Medicare supplement insurance, also known as Medigap, is an option for people enrolled in original Medicare. Medigap plans are standardized, and the main differences between them are availability and costs.
This article looks at Medigap plans, coverage, and some factors to consider. It also discusses enrollment and costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medigap is supplemental insurance that can help a person enrolled in original Medicare (Part A and Part B) fill gaps in their coverage.
Although Medicare covers a significant portion of insurance costs, a person is still responsible for copays and deductibles, as well as some other costs that Medicare may not cover, such as blood administration.
Around 25% of people enrolled in original Medicare had a Medigap plan in 2015, according to the Case Management Society of New England.
Some important facts about Medigap include the following:
- A person cannot have Medigap coverage if they have a Medicare Advantage, or Medicare Part C, plan.
- A person must be enrolled in original Medicare to qualify for Medigap.
- Medigap plans are standardized, and not all plans are available in every state.
- Some Medigap plans are no longer available. For example, as of January 1, 2020, companies can no longer offer plans C or F to new enrollees. However, if a person had these plans prior to January 1, 2020, they can keep them.
- A person will pay separate monthly premiums for their Medigap plan and for original Medicare Part B.
- A Medigap policy covers only one person, which means that spouses must get separate policies.
There are 10 Medigap plans: A, B, C, D, F, G, K, L, M, and N. In some states, plans F and G are available as high deductible plans.
Medigap plans are standardized, which means, for example, that Medigap Plan A offers the same coverage to a person in New York as it does to a person in California.
However, three states — Massachusetts, Minnesota, and Wisconsin — standardize their Medigap plans differently. If a person living in one of these three states gets a Medigap plan, they can keep the same plan if they move to another state.
Plan C and Plan F (and the high deductible version of Plan F) are no longer available to new enrollees in Medicare after January 1, 2020. However, if a person was eligible for original Medicare before January 1, 2020, but chose not to enroll, they may still have access to those plans.
The following table compares Medigap plans:
|Part A coinsurance and hospital costs, up to 365 days after using up Medicare benefits||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copays||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|First 3 pints of transfused blood||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copay||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Coinsurance for skilled nursing facility care||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Part B deductible||No||No||Yes||No||Yes||No||No||No||No||No|
|Part B excess charge||No||No||No||No||Yes||Yes||No||No||No||No|
|Foreign travel exchange (up to the plan’s spending limits)||No||No||80%||80%||80%||80%||No||No||80%||80%|
|Out-of-pocket limit for 2020||N/A||N/A||N/A||N/A||N/A||N/A||$6,220 in 2021||$3,110 in 2021||N/A||N/A|
Both plans F and G are available as high deductible plans. These plans may cost less per month, but a person must pay costs to a certain limit — which is $2,370 in 2021 — before the policy starts to pay.
The main differences between Medigap plans are costs and coverage.
When selecting a plan, a person may wish to consider the following factors:
- For travel outside the United States, some policies offer up to 80% healthcare coverage.
- Some Medigap plans may offer more coverage for out-of-pocket costs than for catastrophic costs.
- People may need to balance coverage limits for out-of-pocket costs against the potential monthly premium.
A person may decide on the best Medigap plan for them by comparing coverage and affordable monthly premiums.
Medigap premiums can vary based on several factors. These factors include:
- Region: Private health insurance companies may vary costs based on what they typically pay out in a given area.
- Guaranteed issue period: During this period, a Medigap company cannot deny a plan to a person based on their age or preexisting health conditions. A person is in a guaranteed issue period when they first qualify for Medicare or when they move out of an area where they had a Medicare Advantage plan and return to original Medicare.
- Preexisting health conditions: If a person is not in a guaranteed issue period, a Medigap company can deny them coverage based on their preexisting conditions, such as if the person smokes, or they may charge a higher premium.
- Age: As a general rule, Medigap premiums increase as a person gets older. However, some states have regulations that prohibit Medigap companies from increasing their plan premiums based on age. These states include Arkansas, Connecticut, Massachusetts, Maine, Minnesota, New York, Vermont, and Washington.
- Plan: In general, a Medigap plan that offers comprehensive coverage may also have a high monthly premium.
Medicare’s online search tool can help a person compare Medigap plans, including costs and coverage. Using their zip code, a person can view available plans and then contact the company directly to ask about enrolling.
Most companies will allow a person to enroll in Medigap online, over the phone, or by mail.
Some companies may offer varying discounts. This may be the case when a member of the person’s household enrolls or if the person enrolls online.
While a person is in a guaranteed issue period, they may get the best monthly premiums. However, people can enroll in a Medigap plan any time an insurance company offers them a policy.
Original Medicare does not have out-of-pocket limits for spending. Medigap plans may help keep a person’s out-of-pocket costs low.
However, people should weigh the costs of their monthly premium against the costs of coverage. They can use these considerations to determine the best plan and acceptable premium for them.
The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.
We will update the 2021 costs as soon as possible after the Centers for Medicare and Medicaid Services have released them.
We last updated the costs on this page on November 3, 2020.