Navigating Medicare can be overwhelming, especially when it comes to understanding the gaps in your coverage. That’s where Medigap policies come in. Also known as Medicare Supplement Insurance, these policies help cover some of the healthcare costs that Medicare Parts A and B don’t cover, like copayments, coinsurance, and deductibles. If you're considering a Medigap policy, it's important to understand what these plans offer and how to choose the right one for your needs.

What Do Medigap Policies Cover?

Medigap policies are designed to fill in the “gaps” left by Original Medicare. These gaps can leave you with significant out-of-pocket expenses.

Depending on the Medigap plan you choose, it may help cover:

  1. Part A Hospital Coinsurance and Hospital Costs: After Medicare benefits are exhausted, Medigap plans typically cover additional days in the hospital (up to 365 days beyond what Medicare covers).
  2. Part B Coinsurance or Copayments: Medicare Part B covers 80% of approved services, and you are usually responsible for the remaining 20%. Most Medigap plans cover some or all of these costs.
  3. First Three Pints of Blood: If you need a blood transfusion, Medicare covers the cost after the first three pints. Medigap plans help pay for those first three pints.
  4. Part A Hospice Care Coinsurance or Copayment: Hospice care is largely covered by Medicare, but there may be copayments for prescription drugs and inpatient respite care. Medigap helps cover these costs.
  5. Skilled Nursing Facility Coinsurance: While Medicare covers some skilled nursing facility care, Medigap plans can help pay for the coinsurance required for extended stays.
  6. Part A and Part B Deductibles: Some Medigap plans will cover the deductible you owe before Medicare kicks in. For instance, Plan F and Plan G cover the Part A deductible, while Plan F also covers the Part B deductible (note that Plan F is no longer available to new enrollees as of 2020).
  7. Foreign Travel Emergency Costs: If you travel abroad, Original Medicare generally doesn’t cover healthcare outside the U.S. However, some Medigap plans offer coverage for emergency care while traveling. 

Compare the benefits offered by each Medigap plan.

What Medigap Policies Don’t Cover:

While Medigap is a great way to cover additional healthcare costs, it’s important to know what it doesn’t cover. Medigap plans do not include:

  • Prescription drugs (You’ll need a separate Medicare Part D plan for this)
  • Long-term care (like nursing homes or in-home care)
  • Routine dental, vision, or hearing care
  • Eyeglasses
  • Private-duty nursing

If you need coverage for any of these services, you’ll need to consider additional insurance, such as a standalone dental plan or long-term care insurance. Learn more about Medigap Policy Coverage.

How to Choose the Right Medigap Plan

Choosing the right Medigap plan depends on your healthcare needs, budget, and preferences. There are ten standardized Medigap plans available in most states, labeled A through N, and each plan offers a different combination of coverage.

Here’s how to choose:

  1. Consider Your Health Needs: Think about your current health and the type of care you expect to need in the future. If you have chronic conditions or anticipate needing regular doctor visits, you might want a plan that covers most of the out-of-pocket costs, like Plan G. On the other hand, if you're generally healthy and don’t visit the doctor often, a more basic plan like Plan A might suffice.
  2. Understand the Plan Options: Each Medigap plan covers a different set of benefits, but the coverage is standardized across insurance companies. This means that Plan G from one company must offer the same benefits as Plan G from another company. The difference will be the price, not the coverage.
  • Plan F: Covers 100% of the gaps in Original Medicare, but it’s only available to people who were eligible for Medicare before January 1, 2020. 
  • Plan G: Similar to Plan F but does not cover the Part B deductible.
  • Plan N: Covers most out-of-pocket costs but requires small copayments for office visits and emergency room visits.
  1. Evaluate Premium Costs: The premium you pay for a Medigap plan depends on several factors, including the plan you choose, where you live, and the insurance company you buy from. While the coverage is standardized, prices can vary, so it’s a good idea to shop around for the best deal. Remember that the cheapest plan may not always be the best if it doesn’t meet your needs.
  2. Consider the Pricing Structure: Medigap plans can be priced in three different ways:
  • Community-rated: Everyone in the area pays the same premium regardless of age.
  • Issue-age-rated: The premium is based on your age when you first buy the policy. The younger you are when you buy, the lower your premium, and it won’t increase due to age.
  • Attained-age-rated: The premium starts low but increases as you get older.
  1. Check the Insurance Company’s Reputation: Since Medigap plans are offered by private insurance companies, it’s important to choose a company with a solid reputation. Look for companies with good customer service, financial stability, and positive reviews from other policyholders.
  2. Think About the Future: Remember that your healthcare needs may change as you get older. While a cheaper plan may seem attractive now, a more comprehensive plan might be a better fit if you anticipate needing more medical care down the road. Switching plans later may be more difficult, as you could be subject to medical underwriting if you apply outside of your Medigap Open Enrollment Period.

Learn more about how to choose a Medigap policy.

When to Enroll in a Medigap Plan

The best time to buy a Medigap policy is during your six-month Medigap Open Enrollment Period, which starts the month you turn 65 and are enrolled in Medicare Part B. During this time, you can buy any Medigap policy without worrying about being denied coverage or charged higher premiums because of preexisting conditions. After this window closes, you may have to go through medical underwriting, and your application could be denied.

Choosing the right Medigap policy can feel overwhelming, but it’s an important step in protecting yourself from unexpected healthcare costs. If you want to dive deeper into Medigap options and compare plans, GetSetUp offers classes that can help you with the process.

Reviewed By: Keith Gilbert