What is Medigap? Your guide to Medicare supplement insurance

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.)

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 $226 in 2023.

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 $6,940 in 2023. (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.)

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.

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.

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.

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 $2,700 in 2023.

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

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.

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 there are some states that 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.
• In Massachusetts, there’s an annual guaranteed-issue Medigap open enrollment period each year, from February 1 through March 31.
• In Maine, Medigap insurers must designate one month each year when Plan A is guaranteed issue, regardless of the applicant’s medical history.
• 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, and Louisiana 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 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). Kentucky will join them as of 2024, but with plan changes limited to the enrollee’s same policy offered by another insurer.
• 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.

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.

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.

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.