Medicare Supplement Plans: Comparing Medigap Coverage Options

Original Medicare Covers 80%. Medigap Covers the Rest.

Original Medicare (Parts A and B) covered 67.2 million Americans as of 2023, yet it has no out-of-pocket maximum. A prolonged hospital stay or series of specialist visits can generate thousands of dollars in cost-sharing that Medicare leaves uncovered. Medicare Supplement Insurance — standardized federally and marketed as Medigap — fills those gaps. Ten plan types exist, labeled A through N (with C and F unavailable to new enrollees after January 1, 2020). Each is standardized by benefit: any insurer selling Plan G must provide identical benefits to any other insurer's Plan G. Premium, however, can vary significantly by company and rating method.

What Original Medicare Leaves Uncovered

Understanding Medigap requires first understanding Original Medicare's cost-sharing structure. In 2024:

• Part A hospital deductible: $1,632 per benefit period (not per year — a new benefit period begins after 60 days out of the hospital)
• Part A coinsurance: $408/day for days 61–90; $816/day for lifetime reserve days (91–150)
• Part B deductible: $240/year
• Part B coinsurance: 20% of all approved charges after deductible, with no cap
• Part B excess charges: Up to 15% above Medicare-approved amounts, charged by non-participating providers

A cancer diagnosis or major surgery could easily generate $15,000–$30,000 in uncovered cost-sharing under Original Medicare alone. That exposure is what Medigap eliminates or limits.

The Standardized Plans: A Comparison

*Plan N covers Part B coinsurance with copayments up to $20 for office visits and $50 for emergency department visits that don't result in admission.

Plan G: The Most Comprehensive Available to New Enrollees

Since Plan F became unavailable to new Medicare enrollees in 2020 (existing enrollees may keep it), Plan G has become the most comprehensive option for new beneficiaries. It covers everything Plan F covers except the Part B deductible ($240 in 2024). Given that the annual premium difference between Plan G and Plan F often exceeds $240 at many insurers, Plan G frequently offers better value even when accounting for the deductible.

Plan G's coverage of Part B excess charges is particularly valuable for beneficiaries who prefer to see any physician — including the roughly 5% of physicians who do not accept Medicare assignment and may charge up to 15% above Medicare-approved amounts.

Plan N: Lower Premiums, Some Cost-Sharing

Plan N is gaining popularity as a lower-premium alternative to Plan G. It covers the Part A deductible and full Part B coinsurance, but allows insurers to charge up to $20 for office visits and $50 for emergency visits not resulting in hospital admission. It does not cover Part B excess charges — meaning Plan N beneficiaries should confirm their doctors accept Medicare assignment before enrolling.

For a relatively healthy beneficiary who sees physicians infrequently, the premium savings on Plan N (often $30–$80/month less than Plan G) can more than offset the copayments. For heavy utilizers, Plan G's predictability typically wins.

How Medigap Premiums Are Set

Insurers use three rating methods to set Medigap premiums, and the method affects how premiums change as you age.

• Community-rated: Same premium for all enrollees regardless of age. Younger enrollees subsidize older ones; premiums only increase with inflation, not age.
• Issue-age-rated: Premium set at enrollment age and stays at that level (inflation adjustments only). Enrolling young locks in a lower base.
• Attained-age-rated: Most common. Premiums increase as the beneficiary ages. Lower premiums at enrollment but rise each year; most expensive long-term.

Identifying which method an insurer uses before enrolling is essential for long-term cost projections.

Open Enrollment and Underwriting

The Medigap open enrollment period is the six-month window beginning the month a beneficiary is both age 65 or older and enrolled in Medicare Part B. During this window, insurers cannot deny coverage or charge higher premiums based on health status. Outside this window, medical underwriting applies in most states — meaning applicants with pre-existing conditions may be denied or charged more. Some states (Connecticut, Massachusetts, New York) require year-round guaranteed issue. This makes enrolling during the open enrollment period critically important for most beneficiaries.

Medigap plans do not cover prescription drugs (Part D is separate), dental, vision, or hearing — gaps that require separate supplemental coverage or Medicare Advantage enrollment, which provides an all-in-one alternative to Original Medicare plus Medigap.

This article is for informational purposes only and does not constitute financial advice.