To compare Medicare supplemental insurance plans, also known as Medigap, a person needs to consider their specific healthcare coverage needs in addition to plan costs.
Plans with comprehensive coverage may have a higher monthly premium compared to plans where a person pays a portion of copays and coinsurances.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
- Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare supplement insurance, also known as Medigap, is voluntary.
While Medicare pays for a portion of many medical and health services, it does not always cover them completely. Medigap policies are designed to reduce a person’s unexpected, out-of-pocket healthcare costs.
Medigap policies are standardized, with the exception of Massachusetts, Minnesota, and Wisconsin. Plans are identified by letters A–N, and all plans in a certain letter must offer the same coverage. For example, if a person has a Medigap Plan D policy in California, their policy will offer the same coverage as a person who enrolls in Plan D in New York.
Once a person knows what Medigap policy they want, they can contact companies that offer those policies. Because plans are generally standardized, the main difference between Medigap policies is costs.
Medigap plans are lettered A–N. However, insurance companies no longer offer plans E, H, I, and J due to changing regulations.
Also, as of January 1, 2020, a person who is new to Medicare cannot purchase Plan C or F. However, if a person was eligible for Medicare before this time, they may still be able to purchase Plan C or F.
Individuals can find a comparison chart of the various plans on the Medicare.gov website.
Plans K and L will pay 100% of covered services for the calendar year after a person meets the out-of-pocket limits, which are $7,220 for Plan K and $3,610 for Plan L in 2025. In addition, a person must pay the annual Part B deductible, which is $185 in 2025.
Some Medigap companies offer Plan F and Plan G as high-deductible plans, which means the plan provider does not pay for Medicare-covered costs until a person has paid the deductible, which is $2,870 for 2025. Medicare costs will then be covered until the end of the calendar year. Traditionally, high-deductible Medigap policies have a lower monthly premium.
The following items may be important for a person in deciding on a Medigap plan:
- How much is the monthly premium?
- Does the plan include coverage for foreign travel?
- Does the plan include coverage for care at a skilled nursing facility?
- Are blood supplies covered in the plan?
In general, plans that offer the most benefits may also have higher premiums and plans with fewer benefits may cost less. For example:
- Fewer benefits, but lower premiums: Plan A and Plan B cover most basic benefits. The main difference between A and B is that Plan B covers the Part A deductible.
- Higher benefits but higher premiums: Plans C, F, and G are the most comprehensive plan offerings but are typically pricier.
- Cost-sharing plans, lower premiums: Plans K and L are cost-sharing premiums. This means a person will pay a percentage of costs, such as coinsurance or copays.
- Co-payments for doctor’s visits with an average premium: the monthly premiums for Plan N are in the mid-range for costs, although a person must paying copays for emergency room and doctor’s visits.
A person can check various plans online at the Find a Medicare Plan website. The information includes plan availability in a person’s area, cost estimates, and contact details for companies that sell Medigap plans. Each individual company website may offer additional information about costs and enrollment.
A person can enroll in Medigap at any time. However, when a person is in a guaranteed issue right period, an insurance company must give them an insurance policy without taking into account the person’s preexisting health conditions or current health problems.
There are several circumstances when a person may be in a guaranteed issue right period, including:
- A person has enrolled in Medicare because of a disability or because they turned age 65.
- A person has moved out of a Medicare Advantage plan service area, or their Medicare Advantage plan is leaving Medicare, and they are switching to Original medicare.
- A person had original Medicare and an employer-based health plan, but the employer-based plan coverage is ending.
Outside the guaranteed issue rights period, a person may be refused a Medigap policy due to age or preexisting health conditions.
What are the costs of Medigap plans?
The premiums for Medigap are not standardized. They vary by the area in which a person lives, the person’s age, and, sometimes, preexisting health conditions.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Medigap plans may help reduce out-of-pocket costs, and help a person manage their healthcare expenses.
A person is not required to buy a Medigap plan if they have original Medicare. However, they will usually experience the greatest cost-savings if they purchase a Medigap plan when they are first eligible for Medicare.
Tools such as the Medicare Plan Finder can help a person compare potential policies and companies offering Medigap plans.
