Whether you need supplemental insurance depends on your out-of-pocket costs under Original Medicare

Original Medicare covers a lot, but it does not cover everything. You pay a deductible before Medicare starts paying, you pay a percentage of costs after that, and some services are not covered at all. Supplemental insurance (also called Medigap) picks up some or all of those costs — but only if you buy it. It is not automatic, and you do not have it unless you choose it.

Whether you need it is a money question: Can you afford the gaps in Original Medicare, or would the premiums for supplemental insurance cost less than what you would pay out of pocket? The answer depends on your health, how much you use medical services, and what you can afford to pay when you need care.

Key Takeaways

  • Original Medicare leaves you responsible for deductibles, coinsurance, and copayments that can add up to thousands of dollars a year.
  • Supplemental insurance premiums vary by age, location, and plan type, and you must buy it during your initial enrollment window or face higher premiums later.
  • If you have a Medicare Advantage plan instead of Original Medicare, you cannot buy Medigap — you would need a different type of coverage.
  • People with chronic conditions or frequent medical needs often save money with supplemental insurance; people who rarely see doctors may not.
  • You can compare specific plans and costs using the official Medicare Plan Finder tool at Medicare.gov.

What costs Original Medicare leaves you to pay

Under Original Medicare, you pay the first $1,676 of hospital costs in 2024 before Medicare pays anything — that is the Part A deductible. After that, you pay coinsurance (a percentage of the bill) for hospital stays longer than 60 days. For doctor visits and outpatient services covered by Part B, you pay a $240 deductible in 2024, then 20 percent of the cost after that.

Those percentages add up fast. If you have surgery, imaging, or ongoing treatment, 20 percent of the bill can be hundreds or thousands of dollars. Prescription drugs under Part D have their own deductible and cost-sharing. And Original Medicare does not cover dental, vision, hearing aids, or long-term care — you pay all of that yourself.

Supplemental insurance is designed to cover those gaps. Different Medigap plans cover different combinations of costs. Plan G, for example, covers the Part B deductible and the 20 percent coinsurance you would otherwise owe. Plan N covers most of the same things but leaves you responsible for small copayments at the doctor's office. The trade-off is always the same: higher premiums mean lower out-of-pocket costs when you need care.

How much supplemental insurance costs and who can buy it

Medigap premiums vary by plan type, your age, where you live, and the insurance company. A 65-year-old in one state might pay $120 a month for Plan G, while someone the same age in another state pays $180. Premiums also rise as you get older — a plan that costs $150 at 65 might cost $250 at 75.

You can buy Medigap during your initial enrollment period, which is the six months starting the month you turn 65 and enroll in Medicare Part B. During this window, insurance companies cannot deny you coverage or charge you more based on your health. If you miss this window, you can still buy Medigap later, but companies can refuse to sell it to you or charge you significantly higher premiums if you have pre-existing conditions.

You must have Original Medicare (both Part A and Part B) to buy Medigap. If you chose a Medicare Advantage plan instead, you cannot buy supplemental insurance — Medicare Advantage plans include their own out-of-pocket limits and different cost-sharing rules.

When supplemental insurance saves you money

Supplemental insurance makes financial sense if your expected out-of-pocket costs under Original Medicare would exceed what you pay in premiums. Someone with diabetes, heart disease, or cancer who sees specialists regularly, takes multiple medications, and has imaging or lab work done often will likely spend thousands a year on coinsurance and deductibles. For that person, a Medigap premium of $150 to $200 a month is usually a good trade.

Someone who is healthy, rarely sees a doctor, takes no medications, and has no chronic conditions might pay only a few hundred dollars a year in out-of-pocket costs. For that person, paying $1,500 to $2,400 a year in Medigap premiums might not make sense — they would be better off keeping the premium money and paying costs as they come up.

The calculation also depends on your financial situation. If you have savings and can absorb a $3,000 hospital deductible without stress, you might choose not to buy Medigap. If you live on a fixed income and cannot afford unexpected medical bills, supplemental insurance gives you predictability and protection.

The difference between Medigap and Medicare Advantage

If you have Original Medicare and buy Medigap, you keep your Medicare coverage and add supplemental insurance on top. You can see any doctor or hospital that accepts Medicare, and Medigap covers the costs Medicare does not.

If you chose a Medicare Advantage plan (Part C) instead of Original Medicare, you cannot buy Medigap. Medicare Advantage plans are run by private insurance companies and include their own networks, deductibles, and out-of-pocket limits. They often include dental, vision, or hearing coverage that Original Medicare does not. But they also limit which doctors you can see and may require referrals.

The choice between Original Medicare plus Medigap and Medicare Advantage is separate from the choice of whether to buy supplemental insurance. If you have Original Medicare, you decide whether to add Medigap. If you have Medicare Advantage, that decision is already made — you have a different type of coverage with different rules.

How to compare plans and find current costs

The official Medicare Plan Finder at Medicare.gov lets you enter your zip code and see which Medigap plans are available in your area, what each one covers, and what the premiums are. You can compare Plan G to Plan N, for example, and see the exact monthly cost difference and what each plan does and does not cover.

You can also contact insurance companies directly or work with a licensed insurance agent who specializes in Medicare. Agents do not charge you — they are paid by the insurance company — but make sure they are licensed and not pushing one company's plans over others.

When you compare, look at the plan type (G, N, F, and others each cover different things), the monthly premium, and what you would still owe out of pocket for the services you actually use. If you take a specific medication or see a specialist regularly, factor in what you would pay for that under each plan.

When you can enroll and what happens if you miss the window

Your best opportunity to buy Medigap is during the six-month initial enrollment period that starts the month you turn 65 and enroll in Medicare Part B. During this window, you have what is called may provide issue rights — insurance companies must sell you any Medigap plan they offer, and they cannot charge you more or exclude coverage based on your health history.

If you enroll in Medicare Part B before you turn 65 (because you are still working and have employer coverage, for example), your initial enrollment period starts when you actually enroll in Part B, not when you turn 65.

If you miss this window, you can still buy Medigap, but the rules change. Insurance companies can deny you coverage, charge you higher premiums, or exclude certain conditions from coverage. Some states have limited protections that allow you to buy Medigap later under certain circumstances — for example, if you had Medicare Advantage and are switching back to Original Medicare. Check with your state insurance commissioner's office or Medicare.gov to learn what protections explore where you live.

Frequently Asked Questions

Can I buy Medigap if I already have a Medicare Advantage plan?

No. Medigap only works with Original Medicare. If you have Medicare Advantage, you would need to switch back to Original Medicare first, and you can only do that during the annual open enrollment period (October 15 to December 7). Once you switch, you may be able to buy Medigap, depending on your state's rules and whether you may have access to for may provide issue rights.

Does Medigap cover prescription drugs?

No. Medigap covers the gaps in Original Medicare's hospital and doctor costs, but not prescription drugs. You need a separate Part D plan for that. You can have both Medigap and Part D at the same time.

What if I am still working and have employer health insurance?

If your employer plan is primary and covers your medical costs, you may not need Medigap right away. But when you do enroll in Medicare, you have a limited time to buy Medigap without penalties. Talk to your employer's benefits office about when your coverage ends and when you should enroll in Medicare to protect your Medigap rights.

Can my Medigap premium go up after I buy it?

Yes. Insurance companies can raise premiums over time, though the reasons and frequency vary by company and state. Some states regulate how much premiums can increase. When you compare plans, ask the insurance company about their history of rate increases.

Is there a Medigap plan that covers everything?

No plan covers everything. Plan G covers the most — it pays the Part B deductible and most coinsurance — but you still pay for things Original Medicare does not cover, like dental, vision, and hearing. Plan F used to cover the Part B deductible, but it is no longer available to people newly enrolled in Medicare after 2020.