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Original Medicare Part A covers hospital stays, and Part B covers doctor visits and outpatient care. Neither, however, is designed to pay every bill in full. That is why Medicare supplement plans, commonly called Medigap, are so popular. These private policies sit on top of Medicare and cover many of the deductibles, coinsurance amounts, and copays that Original Medicare leaves behind.
The catch is that you buy a standalone policy from a private insurer and pay a monthly premium, usually in addition to your Part B premium. The benefit is simple: far less financial surprise when you use the healthcare system.
What Exactly Is a Medicare Supplement Plan?
A Medicare supplement plan is a private health insurance product designed specifically to fill the gaps in Original Medicare. The cost gaps include the Part A hospital deductible, the 20% coinsurance you owe on most Part B procedures, and the coinsurance that begins after you spend more than 60 days in the hospital.
Because every Medigap policy needs to address the same set of gaps, the federal government standardized them in most states. You’ll see lettered options such as A, B, C, D, F, G, K, L, M, and N. If you compare Plan G from one insurer with Plan G from another, the benefits are identical by law. Only the price and the company behind the policy will differ.
One important change for new enrollees: since January 1, 2020, Plans C and F are no longer sold to people who become newly eligible for Medicare. Those plans cover the Part B deductible, a feature regulators worried could promote needless doctor visits. If you already had one of them before that cutoff, you can keep it. Otherwise, most new buyers land on Plan G or Plan N.
If the terms feel like alphabet soup, our plain-English guide to health insurance plans is a good starting point for understanding deductibles, copays, and coinsurance.
What Do Medicare Supplement Plans Cover?
Every standardized plan includes a core set of benefits:
- Medicare Part A coinsurance and hospital costs for up to 365 additional days after Medicare benefits end
- Part B coinsurance or copayments
- The first three pints of blood you receive in a medical procedure
- Part A hospice care coinsurance
Some plans add the skilled nursing facility coinsurance, the Part A deductible, coverage for Part B excess charges, and emergency care when you travel outside the United States. Plans K and L also include an out-of-pocket limit, which gives you a spending cap in exchange for a lower monthly premium. Plans M and N split the coverage differently: M pays only a portion of the Part A deductible, while N requires small copays for office visits and emergency room trips.
Why Plan G Has Become the Standard
Plan G covers all of the hospital and doctor coinsurance, the skilled nursing facility coinsurance, excess charges, and foreign travel emergency care. Its one glaring omission is the Part B deductible, which currently runs a few hundred dollars a year. For most healthy 65-year-olds, that trade-off is easy to accept. Once you meet that deductible, the plan absorbs nearly every allowable charge for the rest of the year.
How Much Do Medigap Policies Cost?
Premiums vary more than the benefits do. A 65-year-old in one Cincinnati ZIP code might pay $145 a month for Plan G, while someone across the river in Kentucky pays $210 for the same letter plan. That’s because insurers price on age, gender, ZIP code, tobacco use, and how they choose to rate policies.
- Community-rated: everyone in the plan pays the same premium, no matter their age.
- Issue-age-rated: your premium is locked when you sign up, so it doesn’t jump simply because you get older.
- Attained-age-rated: your premium climbs as you age, which can become painful in your late 70s or 80s.
Some companies lure new customers with a low first-year premium, then raise rates substantially in years two through five. Others keep increases closer to 5% or 6% annually. Ask every carrier you talk to for five years of rate history.
The Medigap Enrollment Window Is Your Best Friend
Your one-time Medigap open enrollment period starts the first month you are 65 or older and signed up for Medicare Part B. It lasts six months. During this window, insurance companies cannot deny you coverage, exclude pre-existing conditions, or charge you a higher premium because of your health history.
Miss that window and you’ll face medical underwriting. High blood pressure, type 2 diabetes, a previous heart attack, or a recent surgery can all trigger a denial or a much steeper premium. People who receive Medicare due to a disability under age 65 get their own six-month window when they turn 65, not when they first enroll in Medicare.
There are exceptions. Losing employer coverage, dropping a Medicare Advantage plan in your first year, or moving away from a plan’s service area can trigger guaranteed issue rights. Those special enrollment periods let you buy a supplement without answering health questions.
Medicare Supplement vs. Medicare Advantage
A Medigap policy is not a replacement for Original Medicare. It wraps around Parts A and B and pays much of your cost sharing. A Medicare Advantage plan, on the other hand, completely replaces Original Medicare with a private HMO or PPO. You get your Parts A and B benefits through that plan, often with Part D drug coverage built in.
Supplement plans let you see any doctor who accepts Medicare anywhere in the country. No network, no referrals, no pre-authorization for most care. Advantage plans often come with lower upfront costs but narrower networks and more pre-approval requirements. If you need help deciding which path fits your lifestyle, this detailed comparison of Medicare Advantage plans makes the trade-offs easier to see.
One thing Medigap does not cover is prescription drugs. You will need to sign up for a separate Part D plan, which typically costs $30 to $60 a month depending on your medications.
Which Medigap Plan Should You Choose?
For a healthy 65-year-old, Plan N is the value pick. Its premium runs about 25% lower than Plan G. In exchange, you pay up to $20 when you visit a primary care doctor and up to $50 for an emergency room visit that does not lead to admission. Plan N does not cover Part B excess charges, so it works best if you choose doctors who accept Medicare assignment.
Plan G is the peace-of-mind option. The monthly premium is typically $30 to $60 higher than Plan N, but it eliminates nearly all billable surprises. If you travel often, see several specialists, or simply want to hand your card at the desk and move on with your life, Plan G is the right choice.
Plans A and B are cheaper, but they leave you more exposed on the Part A deductible and some other cost sharing. Plan K and L are even more budget-friendly if you are healthy and seldom need care, but you’ll pay a percentage of coinsurance until you hit their out-of-pocket cap.
How to Compare Carriers and Avoid Overpaying
Because the coverage for a specific letter plan is identical across companies, comparison shopping matters more than brand loyalty. Look beyond the monthly premium and check the company’s financial strength rating and rate-increase history. A broker can often quote six different carriers in one afternoon, which makes it easy to see the spread.
Ask about household discounts, too. Many insurers knock 7% to 10% off your premium if a spouse buys a policy from the same company. Paying annually instead of monthly can also unlock a small discount.
If you want to compare large carriers, our Aetna Medicare breakdown covers plan choices and pricing at that insurer. The same goes for the BlueCross BlueShield system, which is a network of local independent plans rather than a single national one. A few hours of research today can save you hundreds of dollars a year and keep your future medical bills predictable.
