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What is Medigap? Your guide to Medicare supplement insurance

What Medicare supplement plans cover, when you can enroll if you're eligible, and what you can expect to pay for coverage

What is Medigap?

Medigap, also known as Medicare supplement insurance, is an insurance policy that supplements Original Medicare. It’s designed to cover some or all of the out-of-pocket costs that a beneficiary would otherwise have to pay for services covered by Original Medicare.

Original Medicare does not have a cap on out-of-pocket costs, and most people have supplemental coverage. Only 8% of Medicare beneficiaries rely solely on Original Medicare. So when you’re enrolling in Medicare, you can either choose Original Medicare plus a Medigap policy (and a Medicare Part D prescription drug plan if you don’t have other prescription coverage), or a Medicare Advantage policy. You can’t use (and don’t need) a Medigap policy in conjunction with a Medicare Advantage plan.

Learn more about Medicare Advantage plans.

What is the difference between Medicare Advantage
and Medicare supplement (Medigap)?

Medigap Medicare Advantage
Is there an annual plan change opportunity? Not without medical underwriting, unless you’re in a state that requires it. Yes, during the Annual Election Period and Medicare Advantage Open Enrollment Period.
Is coverage guaranteed-issue? Yes, during your Medigap open enrollment period (six months, starting when you’re 65 and enrolled in Medicare Part B). In most states, no, after your initial enrollment period has ended. If you’re under 65, this varies by state. Yes. (Note that you can enroll when you’re first eligible or during the Annual Election Period. You can also make a plan change during the Medicare Advantage Open Enrollment Period. Outside of those windows, you generally cannot enroll in a Medicare Advantage plan without a special enrollment period.
How high are out-of-pocket costs? This varies by plan. For new enrollees, it can be as low as just the $240 Part B deductible (with Plan G), but less comprehensive plans can result in higher out-of-pocket costs. (Note that this does not include prescription costs.) Out-of-pocket costs can be as high as $8,850 for in-network benefits, although the average is less than $5,000. (Note that this does not include prescription costs.)
How high are premiums? Varies by plan and location. Varies by plan and location, but the average premium in 2023 was about $18/month (in addition to the cost of Part B). About two-thirds of enrollees are in plans that have no premium other than the cost of Part B.
What medical providers can you see? With the exception of Medicare SELECT, Medigap plans cover any providers who accept Medicare, nationwide. Plans create their own provider networks, which can be local or national. Plans can limit care to in-network providers, or give the option to see out-of-network providers at a higher cost.
Are prescription drugs covered? No. Medigap plans sold after 2005 do not include prescription coverage, so enrollees need separate coverage for that. 89% of all Medicare Advantage plans include prescription coverage.
Are plans available in all areas of the U.S. and its territories? Plans are available throughout the U.S., although the number of available plans varies from one area to another. Plans are not available in the U.S. territories. Plans are available in nearly all areas, although 68 rural counties have no Medicare Advantage plans available in 2024. There are also no Medicare Advantage plans available in Guam, the Virgin Islands, American Samoa, or the Northern Mariana Islands, although there are Medicare Advantage plans available in Puerto Rico.

What is Medigap coverage used for?

Medigap coverage will pay various medical bills that Original Medicare beneficiaries would otherwise have to pay themselves. Original Medicare includes Medicare Part A, for inpatient care, and Medicare Part B, for physician services and outpatient care. Both parts have out-of-pocket costs, and there is no limit on how high those costs can be:

  • Medicare Part A has a deductible for each benefit period, plus daily charges that begin to accrue after 60 days in the hospital or after 20 days of a covered skilled nursing facility stay.
  • Medicare Part B has an annual deductible, and then 20% coinsurance for all covered services. (Certain preventive care is fully covered, without a deductible or coinsurance.)

What costs does Medigap cover?

The answer depends on the Medigap policy you select. In all but three states, currently available Medigap policies are standardized under one of ten benefit designs that specify exactly what costs are covered by each plan. (Note that two of them – Plan C and Plan F – are not available to people who became eligible for Medicare in 2020 or later.)

The most comprehensive Medigap plan available to newly eligible enrollees is Plan G, which covers nearly all out-of-pocket costs for services covered by Original Medicare. Plan G enrollees are only responsible for the Part B deductible, which is $240 in 2024.

On the other end of the spectrum, Plan K only covers 50% of most Original Medicare out-of-pocket costs, until the beneficiary has spent $7,060 in 2024. (The trade-off is that Plan K will generally be a lot less expensive than Plan G in terms of monthly premiums.)

But all Medigap policies are designed to cover the big expenses that a person could rack up under Original Medicare alone. So they all cover the Medicare Part A daily hospital charges (after the deductible) and up to 365 additional days in the hospital after Original Medicare benefits are exhausted. And they all cover Medicare Part B coinsurance, up to three pints of blood, and hospice costs. (For most services, Plan K and Plan L only pay a percentage of the costs, until an enrollee has met a specified amount of out-of-pocket spending.)

What does Medigap not cover?

Medigap is designed to cover out-of-pocket costs for services that are covered by Original Medicare. So Medigap plans don’t pay for things like custodial care, prescription drugs, or routine denta, vision, or hearing care, since those are not covered by Original Medicare.

One exception is the fact that six of the ten types of Medigap coverage will pay a portion of the cost of emergency care outside the U.S., which is generally not covered at all by Original Medicare.

And as noted above, there is a lot of variation across the ten standardized Medigap plan designs. Depending on the specific care that a person needs, some of the plans could leave them with more out-of-pocket costs due to more limited overall coverage.

Who is eligible for Medigap?

You’re eligible to apply for Medigap if you have Medicare Part A and Medicare Part B. But under federal rules, Medigap is only guaranteed-issue (without medical underwriting) in a six-month window that starts when you’re at least 65 years old and enrolled in Medicare Part B. This is called the Medigap open enrollment period, and in many states it’s the only opportunity that most enrollees will have to select a Medigap policy without medical underwriting.

However, there’s also a trial right provision that allows a person to try a Medicare Advantage plan with the option to switch to Medigap (or back to Medigap) within the first year, guaranteed-issue. There are also other situations that result in a guaranteed-issue right to Medigap, but they are quite limited.

For many people, the Medigap open enrollment period starts the month they turn 65. But if you delay Medicare Part B because you’re still working, your Medigap open enrollment period would begin when you enroll in Medicare Part B.

If you’re under 65 and eligible for Medicare due to a disability, Amytrophic Lateral Sclerosis, or End Stage Renal Disease, the availability of Medigap will depend on the state where you live.

If your six-month Medigap open enrollment period has ended, you can still submit an application for Medigap at any time. But in most states, the insurer can use your medical history to determine your premium and eligibility for coverage.

How much does Medigap cost?

The monthly premiums for Medigap will depend on where you live, the plan you select, your age, and whether you’re eligible for guaranteed-issue coverage.

The benefits for Medigap policies are standardized: each letter-designed plan type provides the same benefits, regardless of which insurer offers it. But the insurers set their own prices and there’s considerable variation from one insurer to another.

Pricing will also depend on whether the insurer uses issue age rating, attained age rating, or community rating. (Some states have requirements around rating rules, while other states leave it up to the insurers.)

You can use Medicare’s Plan Finder tool to see what Medigap plans are available in your area and how much they cost.

If you’re older than 65, you’ll likely see somewhat higher prices, although it will depend on where you live and the insurer’s approach to pricing. If you’re under 65, you might find that Medigap premiums are drastically higher, depending on your state’s rules.

What are the different types of Medigap plans?

Medigap plans are standardized differently in Massachusetts, Minnesota, and Wisconsin. But in the rest of the country, plans are standardized with letter names. The currently available options are Plans A, B, C, D, F, G, K, L, M, and N. There are also high-deductible versions of Plan F and Plan G, which have deductibles of $2,800 in 2024.

(Plans C and F – including high-deductible Plan F – are only available to people who became eligible for Medicare before 2020.)

One important point to avoid confusion: Medicare also uses letters to designate the four parts of Medicare: Medicare Part A, Medicare Part B, Medicare Part C (Medicare Advantage), and Medicare Part D (prescription drug coverage). But those are not the same as Medigap Plan A, Plan B, Plan C, and Plan D. So if you’re talking about Medigap, it will be “Plan (letter)” whereas if you’re talking about the parts of Medicare, it will be “Part (letter)”

Each standardized plan has a specific set of benefits that do not vary from one insurer to another. This makes it easier for consumers to compare plan options once they’ve selected the benefit level they prefer.

There will still be variations in terms of initial pricing (including possible discounts), how rates are adjusted over time, available discounts for things like hearing aids, customer service, etc. But a Plan G offered by one insurer will cover the same Original Medicare out-of-pocket costs as a Plan G offered by any other insurer.

What is the most popular Medigap plan?

According to AHIP (America’s Health Insurance Plans) data, there were 14.6 million people with Medigap in 2021. Of those, 41% were enrolled in Plan F, and 32% were enrolled in Plan G. Those were by far the most popular options; the next was Plan N, with 10% of enrollees.

Plan F is the most comprehensive Medigap option, and has historically been the most popular choice. But enrollment has fallen in recent years as it is no longer available to people who weren’t already eligible for Medicare prior to 2020.

So the popularity of Plan G – the most comprehensive option available to new enrollees – has surged in recent years: It accounted for 17% of Medigap enrollees in 2018, and that had grown to 32% by 2021.

When is Medigap open enrollment?

Unlike other types of Medicare coverage, beneficiaries can apply for Medigap any time they like. But in most states, there is no annual open enrollment period for Medigap.

Instead, there’s a one-time six-month Medigap open enrollment period. It begins when a person is at least 65 years old and enrolled in Medicare Part B, and Medigap plans are guaranteed-issue during this window. Many states offer at least some variation of this for Medicare beneficiaries who are under 65. After that window ends, many enrollees will not have another guaranteed-issue opportunity to enroll in Medigap.

But some states have annual guaranteed-issue opportunities to enroll in Medigap or at least switch to a different plan:

  • In New York and Connecticut, Medigap plans are not medically underwritten, regardless of when an applicant enrolls. Legislation has been introduced in 2024 that would create a similar rule in New Jersey, but its future is uncertain.1
  • In Massachusetts, there’s an annual guaranteed-issue Medigap open enrollment period each year, from February 1 through March 31, with coverage effective in June. Insurers also have the option of offering continuous year-round open enrollment, and all of them were doing so as of 2024.2 Legislation has been introduced in South Carolina in 2024 that would create a one-month window each year during which all Medigap plans would be guaranteed-issue.3
  • In Maine, Medigap insurers must designate one month each year when Plan A is guaranteed issue, regardless of the applicant’s medical history. Legislation is under consideration in Iowa in 2024 to create a similar annual enrollment period during which each insurer must make at least one Medigap plan available on a guaranteed issue basis.4
  • Missouri‘s “anniversary rule” allows enrollees to switch from one Medigap insurer to another (as long as both plans are the same letter) on a guaranteed-issue basis during a window each year that extends for 30 days before and 30 days after the anniversary of when the plan was first purchased.
  • California, Idaho, Illinois, Oregon, Nevada, Louisiana, and Kentucky have “birthday rules” that allow Medigap enrollees a time-limited window around their birthday each year when they can switch, without medical underwriting, to another Medigap plan. This is generally limited to a plan with the same or lesser benefits (in Illinois and Louisiana, this is also limited to a plan offered by the enrollee’s current Medigap insurer; in Kentucky, it’s limited to the enrollee’s same policy offered by another insurer).
    Iowa lawmakers are considering legislation in 2024 that would create a “birthday rule” starting in 2025, which would allow an applicant to select any available plan on a guaranteed-issue basis.5 Lawmakers in South Dakota6 are also considering a “birthday rule” bill in 2024 that would allow Medigap enrollees to switch to a plan with equal or lesser benefits. Similar legislation was introduced in Virginia in 2024 but did not advance.7
  • Washington and Oklahoma allow those already enrolled in Medigap plans to switch to another Medigap plan at any time, as long as they’ve had coverage for at least 90 days. In Washington, enrollees with Medigap Plan A are limited to switching to only another Plan A. But people with Medigap Plans B through N can switch to any other Plan B through N. In Oklahoma, enrollees are allowed to switch to any plan with equal or lesser benefits.

California lawmakers are considering legislation in 2024 that would create an annual open enrollment period for Medigap, starting January 1 and continuing for 90 days.8 If enacted, this would take effect starting in 2025. As noted above, California already has a “birthday rule” that allows people who already have Medigap to switch to a different plan that offers equal or lesser benefits. But the 90-day annual enrollment period would apply to all applicants (including those who are not yet enrolled in Medigap) and all plans.

What is the downside to Medigap plans?

For most enrollees considering their Medicare coverage options, the downside to Original Medicare plus Medigap is the higher monthly premium (for Medigap as well as Medicare Part D prescription drug coverage, which has to be purchased separately) when compared with Medicare Advantage.

And for some enrollees, the fact that Medigap policies don’t include the “extras” that are usually offered on Medicare Advantage plans (e.g. dental and vision coverage, fitness club memberships, etc.) can also be a downside.

If I move out of state, can I keep my Medigap plan?

Yes, you can keep your Medigap policy if you move to a different state, unless you have a Medicare SELECT policy and will be moving out of its coverage area. (That will trigger a guaranteed-issue right to purchase a different Medigap policy in your new area.)

Assuming you don’t have Medicare SELECT and will be able to keep your plan, you just need to notify the insurer of your new address. Be aware that your premiums might change once you move.

You have the option to apply for a new Medigap policy when you move, since Medigap applications can be submitted anytime. But in most states, the new insurer would be able to base your eligibility and premiums on your medical history.

What is the Medigap pre-existing condition waiting period?

When you enroll in a Medigap policy – even during your Medigap open enrollment period – the insurance company does not have to cover pre-existing conditions for the first six months. However, you can shorten or eliminate this waiting period if you’ve had continuous creditable coverage prior to enrolling in the Medigap policy. (Continuous means you didn’t have a break of more than 63 days in the coverage.)

For each month that you had creditable coverage prior to enrolling in the Medigap plan, your pre-existing condition waiting period is shortened by a month. So if you had at least six months of continuous creditable coverage, your pre-existing condition waiting period would be eliminated and the policy would cover pre-existing conditions as soon as your plan takes effect.

If you didn’t have creditable coverage prior to your enrollment in Medigap, your Original Medicare will still cover pre-existing conditions. But your Medigap plan can deny claims related to the pre-existing conditions during your waiting period, which would mean you’d have to pay the Original Medicare out-of-pocket costs yourself until the waiting period was over.

Footnotes
  1. New Jersey Bill A3536 and New Jersey Bill S2030. BillTrack50. Introduced February 2024. 
  2. Medicare Supplement Plans Offered in Massachusetts 2024. Mass.gov. November 2023. 
  3. South Carolina Senate Bill 952. BillTrack50. Introduced January 2024. 
  4. Iowa HF462. BillTrack50. Passed Iowa House in March 2023; in Iowa Senate committee in January 2024. 
  5. Iowa S.F.2081. BillTrack50. Introduced January 2024 
  6. South Dakota HB1108. BillTrack50. Introduced January 2024 
  7. Virginia HB64. BillTrack50. Introduced December 2023. 
  8. California SB1236. BillTrack50. In Committee, February 29, 2024. 
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