A Medigap plan covers costs that Original Medicare leaves you paying

Medigap (also called supplemental insurance) is a private insurance policy that pays some or all of the costs Original Medicare does not cover — copayments, coinsurance, and deductibles. It is sold by private insurance companies, not by Medicare itself. If you have Original Medicare (Part A and Part B), you can buy a Medigap plan to reduce what you pay out of pocket when you see a doctor or go to the hospital.

Medigap is different from Medicare Advantage (Part C), which is an alternative way to get Medicare benefits through a private plan. With Medigap, you keep Original Medicare and add a supplemental policy on top. With Medicare Advantage, you replace Original Medicare with a private plan that includes hospital and doctor coverage in one package.

Key Takeaways

  • Medigap plans are sold by private insurance companies and cover the copayments, coinsurance, and deductibles that Original Medicare does not pay.
  • There are ten standardized Medigap plans (A through N) in most states, and each plan covers the same benefits no matter which company sells it.
  • You can only buy a Medigap plan if you have Original Medicare Part A and Part B; you cannot use Medigap with Medicare Advantage.
  • The best time to buy Medigap is during your six-month open enrollment period, which starts the month you turn 65 and enroll in Medicare Part B.
  • Medigap premiums vary by insurance company, age, and location, and you pay the premium directly to the insurance company each month.

The ten standardized Medigap plans and what each covers

Medicare sets the rules for what each Medigap plan must cover, so Plan A from one insurance company covers the same benefits as Plan A from another company. The ten plans are labeled A, B, D, G, K, L, M, N, and two high-deductible versions of G and F. Most people choose Plan G or Plan N because they cover the most common costs.

Plan G covers Part B coinsurance (the percentage you pay after Medicare pays its share), Part A coinsurance for hospital stays, blood transfusions, and skilled nursing facility coinsurance. It does not cover the Part B deductible (the amount you must pay before Medicare starts paying). Plan N covers similar costs but has small copayments for doctor visits and emergency room visits, which makes the monthly premium lower than Plan G.

Plans A, B, D, K, and L cover fewer costs and have lower premiums, but you will pay more when you use medical services. Plan A is the most basic and least expensive. If you travel outside the United States, Plans C, D, G, and M include coverage for emergency medical care abroad, though this benefit is limited.

When you can buy a Medigap plan

Your best opportunity to buy Medigap is during your six-month open enrollment period, which starts the first day of the month you turn 65 and enroll in Medicare Part B. During this window, insurance companies cannot deny you coverage or charge you more because of health problems — a protection called may provide issue rights. If you wait until after this period ends, insurers can refuse to sell you a plan or charge you a higher premium based on your medical history.

If you miss your open enrollment period, you may still be able to buy Medigap in some states under a may provide issue right if you lose other coverage (such as employer health insurance or Medicare Advantage). Each state has different rules about when these rights explore, so contact your state health insurance counselor to learn what applies to you.

You can switch from one Medigap plan to another at any time, but if you switch after your open enrollment period, the new insurance company can charge you more or deny you coverage based on your health. Switching plans is easier if you move to a different state, because you may have may provide issue rights in your new state.

How much Medigap costs and how you pay

Medigap premiums vary widely depending on which plan you choose, which insurance company sells it, your age, and where you live. Plan A is usually the least expensive, and Plan G is usually more expensive because it covers more costs. A plan that costs $100 a month in one state might cost $150 in another state, and the same plan might cost different amounts from different insurance companies in the same city.

Insurance companies use three different methods to set Medigap premiums: age-based (your premium goes up as you get older), issue-age (your premium is based on your age when you buy the plan and stays the same as you age), or no-age-based (your premium does not change with age). You pay the premium directly to the insurance company, usually monthly, and this is separate from your Medicare Part B premium.

Some employers offer Medigap plans to retirees, and these group plans sometimes cost less than individual plans. If your employer offers retiree health coverage, ask whether it includes Medigap or whether you should buy an individual plan instead.

How Medigap works when you see a doctor or go to the hospital

When you receive medical care, Medicare pays its share first, and then your Medigap plan pays the costs Medicare does not cover (up to what your plan includes). You show both your Medicare card and your Medigap card to the provider. The provider bills Medicare, Medicare pays, and then the provider bills your Medigap insurance company for the remaining balance.

In most cases, you do not pay anything out of pocket because Medicare and Medigap together cover the full cost. However, if your Medigap plan does not cover a particular service (such as dental or vision care), you pay the full cost yourself. Medigap does not cover prescription drugs — you need a separate Part D prescription drug plan for that.

Medigap versus Medicare Advantage: which is right for you

With Medigap, you keep Original Medicare and can see any doctor or hospital that accepts Medicare. With Medicare Advantage, you get a private plan that replaces Original Medicare, and you usually must use doctors and hospitals in the plan's network. Medicare Advantage plans often include prescription drug coverage and extra benefits like dental or vision, but Medigap does not.

Medigap works best if you have doctors you want to keep seeing, travel frequently, or prefer predictable out-of-pocket costs. Medicare Advantage works best if you want prescription drug coverage included, do not mind using a network, or want dental and vision benefits. You cannot have both Medigap and Medicare Advantage at the same time.

If you are still working and have employer health coverage, you may not need Medigap right away. When you retire and lose that coverage, you may have a may provide issue right to buy Medigap without a waiting period or higher premiums.

Questions to ask your doctor or insurance agent

Before you buy a Medigap plan, ask your insurance agent which plan covers the services you use most often. If you see a specialist regularly, ask whether your current doctor accepts Medicare and will continue to see you with Medigap. Ask your agent to compare the monthly premium, annual deductible, and out-of-pocket costs for the plans you are considering.

Ask your doctor's office whether they accept Medigap and how billing works. Some offices have experience with certain Medigap plans and can tell you what to expect. If you take prescription medications, confirm that you understand Medigap does not cover drugs and that you will need to enroll in a Part D plan separately.

Frequently Asked Questions

Can I have both Medigap and Medicare Advantage at the same time?

No. You can have either Original Medicare with Medigap, or Medicare Advantage, but not both. If you have Medicare Advantage and want to switch to Medigap, you must first disenroll from Medicare Advantage and return to Original Medicare. You may have may provide issue rights to buy Medigap without a waiting period, depending on your situation and your state.

Does Medigap cover prescription drugs?

No. Medigap covers copayments and coinsurance for doctor visits and hospital care, but not prescription medications. You must enroll in a separate Medicare Part D prescription drug plan. You can enroll in Part D at the same time you enroll in Medicare, or later during the annual enrollment period.

What happens to my Medigap plan if I move to a different state?

Your Medigap plan may not be available in your new state, because insurance companies do not sell plans in every state. When you move, contact your insurance company to ask whether your plan is available where you are moving. If not, you may have a may provide issue right to buy a different Medigap plan in your new state without a waiting period or higher premiums based on health.

Can I switch Medigap plans after my open enrollment period?

Yes, you can switch plans at any time, but after your open enrollment period ends, the new insurance company can charge you more or deny you coverage based on your health. Switching is easier if you move to a new state, because you may have may provide issue rights there. Contact your state health insurance counselor to learn what rights explore to you.

What is the difference between Plan G and Plan N?

Plan G covers Part B coinsurance with no copayments, while Plan N covers the same costs but charges you small copayments for doctor visits and emergency room visits. Plan N has a lower monthly premium because you pay more when you use services. Plan G is usually better if you see doctors frequently; Plan N is better if you rarely need care.