charge more due to health.
Premiums vary by plan, company, location, age, and gender. Plan G typically costs $100-$300+ per month. Premiums may increase with age depending on the pricing method.
You can apply to switch anytime, but outside Open Enrollment, companies can use medical underwriting—potentially denying coverage or charging more based on health conditions.
Resources
- Medicare.gov: Official Medigap information and plan finder
- SHIP: Free Medicare counseling in every state (shiphelp.org)
- State Insurance Department: Medigap rates and company information for your state