Free Guide to Medicare Supplement Plan Options

Why Medigap Plans Matter: Understanding the Medicare Coverage Gap

Original Medicare—Parts A and B—covers many medical expenses, but it leaves real gaps in your out-of-pocket costs. You'll still owe deductibles, copayments, and coinsurance amounts. For example, if you need hospital care, Medicare Part A has a deductible of $1,676 per benefit period (2024). If you see a specialist and Medicare Part B covers the visit, you typically pay 20% of the approved amount after meeting your Part B deductible of $240.

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These costs add up. A hospital stay lasting 10 days could mean thousands in deductible and coinsurance. A course of radiation therapy might involve multiple specialist visits, each with its own 20% coinsurance. Over the course of a year, these payments can reach thousands of dollars, even with Medicare coverage in place.

Medigap (also called Medicare Supplement Insurance) is sold by private insurance companies. These policies are designed to pay some of the costs that Original Medicare doesn't cover. They work alongside Medicare—they don't replace it. When you see a doctor who accepts Medicare, your Medicare pays its portion first, then your Medigap plan pays its portion of the remaining bill.

The federal government standardizes Medigap plans, meaning a Plan G from one insurance company covers the same benefits as Plan G from another company. What differs is the monthly premium you pay. This standardization makes it possible to compare plans meaningfully.

Takeaway: Medigap exists to fill the holes in Original Medicare coverage. Understanding these gaps—deductibles, coinsurance, copayments—is the first step toward deciding whether a supplement plan makes sense for your situation.

The Ten Standardized Plans: What Each One Covers

The federal government has established ten standardized Medigap plans, labeled A, B, D, G, K, L, M, N, and two high-deductible versions of G and F. Each plan covers a different combination of the same basic benefits. This means you're not comparing apples to oranges—Plan G always covers the same things, whether you buy it from Company X or Company Y.

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Here's what nearly all Medigap plans cover: the Part A hospital deductible, coinsurance for hospital stays beyond 60 days, copayments or coinsurance for doctor visits covered by Part B, and blood transfusions (the first three pints). Beyond these common benefits, plans diverge.

Plan A is the most basic standardized option. It covers the core benefits listed above but doesn't cover the Part B deductible or any Part B excess charges. It's often the least expensive monthly option.

Plan B covers everything Plan A does, plus the Part B deductible ($240 in 2024). This means you pay your Part B deductible to Medicare first, then Plan B picks up covered costs from there.

Plan D was historically popular but covers fewer benefits than it once did. It covers the core benefits plus some coverage for Part B excess charges, but not the Part B deductible.

Plan G is currently one of the most popular options. It covers nearly everything except the Part B deductible. Starting January 2020, new Medicare beneficiaries became ineligible for Plan F, which is why Plan G gained prominence. If you could have enrolled in Plan F before 2020, you might still be able to carry it, but new customers generally cannot.

Plans K and L offer limited coverage, paying only a portion of covered costs. These plans have annual out-of-pocket limits ($5,560 for Plan K and $2,780 for Plan L in 2024), which means your maximum yearly cost is capped. Some people choose these to keep monthly premiums lower.

Plan M covers about 75% of most benefits, making it another option for budget-conscious shoppers.

Plan N covers most benefits but requires you to pay a copayment for some doctor visits ($20) and emergency room visits ($50, waived if admitted). It also does not cover the Part B deductible.

High-deductible Plan G and high-deductible Plan F require you to pay a large deductible ($2,940 in 2024) before the plan pays anything. After you meet that deductible, the plan covers most benefits. These exist for people who want very low monthly premiums in exchange for accepting higher upfront costs.

Takeaway: Plan G and Plan N are the most common choices today, but your best option depends on your health care patterns, budget, and how much out-of-pocket risk you're willing to carry.

Monthly Premiums Versus Out-of-Pocket Costs: The Real Trade-Off

One of the most confusing aspects of choosing a Medigap plan is understanding the relationship between what you pay monthly and what you pay when you actually use health care. A lower monthly premium doesn't always mean lower total costs over a year.

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Consider a real example. Suppose you're comparing Plan G at $180 per month versus Plan K at $90 per month. Plan G costs $2,160 per year in premiums. If you have minimal health care needs that year and don't use your insurance much, Plan G looks expensive compared to Plan K's $1,080 annual premium.

But shift the scenario slightly. You need a hospital stay, outpatient surgery, and several specialist visits. With Plan G, your covered costs largely stop at the $2,160 in premiums (except for the Part B deductible). With Plan K, you might pay the $1,080 in premiums plus significant coinsurance—potentially thousands more in a year with substantial medical needs.

The insurance industry calls this the premium-versus-deductible calculation. Plan A, Plan B, Plan D, and Plan M all have similar structures: they charge varying premiums but then cover most of what Medicare doesn't. Plans K and L are structured differently—lower premiums but higher out-of-pocket maximums.

Geographic location affects premiums dramatically. A Plan G premium might be $140 monthly in one state and $220 in another. Your age at the time you first enroll also matters. Medigap insurers can rate based on age, and federal rules allow them to vary rates based on how old you were when you first bought the plan.

Prescription drug costs don't factor into this equation because Medigap doesn't cover prescription drugs. That's handled through Medicare Part D, a separate decision entirely.

Takeaway: Estimate your likely medical costs for the coming year. If you expect significant health care needs, a higher-premium plan often saves money. If you're generally healthy with minimal health care, a lower-premium plan might work better, even if the out-of-pocket risk is higher.

When You Can Enroll and Why Timing Matters

Medigap rules establish specific windows when you can enroll without facing waiting periods or exclusions based on your health history. This is one of the most important practical details for anyone exploring these plans.

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The Open Enrollment Period is the main window. It begins on the first day of the month when you turn 65 and have Medicare Part B coverage. This period lasts for six months. During this window, you can enroll in any Medigap plan without the insurance company denying you coverage or charging more because of your health conditions. This is called "guaranteed issue" enrollment.

If you miss this six-month window, you face different rules depending on your state. Some states provide limited additional guaranteed-issue periods for specific reasons (such as if your original Medicare coverage ended). However, outside these windows, insurance companies in most states can deny you coverage, charge you more, or exclude coverage for certain conditions. Medical underwriting becomes a real factor.

The timing of your Part B enrollment matters. If you delay Part B enrollment, your Medigap open enrollment period also delays. For example, if you're still working at 65 and don't enroll in Part B until age 68, your six-month Medigap open enrollment period begins when you enroll in Part B—not when you turn 65. This has real consequences for your options years later.

Your life circumstances might create additional enrollment windows. If you had retiree health coverage through a former employer and that coverage