Updated: Nov 24, 2024

As you navigate Medicare, you might find gaps in coverage that leave you with out-of-pocket costs. Explore how Medicare Supplemental Insurance (Medigap) can fill those gaps and help you manage healthcare expenses effectively.

Medicare Supplemental Insurance, or Medigap, is designed to cover the “gaps” in Original Medicare (Parts A and B) by helping pay for costs like deductibles, co-pays, and coinsurance. This type of insurance is sold by private companies and works alongside Original Medicare to provide more comprehensive coverage. In this article, we’ll explain how Medigap works, what you need to consider when choosing a plan, and provide real-world examples of Medigap plans to help you find the best fit for your healthcare needs.

What Is Medigap?

Medigap is an additional insurance policy that helps cover healthcare costs not fully paid by Original Medicare. Original Medicare covers a significant portion of your hospital and medical costs, but it doesn’t pay for everything. Out-of-pocket costs, such as deductibles and co-pays, can add up quickly—this is where Medigap comes in.

Here’s how Medigap works:

• Available to Those with Original Medicare: You must be enrolled in both Medicare Part A and Part B to purchase a Medigap policy.
• Private Insurance: Medigap plans are sold by private insurance companies, but they are standardized and regulated by the federal government.
• Covers “Gaps”: Medigap helps cover costs such as deductibles, co-insurance, and excess charges, reducing your out-of-pocket expenses.
• Standardized Plans: Each Medigap plan (labeled Plan A, B, C, D, F, G, K, L, M, and N) offers a different level of coverage but is standardized across insurers. This means a Plan G from one company will provide the same coverage as a Plan G from another.

What Does Medigap Cover?

Medigap policies help with the healthcare costs that Medicare doesn’t fully cover. Here are some of the costs that Medigap can help with:

• Medicare Part A Coinsurance and Hospital Costs: All Medigap plans cover Medicare Part A coinsurance and provide an additional 365 days of hospital coverage after Medicare benefits are exhausted.
• Medicare Part B Coinsurance or Co-payments: Most Medigap plans cover these costs, though Plan K and Plan L only cover part of these expenses.
• Blood (First Three Pints): Medicare covers blood transfusions, but only after the first three pints. Most Medigap plans cover the cost of these first three pints.
• Hospice Care Coinsurance: Medigap helps cover the coinsurance required for Medicare-approved hospice care.
• Skilled Nursing Facility Coinsurance: Some Medigap plans cover the coinsurance required for skilled nursing facility care.
• Medicare Part A and B Deductibles: Depending on the plan, Medigap may cover the deductibles required for Parts A and B.

Medigap does not cover things like long-term care, dental or vision services, hearing aids, or private nursing. Additionally, Medigap policies purchased after 2006 do not include prescription drug coverage—you would need a separate Medicare Part D plan for that.

Standard Medigap Plans

Each Medigap plan is standardized by law, meaning that every insurance company offers the same benefits for each type of plan. Here’s a quick overview of the different Medigap plans available and what they cover:

Note: Plans C and F are no longer available to people who became eligible for Medicare after January 1, 2020, due to changes in Medicare regulations. However, if you were eligible before that date, you can still purchase one of these plans.

How to Choose the Best Medigap Plan for You

Choosing the right Medigap plan requires evaluating your healthcare needs and budget. Here are key factors to consider:

1. Assess Your Healthcare Needs

Think about your current health, how often you visit the doctor, and what kinds of medical services you typically use. For example, if you visit specialists frequently, you may benefit from a plan that offers robust coverage for Part B coinsurance.

• Frequent Travelers: If you travel abroad frequently, you’ll want to choose a plan that covers foreign travel emergencies (such as Plan G or Plan N).
• Chronic Conditions: If you have ongoing medical needs, a plan like Plan F or G, which offers comprehensive coverage including the Part A and B deductibles, may be worth the higher premium.

2. Compare Costs

Medigap plans typically require a monthly premium, and this premium varies depending on the plan and the insurance company you choose. It’s important to balance the cost of the premium with the coverage you need.

• High Deductible Options: Some plans, such as Plan G and F, offer high-deductible versions, meaning you pay lower premiums but must meet a higher deductible before the plan begins to pay.
• Out-of-Pocket Limits: Plans K and L have annual out-of-pocket limits, which cap your expenses and can be useful if you want to manage unpredictable healthcare costs.

3. Consider Future Health Needs

While a less comprehensive plan may save you money now, consider how your health may change over time. Some people prefer to pay higher premiums for comprehensive coverage to avoid large out-of-pocket expenses if their health deteriorates.

4. Check for Guaranteed Issue Rights

If you’re switching from a Medicare Advantage plan back to Original Medicare, or if you’re leaving an employer plan, you may have “guaranteed issue rights.” This means you can buy a Medigap policy without undergoing medical underwriting, and you can’t be denied coverage based on your health.

Real-World Examples of Medigap Plans

Here are some real-world examples of Medigap plans offered by different insurers, along with their costs and features.

Aetna Medigap Plan G

• Monthly Premium: $110 – $150 (depending on location).
• Coverage: 100% coverage for Part A and B coinsurance, Part A deductible, and 80% coverage for foreign travel emergencies.
• Additional Benefits: Discounts on vision, hearing, and wellness services.

Best for: Individuals looking for comprehensive coverage, especially those who travel frequently, without the high premiums of Plan F.

Cigna Medigap Plan N

• Monthly Premium: $90 – $130.
• Coverage: 100% coverage for Part A coinsurance, but has co-pays of up to $20 for some office visits and $50 for emergency room visits.
• Additional Benefits: Access to health and wellness programs.

Best for: People who want lower premiums but are comfortable with modest co-pays for doctor visits and emergency room visits.

Mutual of Omaha Medigap Plan F (available to those eligible before 2020)

• Monthly Premium: $180 – $220.
• Coverage: 100% of Part A and B deductibles, coinsurance, and other gaps.
• Additional Benefits: Vision discounts and access to health programs.

Best for: People who want the most comprehensive coverage possible and are willing to pay higher premiums for peace of mind.

Conclusion

Medigap plans can be an essential part of your Medicare strategy, especially if you want to reduce out-of-pocket expenses. Choosing the right plan depends on your healthcare needs, budget, and preferences. By comparing plans based on coverage and cost, you can find the Medigap policy that best fits your lifestyle and provides the financial protection you need as you age.