Medicare Supplements Fill the Gaps That Original Medicare Leaves

Medicare Supplement insurance (also called Medigap) pays for costs that Original Medicare does not cover. Original Medicare covers hospital and doctor visits, but it leaves you responsible for deductibles, copayments, and coinsurance. A Medigap plan is a contract with a private insurance company that covers some or all of those out-of-pocket costs.

Medigap is separate from Medicare Advantage, which is an alternative way to receive Medicare benefits through a private plan. With Medigap, you keep Original Medicare and add a supplement on top. You can see any doctor or hospital that accepts Medicare, and your Medigap plan pays its share of the bill.

The federal government standardizes Medigap plans so that Plan A from one company covers the same things as Plan A from another company. The price varies by insurer and by your age and location, but the coverage is identical. This makes it possible to compare plans based on cost alone.

Key Takeaways

  • Medigap plans are sold by private insurance companies and cover deductibles, copayments, and coinsurance that Original Medicare does not pay.
  • Ten standardized plans exist (A through N), and each plan covers the same benefits no matter which company sells it.
  • You must have Original Medicare Part A and Part B to buy a Medigap plan; you cannot combine Medigap with Medicare Advantage.
  • The best time to buy Medigap is during your six-month open enrollment period starting the month you turn 65 and enroll in Part B, because insurers cannot deny you or charge more based on health.
  • Monthly premiums range widely by plan, location, and insurer, so comparing quotes from multiple companies is necessary to find the lowest price.

The Ten Standardized Medigap Plans and What They Cover

The ten plans are labeled A, B, D, G, K, L, M, N, C, and F. Plan F is no longer sold to people new to Medicare, though people who had it before 2020 can keep it. Plan C is being phased out and will no longer be sold after 2024. The remaining eight plans are available now.

Plan A is the most basic and least expensive. It covers coinsurance for hospital stays and doctor visits, but not the deductible for Part B (the doctor visit part of Medicare). Plan G covers more: it pays the Part B deductible and most coinsurance, but you still pay a small copayment for some doctor visits. Plan N is similar to G but slightly cheaper because it leaves you responsible for small copayments and coinsurance amounts.

Plans D, K, and L cover different amounts of the same costs. Plan D covers skilled nursing facility coinsurance and some other costs. Plans K and L are high-deductible options: you pay a deductible out of your own pocket before the plan starts paying, but the monthly premium is lower. Plan M covers most costs but not the Part B deductible. Plan B covers the Part A deductible (hospital deductible) but not the Part B deductible.

The best plan for you depends on how much you use healthcare and how much you want to pay each month. Someone who sees doctors frequently might prefer a plan with low copayments even if the premium is higher. Someone who is healthy and rarely needs care might choose a high-deductible plan to keep the monthly cost down.

When You Can Buy Medigap and What Happens If You Wait

The six-month open enrollment period for Medigap starts the month you turn 65 and enroll in Medicare Part B. During this window, insurance companies must sell you any Medigap plan you want at the standard rate. They cannot deny you, charge you more, or exclude conditions you already have.

If you miss this window, you can still buy Medigap, but the rules change. After open enrollment ends, insurers can deny you based on your health history, charge you more because of a pre-existing condition, or exclude certain conditions from coverage. Some states have additional protections, but they vary. The safest approach is to buy during your open enrollment period.

If you have Medicare Advantage and want to switch to Original Medicare plus Medigap, you have a limited window to do so without facing medical underwriting. The rules depend on how long you have had Medicare Advantage and whether you are switching during the annual enrollment period. Contact your state health insurance counselor (through your Area Agency on Aging) to understand your specific situation.

How Much Medigap Costs and How Premiums Are Set

Medigap premiums vary by the plan you choose, the insurance company, your age, your location, and your gender (in some states). There is no single price for Plan G or any other plan. One company might charge $150 a month for Plan G in your county while another charges $200 for the same coverage.

Insurance companies use one of three methods to set premiums: community-rated (everyone in your area pays the same), issue-age-rated (your age when you buy determines your rate, which then increases slowly), or attained-age-rated (your rate increases as you get older). Attained-age-rated plans are usually cheapest at first but most expensive over time. Community-rated plans cost more upfront but do not increase with age.

The only way to know what you will actually pay is to request quotes from multiple insurers in your area. Your State Health Insurance information Program (SHIP) can help you compare plans and costs at no charge. Medicare.gov also has a plan comparison tool where you can enter your location and see available plans and their premiums.

How Medigap Works When You See a Doctor or Go to the Hospital

When you receive care, Medicare pays its share first, then your Medigap plan pays its share according to the plan you chose. You submit nothing yourself. The provider bills Medicare, Medicare sends its payment to the provider, the provider then bills your Medigap insurer, and your Medigap insurer pays what it owes. You receive a bill only if there is a cost your plan does not cover.

This process works smoothly when you see doctors and hospitals that accept Medicare. If you see a provider who does not accept Medicare, Medicare will not pay anything, and your Medigap plan will not pay either. Before seeing an out-of-network provider, confirm that they accept Medicare assignment.

You pay your Medigap premium directly to the insurance company each month, separate from your Medicare Part B premium. If you stop paying your Medigap premium, your coverage ends, but your Original Medicare continues as long as you pay your Part B premium.

Medigap Versus Medicare Advantage: The Key Difference

Medigap and Medicare Advantage are two different ways to cover costs beyond what Original Medicare pays. With Medigap, you keep Original Medicare and add a supplement. With Medicare Advantage, you replace Original Medicare with a private plan that includes hospital, doctor, and usually prescription drug coverage all in one.

Medigap gives you freedom to see any doctor or hospital that accepts Medicare. Medicare Advantage usually requires you to use doctors and hospitals in a network, though some plans cover out-of-network care at a higher cost. Medicare Advantage plans often include prescription drug coverage and dental or vision benefits, which Medigap does not.

You cannot have both Medigap and Medicare Advantage at the same time. If you have Medicare Advantage and want to switch to Medigap, you must first disenroll from Medicare Advantage and go back to Original Medicare. The timing matters because of medical underwriting rules, so speak with a counselor before making the switch.

Common Mistakes to Avoid When Buying Medigap

The biggest mistake is waiting past your open enrollment period. Once those six months end, you lose the right to buy any plan at the standard rate without medical review. If you have health conditions, you could be denied or charged much more. Mark your calendar for the month you turn 65 and enroll in Part B.

Another mistake is choosing a plan based on premium alone without considering what you actually use. A plan with a low monthly cost might have high copayments that add up if you see doctors frequently. Use your healthcare history from the past year to estimate what you will spend, then compare the total cost (premium plus expected out-of-pocket) across plans.

A third mistake is not comparing quotes from multiple insurers. The same plan can cost $50 to $100 more per month from different companies in the same area. Spending an hour getting quotes can save you hundreds of dollars per year. Your SHIP counselor can help with this at no cost.

Frequently Asked Questions

Do I need Medigap if I have Medicare Advantage?

No. Medicare Advantage includes hospital and doctor coverage, so Medigap would be redundant and is not allowed. If you have Medicare Advantage, you cannot also buy Medigap. If you want Medigap, you must first switch back to Original Medicare.

Can I switch from one Medigap plan to another?

Yes, you can switch plans at any time, but the rules depend on your health and when you switch. During the annual open enrollment period (October 15 to December 7), you can switch to any plan without medical review. Outside that window, the new insurer may review your health history and charge you more or deny you.

Does Medigap cover prescription drugs?

No. Medigap covers deductibles, copayments, and coinsurance for hospital and doctor visits, but not prescription drugs. You need a separate Part D prescription drug plan. You can buy Part D from any insurance company, and it works alongside your Medigap plan.

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

Your coverage continues, but your premium may change because rates vary by location. Contact your Medigap insurer to update your address. Some insurers may not sell your plan in your new state, in which case you would need to switch plans. Your state's SHIP can help you understand your options.

Is there a limit to how much Medigap can charge me?

No federal limit exists on Medigap premiums. However, some states have regulations on how much insurers can increase your rate each year. Check with your state insurance commissioner's office to learn what protections explore in your state.