What Medicare Supplement Insurance Does

Medicare Supplement insurance, also called Medigap, pays some of the costs that Original Medicare (Parts A and B) does not cover. Original Medicare leaves you responsible for deductibles, copayments, and coinsurance — the percentage of a bill you pay after Medicare pays its share. A Medigap policy picks up some or all of those costs, depending on which plan you choose.

You buy Medigap from a private insurance company, not from Medicare. The federal government sets what each plan must cover, but the insurance company sets the price. This means the same plan letter (like Plan G) covers the same benefits no matter which company sells it to you, but the monthly premium varies by insurer and by where you live.

Medigap does not cover prescription drugs, dental, vision, hearing aids, or long-term care. If you need those, you would buy them separately or through a different type of Medicare plan.

Key Takeaways

  • Medigap covers deductibles and copayments that Original Medicare leaves you to pay, but you must be enrolled in Medicare Parts A and B first.
  • You have a six-month window starting the month you turn 65 and enroll in Part B to buy Medigap without the insurance company asking about your health history.
  • The same plan letter costs different amounts from different insurers, so comparing quotes from at least three companies can save you hundreds of dollars per year.
  • If you miss the open enrollment window, you may face higher premiums or be denied coverage if you have health conditions, depending on your state.
  • Medigap is one choice; Medicare Advantage (Part C) is another way to get coverage beyond Original Medicare, and you cannot have both at the same time.

When You Might Need Medigap

You need Medigap if you are on Original Medicare and cannot afford the out-of-pocket costs. In 2024, Original Medicare Part A has a deductible of $1,632 per hospital stay, and Part B has a deductible of $240 per year. After you meet the deductible, you pay 20 percent coinsurance on most services. For someone with frequent doctor visits, hospital stays, or specialist care, those costs add up quickly.

Medigap makes sense if you have a steady income and want predictable medical costs. You pay a monthly premium, and then most of your covered services cost you little or nothing at the point of care. This is different from Medicare Advantage, which typically has lower or no monthly premiums but uses networks and requires referrals.

You do not need Medigap if you are on Medicare Advantage instead of Original Medicare — Advantage plans include their own out-of-pocket limits and do not work with Medigap. You also do not need Medigap if you are on Medicaid (the state program for low-income people), because Medicaid covers many of the costs Medigap would.

The Open Enrollment Window and When to Buy

The best time to buy Medigap is during your Initial Enrollment Period, which is six months long and 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 conditions you already have. This is called may provide issue.

If you miss this window, you enter what is called the general enrollment period. At that point, insurance companies can ask about your health history, deny you coverage, or charge you a higher premium. Some states have additional protections that let you buy Medigap without health questions even after your window closes, but this varies by state and by which plan you want.

The safest approach is to buy during your six-month window. If you are still working at 65 and have employer health coverage, you may have a different timeline — ask your employer's benefits office or call Medicare at 1-800-MEDICARE to confirm when your window starts.

How to Compare Plans and Find the Right One

There are ten standardized Medigap plans, labeled A through N. Plan G and Plan N are the most common for people newly turning 65. Plan G covers almost everything Original Medicare does not, except it does not cover the Part B deductible. Plan N covers most things but leaves you paying some copayments and coinsurance for certain services.

The plan letter tells you what is covered; the insurance company does not change that. What changes is the price. Get quotes from at least three insurers for the same plan letter. You can call insurers directly, use Medicare's Plan Finder tool at Medicare.gov, or work with a licensed insurance agent who represents multiple companies. An agent does not charge you — the insurance company pays them a commission.

Compare the monthly premium, any annual deductible the plan has, and whether the company has a good reputation for paying claims and customer service. The lowest price is not always the best deal if the company has poor reviews or a history of claim denials.

What Medigap Costs and How Premiums Work

Medigap premiums vary widely by plan, by insurer, by your age, and by where you live. In some states, premiums are based on your age when you buy (called issue-age rating), so buying at 65 locks in a lower rate than buying at 75. In other states, premiums are based on your current age (called attained-age rating), so your premium rises as you get older. A few states use community rating, where everyone pays the same price regardless of age.

Plan G might cost $100 to $200 per month in a rural area and $150 to $300 per month in a city, depending on the state and the insurer. Plan N is usually cheaper — sometimes $50 to $100 per month less — but you pay more out of pocket when you use services. There is no single "right" answer; it depends on how much medical care you expect to use.

Once you buy a Medigap policy, the insurance company can raise your premium, but only if they raise it for everyone in your state with that plan. They cannot single you out because your health got worse.

Medigap Versus Medicare Advantage: The Key Differences

Medicare Advantage (Part C) is an alternative to Original Medicare plus Medigap. With Advantage, you get Part A and Part B coverage through a private insurance company, usually with a lower or zero monthly premium. But Advantage plans use networks, require referrals for specialists, and have annual out-of-pocket limits (capped at $8,050 in 2024, though this changes yearly).

Medigap with Original Medicare has no network restrictions — you can see any doctor who accepts Medicare anywhere in the country. You do not need referrals. But you pay a monthly Medigap premium on top of your Part B premium, and you are responsible for deductibles and coinsurance until Medigap kicks in.

You cannot have both Medigap and Medicare Advantage at the same time. If you have Medigap and want to switch to Advantage, you can do so during the annual open enrollment period (October 15 to December 7). If you have Advantage and want to switch to Original Medicare with Medigap, you have a one-time window to buy Medigap without health questions — ask Medicare about your specific situation.

What Happens If You Do Not Buy Medigap

If you are on Original Medicare and do not buy Medigap, you are responsible for all deductibles, copayments, and coinsurance. A single hospital stay can cost thousands of dollars out of pocket. A serious illness requiring multiple specialist visits, imaging, and procedures can quickly reach your annual out-of-pocket maximum — which Original Medicare does not have.

Some people choose not to buy Medigap because they are healthy and rarely see doctors, or because the monthly premium feels too high. That is a personal choice, but it means accepting the financial risk that a major health event could be expensive. Others buy Medigap later if their health changes, but they may face higher premiums or denial of coverage if they miss their enrollment window.

If your income is very low, you may be on both Medicare and Medicaid. Medicaid covers some of the costs Medigap would, so you may not need Medigap. Contact your state Medicaid office to understand what you are covered for.

Questions to Ask Your Doctor or Medicare

Before you decide whether to buy Medigap, think about your health and your medical needs. Ask yourself: Do I see specialists regularly? Do I have chronic conditions that require frequent visits or imaging? Am I comfortable with the risk of a large medical bill if something unexpected happens?

If you are unsure, call Medicare at 1-800-MEDICARE and ask to speak with a counselor. They can explain your options and answer questions about timing and enrollment. You can also contact your State Health Insurance information Program (SHIP), which offers free counseling about Medicare choices. Find your state's SHIP at shiptalk.org.

Frequently Asked Questions

Can I buy Medigap after I turn 65 if I did not buy it right away?

Yes, but it may be more expensive or harder to get. If you buy within six months of enrolling in Part B, you have may provide issue — the company cannot deny you or charge more for health conditions. After that, the company can ask about your health and may deny coverage or charge a higher premium, depending on your state.

Does Medigap cover prescription drugs?

No. Medigap covers deductibles and copayments for doctor visits and hospital care, but not prescription drugs. You need to enroll in Medicare Part D (a separate prescription drug plan) if you want that coverage. Part D has its own enrollment window and open enrollment period.

What if I switch insurance companies?

You can switch Medigap insurers at any time, but the new company can ask about your health if you are outside your initial six-month enrollment window. Some states have protections that let you switch without health questions, but this varies. Before you switch, get quotes and make sure the new plan covers the same benefits.

Do I need Medigap if I am still working and have employer health insurance?

Not necessarily. If your employer plan is still active, it may cover costs that Medigap would. But when you retire and lose that coverage, you will have a limited window to buy Medigap without health questions. Talk to your employer's benefits office about your timeline and options.

What is the difference between Plan G and Plan N?

Plan G covers the Part B deductible ($240 in 2024); Plan N does not. Plan N also leaves you paying copayments for some doctor visits and emergency room visits. Plan N is usually cheaper per month, but you pay more when you use services. Choose based on how often you see doctors and whether the monthly savings are worth the higher out-of-pocket costs.