What is Medigap, and Why Do I Need Supplemental Insurance?

There’s nothing more personal than your health or finances; balancing the two can be tricky. Original Medicare costs can add up quickly. By purchasing a Medigap policy, you are able to offset some of those costs, but you will need to pay more in monthly premiums. Continue reading to learn how Medigap works alongside Original Medicare.

Original Medicare (Part A and Part B) covers a wide range of hospital and medical services. However, beneficiaries are still responsible for a copay or coinsurance when they use most services, and they must reach an annual deductibles before the insurance starts to pay. As a result, even with Medicare, frequent hospital or doctor visits can be expensive.

Medicare Supplement insurance, also referred to as Medigap, cover some of the costs Original Medicare doesn’t. 

A Medicare Supplement insurance plan offers:

• Different coverage levels with standard benefits for each plan. 
• A range of services and plans, each assigned a letter from “A” to “N.” Note that plans “E”, “H”, “I” and “J” are no longer sold.
• Basic Medigap coverage is the same across most states and insurance companies.
• Each Medigap plan follows federal and state laws to protect you and your policy.

For the most part, Medigap Plan A in one state provides the same coverage as plan A in a different state. However, there are exceptions to this rule with a few states. We discuss these exceptions below.

Medicare Supplement plans cover some costs not provided for by Original Medicare, such as the 20% coinsurance charged for most doctor’s visits. All Medicare Supplemental insurance plans must cover these standard services:

• Medicare Part A coinsurance costs for inpatient care, up to an additional 365 days after Medicare benefits run out
• Coinsurance or copayments A copayment is the fixed amount you pay directly to your provider for medical services or prescription drugs covered in your plan. For example: If your plan includes a copayment of $20 for office visits, you'll pay $20 to your doctor whenever you have an appointment. for hospice care
• Medicare Part B coinsurance or copayments
• Up to three pints of blood

Specific Medigap plans provide additional coverage like:

• Skilled nursing facility care Skilled nursing facilities provide in-patient extended care with trained medical professionals to recover from injury or illness and activities of daily living. These facilities provide physical and occupational therapists, speech pathologists and medical professionals assist with medications, tube feedings and wound care. Skilled nursing stays are usually covered under Medicare Part A. coinsurance 
• Part A deductible
• Part B deductible (no longer covered for new Medicare beneficiaries)
• Part B excess charges (additional charges that certain doctors may decide to add on top of the Medicare-recommended amount for a service)
• Emergency care during foreign travel

Medicare Supplement plans don’t cover:

• Prescription drugs
• Vision
• Dental
• Long-term care
• Hearing aids

Do you have more questions about Medicare Supplement coverage? Learn more.

It can be challenging to understand what each Medigap policy offers and whether it’s right for you.

We’ve created a chart for a side-by-side comparison. Any percentage less than 100% requires you to pay the remaining cost.

Medigap policies are standardized differently if you live in Massachusetts, Minnesota, or Wisconsin. Otherwise, these coverage details are the same for plans across the country.

• Medicare Supplement Plan F and Plan G each also offer a variation with a high deductible in some states. In 2024, you must pay $2,800 in shared costs before your supplemental coverage begins. These options charge lower monthly premiums, so they can help you save in years when you have lower healthcare expenses.
• As of January 1, 2020, new Medicare enrollees are not eligible for Plan C or Plan F. If you were eligible for Medicare before January 1, 2020 but did not enroll, you may still be eligible.
• Medigap Plans K and L pay 100% of covered services after you reach the annual out-of-pocket limit and pay the yearly Part B deductible. Your annual out-of-pocket limit and Part B deductible reset each calendar year. In 2024, the Part B deductible is $240.
• Medicare Supplement Plan N pays 100% of the Part B coinsurance with certain exceptions. For example, an office visit copay of $20 or $50 copay for emergency room visits that don’t include inpatient admission.

Learn more about Medigap plan costs and how to enroll.

Is Medigap the right decision for you? Consider your choices carefully and contact a licensed insurance agent for guidance.

You may also want to consider Medicare Advantage (Part C) plans. Those policies can offer lower Medicare costs while providing additional benefits like coverage for prescription drugs, vision, dental, and hearing.