What Is a Medicare Supplement Plan?

A Medicare Supplement plan, often called Medigap, is private health insurance designed to work alongside your Original Medicare coverage. Original Medicare includes Part A (hospital insurance) and Part B (medical insurance), but it does not pay for everything. You are still responsible for deductibles, coinsurance, copayments, and other out-of-pocket costs. A Medicare Supplement plan helps fill some of those gaps, which is where the nickname "Medigap" comes from.

These plans are standardized in most states, meaning a Plan G from one insurance company must offer the same core benefits as a Plan G from any other company. The main differences between insurers usually come down to price, customer service quality, and rate increase history. You pay a monthly premium for a Medigap policy on top of your Medicare Part B premium.

What Medigap Plans Cover

There are currently ten standardized Medigap plans available in most states: A, B, D, G, K, L, M, and N, plus high-deductible versions of Plan F and Plan G in some areas. Plans C and F are no longer available to people who became eligible for Medicare after January 1, 2020, although current beneficiaries can keep them.

Coverage varies by plan letter, but the most comprehensive options for newer enrollees include:

  • Plan G: Covers all Medicare-approved cost-sharing except the annual Part B deductible. This makes it the most popular choice for people new to Medicare today.
  • Plan N: Covers most cost-sharing but requires copayments for some office and emergency room visits and does not cover Part B excess charges.
  • Plan A: The most basic option, covering only the core benefits like Part A coinsurance and Part B coinsurance.
  • Plans K and L: Lower-premium plans with higher out-of-pocket limits that you must meet before full coverage kicks in.

It is important to understand what Medigap plans do not cover. They do not pay for prescription drugs (you need a separate Part D plan for that), dental care, vision care, hearing aids, long-term care, or private-duty nursing. Medigap policies also cannot be combined with Medicare Advantage plans; you must choose one or the other.

How to Enroll in a Medicare Supplement Plan

The best time to enroll in a Medigap plan is during your six-month Medigap Open Enrollment Period. This window starts the month you turn 65 and are enrolled in Medicare Part B. During this time, insurance companies must sell you any plan they offer regardless of your health conditions or pre-existing conditions, and they cannot charge you a higher premium because of your medical history.

If you apply outside of open enrollment, insurers can use medical underwriting to decide whether to accept your application, charge you more, or deny coverage altogether. A few states have additional rules that give residents extra enrollment rights, including New York, Connecticut, Massachusetts, Maine, Missouri, California, Oregon, and Washington, where annual or birthday rule enrollment periods may apply.

To choose the right plan, compare monthly premiums, look at how each insurer has raised rates over the past three to five years, and verify the company's reputation for customer service. Independent rating sites like AM Best for financial strength and J.D. Power for member satisfaction can help guide your decision.

How Much Medigap Plans Cost

Premiums for Medicare Supplement plans vary widely based on your age, gender, zip code, tobacco use, and the pricing method the insurer uses. Three common pricing methods determine how your premium changes over time:

  • Community-rated (no-age-rated): Everyone in the same area pays the same premium regardless of age. Premiums may still rise due to inflation or other factors, but not because you get older.
  • Issue-age-rated: Your premium is based on your age when you first buy the policy. Younger buyers lock in lower rates, and increases are not tied to your current age.
  • Attained-age-rated: Your premium starts low but increases as you get older, often resulting in the highest lifetime cost. These plans can look attractive at 65 but become expensive by age 80 or older.

For a 65-year-old in most states, Plan G premiums typically range from around $110 to $250 per month depending on the insurer and location. Plan N is usually slightly cheaper. Remember, you also pay the Medicare Part B premium, which is set by the federal government and deducted from your Social Security check.

Medigap vs. Medicare Advantage

Many new Medicare beneficiaries struggle with the choice between a Medigap plan and a Medicare Advantage plan. They are very different products, even though both are offered by private insurance companies.

Medicare Advantage (Part C) is an alternative to Original Medicare. These plans bundle Part A, Part B, and usually Part D drug coverage into a single plan. They often have low or zero monthly premiums, include extra benefits like dental and vision, and use provider networks such as HMOs or PPOs. The trade-off is that you typically face copayments, coinsurance, and an annual out-of-pocket maximum, plus you must follow network rules and get referrals in some plans.

Medigap works alongside Original Medicare and lets you see any doctor or hospital in the country that accepts Medicare, with no network restrictions. You pay a higher monthly premium, but your out-of-pocket costs for covered services are much lower and more predictable. This freedom and predictability is why many people who travel frequently, live in multiple states, or want stable long-term costs choose Medigap.

The right choice depends on your budget, health, lifestyle, and how much you value provider flexibility. What works well for one person may not be the best fit for another, so it is worth thinking carefully about your situation before enrolling. Working with an independent insurance broker who specializes in Medicare can help you compare options in your specific area without paying any extra fees.