Medicare Supplement Plans: How Medigap Works and How to Choose (US)
Original Medicare covers a lot, but it leaves you paying deductibles, copayments and coinsurance. Medicare Supplement insurance, known as Medigap, is sold by private insurers to help with those costs. This guide applies to the United States.
In this article
At a glance
- Medigap works only with Original Medicare, not with Medicare Advantage.
- Most plans are standardized by letter, so a Plan G is the same benefit across insurers; prices differ.
- Your best time to buy is the six-month Medigap open enrollment period.
- How the insurer prices the plan over time matters as much as today's premium.
What Original Medicare leaves uncovered
Original Medicare has two main parts. Part A helps pay for hospital stays, skilled nursing care after a hospital stay, hospice and some home health care. Part B helps pay for doctor visits, outpatient care, preventive services and certain equipment. You usually pay a deductible for each part, coinsurance or copayments for many services, and there is no yearly cap on what you could pay out of pocket under Original Medicare alone.
A Medigap policy pays some or all of these leftover costs. You continue to pay your Part B premium, and you pay a separate monthly premium to the insurer that sells your Medigap policy.
Medigap or Medicare Advantage?
| Original Medicare plus Medigap | Medicare Advantage (Part C) | |
|---|---|---|
| How it works | You keep Original Medicare and add a supplement | A private plan replaces Original Medicare |
| Choice of doctors | Any provider that accepts Medicare, nationwide | Usually a plan network |
| Monthly cost | Part B premium plus Medigap premium | Part B premium plus any plan premium, often low or zero |
| Costs when you use care | Low and predictable | Copayments and an out-of-pocket maximum |
| Prescription drugs | Need a separate Part D plan | Often included |
Neither is better for everyone. Medigap suits people who want to see any Medicare provider and prefer predictable costs, and who can pay a higher premium. Medicare Advantage suits people who want lower monthly costs and are comfortable with a network. You cannot use Medigap with a Medicare Advantage plan, and you generally cannot be sold a Medigap policy while enrolled in one.
The standardized plan letters
In most states, Medigap plans are labelled with letters, and each lettered plan offers the same basic benefits no matter which company sells it. The common plans are A, B, D, G, K, L, M and N. Plans C and F are available only to people who became eligible for Medicare before January 1, 2020.
| Plan | What stands out |
|---|---|
| A | Basic benefits; the lowest-premium option in many areas, with the most out-of-pocket exposure |
| G | Covers almost everything the supplement can, except the yearly Part B deductible; very popular among new enrollees |
| N | Lower premium than G, with small copayments for some office and emergency room visits, and you may pay Part B excess charges |
| K and L | Cover a share of costs and have an out-of-pocket limit; lower premiums |
| F and C | Cover the Part B deductible too, but only open to those eligible before 2020 |
Massachusetts, Minnesota and Wisconsin standardize their plans differently, so check your state's rules.
When to buy matters
Your Medigap open enrollment period lasts six months and starts the month you are 65 or older and enrolled in Part B. During this window, insurers must sell you any Medigap policy they offer in your area at the standard price, regardless of your health history. After it ends, insurers in most states can ask health questions and may decline you or charge more, except in specific situations that give you guaranteed issue rights, such as losing certain other coverage. Plan the timing carefully, because missing this window can limit your choices.
How insurers price Medigap
| Pricing method | How it works | What to watch |
|---|---|---|
| Community-rated | The same premium for everyone, regardless of age | Usually rises with inflation, not with your age |
| Issue-age-rated | Based on your age when you buy | Starts higher for older buyers, but does not rise with your age |
| Attained-age-rated | Based on your current age, so it rises as you get older | Starts cheaper but can become expensive over time |
Two plans with the same price today can be very different in ten years. Ask each insurer how its premiums have changed in the past and which pricing method it uses. Some states also offer discounts for paying annually, for multiple household members or for non-smokers.
A simple cost comparison
Imagine one year with 8,000 of Medicare-approved outpatient charges and a 5,000 hospital stay. With Original Medicare alone, you could owe the Part B deductible and 20% of outpatient charges, plus the Part A hospital deductible, without a cap. With a Plan G, most of those leftovers are covered, except the Part B deductible. The supplement's monthly premium is what you pay for the predictability. Add up your expected yearly premiums against the leftover costs you would otherwise face, and consider what a bad year would cost.
What Medigap does not cover
- Prescription drugs; you need a separate Part D plan.
- Most dental, vision and hearing care.
- Long-term custodial care.
- Private-duty nursing.
- Care outside the United States, except limited emergency coverage on some plans.
A checklist for choosing
- Decide whether you want Original Medicare with a supplement or Medicare Advantage.
- Mark the date your six-month open enrollment starts.
- Choose the plan letter based on how much cost uncertainty you can tolerate.
- Get quotes from several insurers for the same plan letter and compare prices.
- Ask about the pricing method and the rate-increase history.
- Check the insurer's financial strength and complaint record.
- Pair the plan with a Part D drug plan that covers your medicines.
- Use your state's free health insurance counseling program, which offers unbiased help.
Staying alert to scams
People approaching Medicare age receive many calls, mailings and ads. Medicare will not call you to sell you a plan. Do not share your Medicare number with unsolicited callers, and be wary of anyone who pressures you to decide on the spot. If you are also comparing coverage for younger family members, see our guide to the health insurance marketplace.
Questions readers ask
Can I switch Medigap plans later?
You can usually change insurers or plan letters, but outside special rights, the new insurer may ask health questions and may decline you or charge more.
Do I need Medigap if I have an employer plan?
It depends on how the employer plan works with Medicare. Ask the plan administrator before you buy a supplement you may not need.
Is Medigap the same as Medicare Advantage?
No. Medigap supplements Original Medicare. Medicare Advantage replaces it with a private plan.
Where can I get free, unbiased advice?
Every US state has a State Health Insurance Assistance Program that offers free counseling. Medicare.gov also has a plan-finder tool for Medigap policies.
This guide is general information, not personal financial, tax, legal or insurance advice. Rules, rates and limits change and differ by country, so confirm current details with the relevant authority or a licensed professional.
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