Medicare Gap Insurance Fills the Costs That Original Medicare Leaves Behind

Medicare gap insurance — also called Medigap — pays for medical bills that Original Medicare (Part A and Part B) does not cover. Original Medicare covers a large share of hospital and doctor costs, but leaves you responsible for deductibles, copayments, and coinsurance. Gap insurance picks up those out-of-pocket costs so you are not hit with surprise bills.

The gap exists because Original Medicare pays a percentage of approved charges, not the full amount. For example, if you go to the hospital, Medicare Part A covers most of your stay but you pay a deductible ($1,600 in 2024, though this changes yearly). If you see a doctor, Part B covers 80 percent of the approved charge after you meet your annual deductible, and you pay the remaining 20 percent. Gap insurance covers those gaps — the deductibles, the 20 percent coinsurance, and other costs Medicare does not pay.

Key Takeaways

  • Gap insurance covers deductibles, coinsurance, and copayments that Original Medicare leaves you to pay, but does not cover services Medicare itself does not cover.
  • There are ten standardized gap plans (A through N), each with a different combination of covered costs and monthly premiums.
  • You can only buy gap insurance during your initial enrollment window (the six months after you turn 65 and sign up for Medicare Part B), though some states allow later enrollment.
  • Gap insurance is sold by private insurance companies, not Medicare, and premiums vary by company, age, and location.
  • If you have a Medicare Advantage plan instead of Original Medicare, you do not need gap insurance — Advantage plans have their own cost structure.

The Ten Standardized Gap Plans and What Each Covers

Medicare sets the rules for what each gap plan must cover, so Plan A from one company covers the same things as Plan A from another company. The difference is price. The ten plans are labeled A, B, D, G, K, L, M, and N (C and F were phased out in 2020 for new enrollees). Each plan covers a different set of costs.

Plan G is the most popular among new enrollees because it covers most of your out-of-pocket costs under Original Medicare — your Part B deductible, coinsurance, copayments, and excess charges (the amount a doctor can bill above Medicare's approved amount). Plan A is simpler and cheaper but covers fewer costs. Plan N covers most costs but leaves you responsible for some copayments and coinsurance. The trade-off is always the same: plans that cover more cost more per month.

You can see what each plan covers in a standardized chart on Medicare.gov, which shows side-by-side which costs each plan pays. The chart is the same regardless of which insurance company you are looking at, because the coverage rules are federal.

When You Can Buy Gap Insurance and How Enrollment Works

The best time to buy gap insurance is during your initial enrollment window, which runs for six months starting the month you turn 65 and sign up for Medicare Part B. During this window, insurance companies cannot turn you down or charge you more based on your health history — a protection called may provide issue. If you wait past this window, you may face medical underwriting, higher premiums, or outright denial.

Some states have extended protections that allow you to buy gap insurance later without medical underwriting, but the rules vary by state and by how long you have waited. If you missed your initial window, contact your state insurance commissioner's office or call 1-800-MEDICARE to learn what options exist in your state.

To buy a gap plan, you contact an insurance company directly or work with an insurance broker. You choose which plan (A through N) you want and which company to buy it from. The company will ask for your Medicare number and enrollment information. You pay the monthly premium to the insurance company, not to Medicare.

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

When you receive medical care, Medicare processes the claim first. Medicare tells the provider and you what it will pay and what you owe. Your gap insurance then receives that information and pays its share of what you owe, according to your plan's rules.

In most cases, you do not have to file a separate claim. The provider submits to Medicare, Medicare forwards the claim to your gap insurer, and your gap insurer pays the provider directly. You may see a small balance bill if the provider charges more than Medicare approves, but your gap plan covers most or all of that depending on which plan you chose.

The process is automatic once your gap plan is active. You show your Medicare card and your gap insurance card at the time of service. The billing happens behind the scenes.

What Gap Insurance Does Not Cover

Gap insurance covers only the costs that Original Medicare leaves unpaid. It does not cover services that Medicare itself does not cover — dental work, vision care, hearing aids, or long-term care are not covered by Medicare or by gap insurance. If you need those services, you would need separate insurance or pay out of pocket.

Gap insurance also does not cover prescription drugs. If you take medications, you need a separate Part D prescription drug plan. Some people buy gap insurance and Part D together; they are two separate purchases from potentially two different companies.

Additionally, gap insurance does not cover care outside the United States. If you travel internationally and need medical care, you would pay out of pocket unless you buy a separate travel insurance policy.

Gap Insurance Costs and How Premiums Are Set

Gap insurance premiums vary widely depending on which plan you choose, which company sells it, your age, and where you live. Plan A is typically the cheapest, sometimes $20 to $40 per month. Plan G, which covers more, often costs $80 to $150 per month or more, depending on your age and location. Premiums also increase as you age.

Insurance companies use one of three methods to set premiums: community-rated (everyone in your state pays the same), age-rated (premiums increase as you age), or issue-age-rated (your premium is based on your age when you buy the plan and stays the same as you age). The method varies by company and state, so two companies selling the same plan in the same state may charge different prices.

You can compare plans and prices by visiting Medicare.gov's plan finder or by calling 1-800-MEDICARE. Many insurance brokers also compare plans for free. Because premiums change yearly, it is worth shopping every year to see if a different company or plan would save you money.

Gap Insurance Versus Medicare Advantage: Which Path You Choose

You cannot have both gap insurance and a Medicare Advantage plan. When you enroll in Medicare, you choose either Original Medicare (Part A and Part B) with optional gap insurance and Part D, or you choose a Medicare Advantage plan (Part C), which replaces Original Medicare.

Medicare Advantage plans are sold by private insurance companies and include hospital and doctor coverage in one plan, usually with a network of providers. They often include prescription drug coverage and sometimes dental or vision. You do not need gap insurance with Advantage because the plan's cost structure (copayments, coinsurance, deductibles) is built in. However, Advantage plans typically have networks, prior authorization requirements, and annual out-of-pocket limits that Original Medicare with gap insurance does not.

The choice between Original Medicare with gap insurance and Medicare Advantage depends on your health, your doctors, your prescriptions, and your budget. There is no single right answer — it depends on your situation.

Frequently Asked Questions

Can I switch gap plans or insurance companies once I have bought a plan?

Yes. You can switch to a different plan or company during the annual open enrollment period (October 15 to December 7) or if you move to a new state. If you switch during open enrollment, the new plan starts January 1. Some states also allow switching outside open enrollment if you meet certain conditions, so check with your state insurance commissioner's office.

What happens to my gap insurance if I move to a different state?

Your gap plan ends when you move. You must buy a new plan in your new state because insurance is regulated by state, and plans sold in one state may not be available in another. Contact an insurance company or broker in your new state to buy a plan. You may face medical underwriting depending on your new state's rules and how long you have been enrolled in Medicare.

Does gap insurance cover the Part B excess charge?

It depends on which plan you choose. Some plans (like Plan G) cover excess charges — the amount a doctor can bill above what Medicare approves. Other plans (like Plan A) do not. Check your plan's coverage chart to see whether excess charges are included.

Can I have gap insurance and Part D at the same time?

Yes. Gap insurance and Part D are separate. Gap insurance covers the medical costs Medicare leaves unpaid. Part D covers prescription drugs. You can buy both, and most people do if they take medications regularly. You enroll in Part D separately, usually through the same Medicare.gov plan finder where you compare gap plans.

What if I do not buy gap insurance during my initial enrollment window?

You can still buy gap insurance after your window closes, but you may face higher premiums or medical underwriting, and some companies may deny you based on your health. Some states have protections that allow you to buy gap insurance later without medical underwriting, but the rules vary. Call 1-800-MEDICARE or your state insurance commissioner's office to learn what options are available in your state.