Medicare Supplement Insurance (Medigap)

Why Medigap Exists — The Problem It Solves

Original Medicare (Parts A and B) covers a lot, but it leaves significant gaps. Most importantly, it has no out-of-pocket maximum. The 20% Part B coinsurance alone can add up quickly: a $100,000 surgery leaves you owing $20,000. The $1,676 Part A hospital deductible resets every benefit period. Days 61–90 in the hospital cost $419/day in coinsurance.

Medigap (also called Medicare Supplement Insurance) is private insurance designed to pay these leftover costs. After Medicare pays its share, your Medigap plan pays some or all of the remaining amount — depending on which plan you choose.

Critical rule: Medigap only works with Original Medicare. If you're enrolled in Medicare Advantage, you cannot use a Medigap plan. They are mutually exclusive.

How Medigap Works

1. You see a Medicare-accepting provider and receive covered services.
2. Medicare processes the claim and pays its share (typically 80% of approved amount for Part B services).
3. Your Medigap plan automatically pays its portion of what's left — you may owe nothing, or just a small amount, depending on your plan.
4. You pay the Medigap insurer a monthly premium regardless of whether you use it.

Most Medigap plans allow you to see any provider nationwide that accepts Medicare — the same freedom as Original Medicare itself.

The 10 Standardized Plan Types

Medigap plans are standardized by federal law — Plan G from Company A covers exactly the same benefits as Plan G from Company B. The only differences between insurers are the monthly premium and customer service quality. This standardization makes comparison shopping straightforward.

* Plan G also has a high-deductible version. † Plan N pays Part B coinsurance except for copays up to $20 for office visits and up to $50 for ER visits (if not admitted).

The Most Popular Plans for New Enrollees

When to Buy — The Critical Enrollment Window

The best time to buy Medigap is during your 6-month Medigap Open Enrollment Period. This window starts the month you are both:

• Age 65 or older, AND
• Enrolled in Medicare Part B

During this window, insurers must sell you any Medigap plan they offer at their standard rate, regardless of your health history. They cannot deny you coverage or charge you more because of pre-existing conditions. This is called "guaranteed issue."

Guaranteed Issue Rights (Special Situations)

Even outside your initial open enrollment period, federal law guarantees you the right to buy certain Medigap plans in specific situations, including:

• Your Medicare Advantage plan is leaving your area or you move out of its service area
• Your Medicare Advantage plan goes bankrupt or stops covering care in your area
• You leave a Medicare Advantage plan within the first 12 months of joining (trial right)
• Your employer coverage ends
• You had Medigap and the insurer went bankrupt

How Medigap Plans Are Priced

Insurers use three pricing methods, which significantly affect long-term costs:

• Community-rated (no-age-rated): Same premium for everyone regardless of age. Premiums may increase with inflation but not because you're getting older. Best long-term value.
• Issue-age-rated: Premium based on your age when you buy the policy — and stays at that rate (adjusted only for inflation). Younger buyers lock in a lower rate.
• Attained-age-rated: Premium increases as you age. Often starts cheapest but becomes the most expensive over time. Most common type.

When comparing Medigap quotes, ask which pricing method the insurer uses — the initial premium alone doesn't tell the whole story.

Medigap vs. Medicare Advantage — Which Is Right for You?