Learn About Medigap Coverage Options

What Medigap Insurance Is and How It Works

Medigap, also called Medigap insurance, is a type of private insurance sold by insurance companies to help cover some of the costs that Original Medicare does not pay. Original Medicare — the federal health insurance program for people age 65 and older — covers many medical services, but it does not cover everything. It leaves gaps in coverage, which is why Medigap exists.

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When you use Original Medicare, you typically pay three types of costs: premiums (monthly payments), deductibles (amounts you pay before Medicare pays), and coinsurance or copayments (your share of the cost for services). These costs can add up quickly, especially if you need ongoing medical care. A Medigap policy helps pay some or all of these costs, depending on which plan you choose.

It is important to understand that Medigap is different from Medicare Advantage (also called Part C). Medicare Advantage is another way to get Medicare benefits through a private insurance company, whereas Medigap works alongside Original Medicare. If you have a Medigap policy, you still have Original Medicare, and you use your Medigap insurance to cover the gaps.

According to the Centers for Medicare & Medicaid Services (CMS), as of 2023, approximately 8.3 million Medicare beneficiaries were enrolled in Medigap plans. This represents a significant portion of the Medicare population, showing that many people find value in this type of coverage.

The federal government sets the benefits included in each Medigap plan type, so the coverage is standardized across all insurance companies. However, the price of the same plan can vary between companies and states. This means that if you choose Plan G from Company A versus Plan G from Company B, the benefits will be identical, but the cost may be different.

Practical Takeaway: Medigap fills the gaps left by Original Medicare by helping pay deductibles, coinsurance, and copayments. Understanding this basic structure helps you see how Medigap fits into your overall health coverage picture.

The 10 Standardized Medigap Plan Options

The federal government offers 10 standardized Medigap plans, labeled A, B, D, G, K, L, M, N, and two high-deductible versions of Plan G and Plan F (Plan F is no longer sold to people new to Medicare after 2020, but some current enrollees still have it). Each plan covers a different combination of costs, so comparing them helps you understand what coverage level suits your needs.

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Plan A is the most basic option. It covers Medicare coinsurance or copayments for hospital stays, medical services, and blood transfusions. It also pays toward skilled nursing facility care. However, it does not cover the Part B deductible. Plan A tends to have lower premiums but leaves more out-of-pocket costs for you.

Plan G is currently one of the most popular choices, especially for new enrollees. Plan G covers the Medicare Part B deductible (which was $226 in 2023), coinsurance for hospital and medical services, skilled nursing facility coinsurance, and several other costs. The main gap it does not cover is the Part A deductible. Many people choose Plan G because it offers broad coverage at a moderate cost.

Plan N also attracts many enrollees because it costs less than Plan G but still covers a lot of expenses. With Plan N, you pay copayments for doctor visits ($20) and emergency room visits ($50), and you may pay coinsurance for some services. You also pay the Part B deductible. Despite these costs, Plan N can save money if you do not visit the doctor frequently.

Plans K and L are designed for people who want lower premiums and do not mind paying more out-of-pocket costs. These plans cover less than other plans but still provide meaningful protection. Plan K covers about 50% of out-of-pocket costs, while Plan L covers about 75%.

The high-deductible versions of Plans G and F require you to pay a deductible (typically around $2,700 in 2023) before the plan starts paying benefits. After you meet the deductible, the plan then covers what a standard Plan G or Plan F would cover. High-deductible plans appeal to people who want lower monthly premiums and expect to stay relatively healthy.

Practical Takeaway: Each of the 10 Medigap plans offers different coverage levels and costs. Plan G is popular for comprehensive coverage, Plan N offers moderate coverage at lower cost, and Plans K and L suit people who want minimal premiums. The right choice depends on your expected medical needs and budget.

How Medigap Premiums and Costs Are Calculated

Medigap premiums are the monthly payments you make directly to the insurance company, separate from your Medicare premiums. The amount you pay for Medigap depends on several factors, including which plan you choose, your age, where you live, and your health status (in some cases). Unlike Original Medicare, where the federal government sets prices, private insurance companies set Medigap prices, so costs vary between companies and states.

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Insurance companies use three main methods to set Medigap premiums: community-rated, issue-age-rated, and attained-age-rated pricing. Community-rated pricing means everyone in your area pays the same premium regardless of age. Issue-age-rated pricing bases your premium on your age when you first purchase the policy; your premium may increase with inflation but not because you get older. Attained-age-rated pricing increases your premium as you age, meaning your costs will rise each year after your birthday.

According to the Centers for Medicare & Medicaid Services, Medigap premiums vary significantly by location and plan type. For example, a Plan G premium for a 65-year-old might cost $120 per month in one state but $200 per month in another state. Within the same state, different insurance companies may charge different rates for the same plan.

Age is one of the most important factors affecting your premium. If you purchase a Medigap policy when you first turn 65 and become eligible for Medicare, you may receive a lower premium under certain circumstances. This is called the "open enrollment period," and rates are often better during this time. If you wait to purchase Medigap until later, some insurance companies may charge you more because you are older.

Your location (state and sometimes county) affects your cost because different regions have different medical costs and insurance regulations. Some states have more insurance companies offering Medigap plans, which can increase competition and potentially lower prices. Other states have fewer companies, which may mean fewer choices and different pricing.

When comparing costs, look at the total monthly premium, but also think about what services the plan covers. A plan with a higher premium might save you money overall if it covers more of your medical costs. For instance, Plan G costs more per month than Plan A, but it covers more expenses, so your total yearly healthcare spending might be lower with Plan G.

Practical Takeaway: Medigap premiums depend on the plan type, your age, your location, and the insurance company you choose. Comparing premiums from multiple companies in your area is important because the same plan can cost different amounts from different insurers.

When You Can Purchase Medigap and Special Enrollment Periods

The timing of when you purchase Medigap can significantly affect your cost and coverage options. The federal government created "open enrollment periods" to help people navigate this timing without facing penalties or higher prices.

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The best time to purchase Medigap is during the "Medigap open enrollment period," which lasts six months. This period starts on the first day of the month when you turn 65 and are enrolled in Medicare Part B. During this six-month window, you can purchase any Medigap plan offered by any insurance company in your state, regardless of health status. This is important because during this period, insurance companies cannot deny you coverage or charge higher premiums based on your health conditions (with rare exceptions). This protection is called "guaranteed issue" rights.

If you miss the standard open enrollment period, you may still have options. Some states have extended periods or additional protections. Additionally, if you lose your health coverage under certain circumstances — such as when you leave an employer plan or lose coverage — you may have "special enrollment periods" that grant you guaranteed issue