Original Medicare—Part A (hospital insurance) and Part B (medical insurance)—covers many healthcare costs, but it doesn't cover everything. Out-of-pocket expenses like deductibles, copayments, and coinsurance can add up quickly, especially for those managing chronic conditions or unexpected health events.
That's where Medicare Supplement insurance comes in. Also known as Medigap, these private insurance policies are designed to help cover some of the healthcare costs that Original Medicare doesn't pay.
What Is Medicare Supplement Insurance?
Medicare Supplement insurance is sold by private insurance companies to help pay for out-of-pocket costs not covered by Original Medicare. These policies work alongside your Medicare Part A and Part B coverage—they don't replace it.
Medigap policies are standardized in most states, meaning each plan type (identified by letters like Plan G, Plan N, etc.) offers the same basic benefits regardless of which insurance company sells it. The main differences between companies are price, customer service, and reputation.
What Medigap Plans Cover
Different Medigap plans cover different combinations of benefits. Here are some of the costs that various plans may help cover:
- Part A coinsurance and hospital costs — After Medicare pays its share, Medigap can cover additional days in the hospital
- Part B coinsurance or copayment — The 20% of approved medical costs that Medicare doesn't cover
- Blood transfusions — The first three pints of blood needed for a medical procedure
- Part A hospice care coinsurance — Costs associated with end-of-life care
- Skilled nursing facility care coinsurance — Costs for care in a skilled nursing facility after a hospital stay
- Part A deductible — The amount you pay before Medicare starts covering hospital costs
- Part B deductible — The annual deductible before Medicare covers outpatient services (only some plans)
- Part B excess charges — Amounts above what Medicare approves for services (only some plans)
- Foreign travel emergency care — Medical care needed during travel outside the U.S. (only some plans)
The Most Popular Medigap Plans
While there are several standardized Medigap plans available, a few tend to be most popular among beneficiaries:
Plan G
Plan G has become one of the most comprehensive options available. It covers all the gaps in Original Medicare except for the Part B deductible. For many people, the predictable costs and comprehensive coverage make Plan G an attractive choice.
Plan N
Plan N offers slightly less coverage than Plan G but typically comes with lower premiums. With Plan N, you may pay some copayments for certain office visits and emergency room visits, but overall out-of-pocket costs remain manageable.
Plan F (For Those Eligible Before 2020)
If you became eligible for Medicare before January 1, 2020, you may still be able to purchase Plan F, which covers all gaps including the Part B deductible. However, this plan is no longer available to those who became eligible after that date.
When to Enroll in Medigap
The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This is a six-month period that starts the month you're 65 or older AND enrolled in Medicare Part B.
During this window, insurance companies cannot:
- Deny you coverage
- Charge you more because of health conditions
- Make you wait for coverage to start
If you apply for Medigap coverage outside of this period, insurance companies may use medical underwriting to decide whether to accept your application and how much to charge you.
What Medigap Doesn't Cover
It's important to understand that Medigap policies have limitations. They typically don't cover:
- Prescription drugs — You'll need a separate Medicare Part D plan for medication coverage
- Long-term care — Extended nursing home stays or in-home care assistance
- Vision or dental care — Routine eye exams, glasses, or dental work
- Hearing aids — Devices and fitting services
- Private-duty nursing — One-on-one nursing care at home
Medigap vs. Medicare Advantage
Some people confuse Medigap with Medicare Advantage (Part C), but they work very differently:
Medigap supplements Original Medicare. You keep your Medicare Parts A and B, and the Medigap policy helps pay your share of covered costs. You can see any provider that accepts Medicare.
Medicare Advantage replaces Original Medicare. These are all-in-one plans offered by private insurers that include Part A, Part B, and usually Part D coverage. They often have networks of providers and may include extra benefits like dental and vision.
You cannot have both a Medigap policy and a Medicare Advantage plan at the same time.
How to Choose the Right Plan
Selecting the right Medigap plan depends on several factors:
- Assess your healthcare needs — Consider how often you see doctors, any ongoing treatments, and medications you take
- Compare plan benefits — Review what each plan covers and match it to your needs
- Consider your budget — Balance monthly premiums against potential out-of-pocket costs
- Research insurance companies — Look at customer reviews, financial stability ratings, and customer service reputation
- Think about the future — Your health needs may change; consider how flexible each plan is
Questions to Ask Before Enrolling
Before purchasing a Medigap policy, consider asking these questions:
- What is the monthly premium, and how has it changed over the past few years?
- Does the company offer any discounts (household, non-smoker, payment method)?
- How does the company handle rate increases?
- What is the company's claims process and customer service availability?
- Are there any waiting periods for pre-existing conditions (if applying outside Open Enrollment)?
Making an Informed Decision
Medicare Supplement insurance can provide valuable financial protection and peace of mind by helping to cover costs that Original Medicare leaves behind. The right plan for you depends on your individual health needs, budget, and preferences.
Taking time to understand your options, compare plans, and consider your healthcare needs will help you make an informed decision about your Medicare coverage. Consider speaking with a licensed insurance agent who specializes in Medicare to discuss your specific situation and options.
