Get Your Free Guide to Medigap Plans

What Medigap Plans Are and How They Work

Medigap, also called Supplemental Insurance, is a type of insurance policy sold by private insurance companies. It works alongside Original Medicare (Parts A and B) to help cover costs that Medicare doesn't pay. Original Medicare covers a significant portion of hospital and medical expenses, but it leaves gaps in coverage—patients must pay deductibles, copayments, and coinsurance amounts. Medigap plans fill in some or all of these gaps, depending on which plan you choose.

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The way Medigap works is straightforward: you keep your Original Medicare coverage and pay a monthly premium to a private insurance company for the Medigap policy. When you receive medical care, Medicare pays its share first, and then your Medigap plan covers its share of the remaining costs you owe. This dual-coverage system means you're working with two insurers—Medicare (the federal program) and the private company that sold you the Medigap plan.

It's important to understand what Medigap does not cover. These plans do not cover prescription drugs, long-term care, dental services, vision care, or hearing aids. If you need prescription drug coverage, you would need to enroll in a separate Medicare Part D plan. If you want coverage for dental or vision services, you would need to purchase those separately or explore original Medicare Advantage plans, which are a different option entirely from Medigap.

According to the Centers for Medicare and Medicaid Services (CMS), approximately 9.2 million beneficiaries were enrolled in Medigap plans as of 2023. This makes Medigap one of the most common ways Medicare beneficiaries supplement their coverage. The plans have been available since 1992 and are standardized by the federal government, which means that Plan G offered by Company A covers the same benefits as Plan G offered by Company B—the only difference is the price.

Takeaway: Medigap plans are standardized private insurance policies that work with Original Medicare to reduce your out-of-pocket costs. Understanding this basic structure helps you determine whether Medigap might be a good fit for your healthcare needs.

The Ten Standardized Medigap Plans Explained

The federal government has standardized Medigap plans into ten different options, labeled A through N. Each plan covers a different combination of benefits, so understanding what each one includes is essential to making an informed choice. This standardization means you can compare plans based on coverage rather than trying to figure out different names and features from different insurance companies.

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Plans A and B are considered the most basic options. Plan A covers Medicare coinsurance and copayments for hospital and medical services, blood transfusions, and part of the cost of skilled nursing facility care. Plan B covers the same benefits as Plan A plus Medicare Part A deductible. Plan C was historically popular because it covered Medicare Part B deductible, but as of January 1, 2020, new beneficiaries can no longer purchase Plan C; existing enrollees can keep their coverage.

Plan D is similar to Plan C but does not cover the Medicare Part B deductible. Plan F was once the most comprehensive option available, covering all Medicare deductibles and copayments, but like Plan C, new beneficiaries cannot purchase Plan F as of January 1, 2020. Plan G is now considered the most comprehensive option available to new beneficiaries, covering nearly all Medicare costs except the Part B deductible, which is $240 in 2024.

Plans K, L, M, and N are lower-cost options that cover fewer benefits but have lower monthly premiums. Plan K covers 50% of most Medicare costs, Plan L covers 75%, and Plan M covers 100% of most costs but only 50% of the Part B deductible. Plan N covers most benefits but requires you to pay small copayments for office visits and emergency room visits, and it does not cover the Medicare Part B deductible.

The guide explains the coverage details for all ten plans in chart format, allowing you to see side-by-side which plan covers which services. This makes it easier to compare your options without having to read lengthy descriptions. The charts include information about deductible coverage, copayment and coinsurance coverage, skilled nursing facility costs, foreign travel emergency care, and excess charges for those living in areas where Medicare does not set fees.

Takeaway: Each of the ten Medigap plans offers different levels of coverage at different price points. Plan G is the most comprehensive option for new enrollees, while Plans K, L, M, and N offer lower-cost alternatives with higher out-of-pocket expenses.

When You Can Purchase Medigap Coverage

The timing of when you purchase a Medigap plan matters because it affects your premiums and your coverage options. The guide explains the Medigap Open Enrollment Period, which is a six-month window that begins on the first day of the month you turn 65 and are enrolled in Medicare Part B. During this period, insurance companies must sell you a Medigap plan at the standard price, regardless of any health conditions you may have. This period is called "guaranteed issue" protection because insurers cannot deny you coverage or charge you more based on your health status.

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If you miss your Open Enrollment Period, you can still purchase a Medigap plan, but insurance companies may charge you higher premiums through "medical underwriting," meaning they can review your health history and increase your rates accordingly. Some states have additional protected enrollment periods. For example, if you were covered under an employer health plan when you turned 65 and did not enroll in Medicare, you may have a special enrollment period when that employer coverage ends. The specific rules vary by state, so the guide directs you to your state insurance commissioner's office for details about your particular situation.

There are also circumstances where insurance companies must sell you a Medigap plan outside the Open Enrollment Period. If you were enrolled in a Medigap plan and your insurer stops selling that particular plan in your state, the company must offer you another plan. If you were enrolled in Medicare Advantage and disenroll during the January through February Medicare Advantage Open Enrollment Period, you have the right to purchase a Medigap plan. These situations are explained in detail in the guide with examples of how the rules apply to different scenarios.

The guide includes a section on how premiums are calculated. Insurance companies use three methods to set Medigap rates: attained age pricing (premiums increase as you get older), issue age pricing (based on your age when you purchased the plan), and community rating (everyone pays the same regardless of age). Your state determines which rating methods insurers can use, and the guide explains how to find out which method applies in your state.

Takeaway: Enrollment timing is crucial—you have the most favorable rates and guaranteed coverage acceptance during your six-month Open Enrollment Period starting when you turn 65 and enroll in Part B. Missing this window can result in higher premiums and potential denials based on health status.

Cost Comparison and Budget Considerations

Medigap premiums vary significantly based on the plan you choose, your age, your location, and the insurance company. The guide provides information about how to estimate costs and what factors influence pricing. As of 2024, Plan A premiums range from approximately $150 to $300 monthly, while Plan G premiums typically range from $200 to $400 monthly, depending on where you live and which company offers the coverage. These are national ranges, and your actual premium may fall outside this range depending on your specific circumstances.

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To understand your total healthcare costs with Medigap, you need to consider both the monthly premium and your out-of-pocket costs. For example, if you choose Plan A with a $200 monthly premium, you'll pay $2,400 per year in premiums, but you'll also be responsible for the Medicare Part B deductible ($240 in 2024) and other copayments and coinsurance amounts. With Plan G, you might pay $3,600 per year in premiums but have lower out-of-pocket costs during actual healthcare visits. The guide includes worksheets to help you calculate your estimated total costs based on your anticipated healthcare usage.

Different plans make sense for different situations. If you're generally healthy and rarely visit doctors, a lower-cost plan like Plan A or Plan K might be appropriate. If you have chronic conditions and frequent medical appointments, a more comprehensive plan like Plan G might result in lower total out-of-pocket