Medigap Insurance
Medigap (Medicare Supplement Insurance) is standardized private health insurance sold by state-licensed insurers to fill the cost-sharing gaps in Original Medicare — including deductibles, coinsurance, and copayments — providing predictable out-of-pocket expenses for beneficiaries who choose to remain in the traditional fee-for-service Medicare program.
Original Medicare (Parts A and B) is not comprehensive coverage — it leaves beneficiaries exposed to significant cost sharing including the Part A hospital deductible (reset per benefit period rather than annually), Part B coinsurance of 20% with no out-of-pocket maximum, and various copayments and skilled nursing facility coinsurance. Medigap policies, regulated by the federal government and standardized into lettered plan types (A, B, C, D, F, G, K, L, M, N), fill these gaps with varying levels of comprehensiveness depending on the plan chosen.
Plan G is currently the most comprehensive option available to new enrollees (Plan F, which was even more comprehensive, was eliminated for new beneficiaries starting in 2020 as a mechanism to encourage beneficiaries to be cost-conscious about Part B utilization). Plan G covers the Part A deductible, skilled nursing facility coinsurance, Part B coinsurance, foreign travel emergency care, and excess charges above Medicare-approved amounts from physicians who do not accept Medicare assignment. The only gap Plan G leaves is the Part B annual deductible ($257 in 2025), which beneficiaries pay directly.
Medigap policies require payment of a separate monthly premium in addition to the Part B premium. Premiums vary significantly by insurance company, location, age, and the rating methodology used. Community-rated policies charge the same premium regardless of age, meaning younger enrollees subsidize older ones — premiums remain stable over time in nominal terms. Issue-age rated policies base premiums on age at enrollment — lower initially but nominally stable with no age increases. Attained-age rated policies increase as the insured ages, starting lower but potentially becoming expensive late in life.
Enrollment timing is critical. During the Medigap Open Enrollment Period — the six months beginning when a beneficiary is both age 65 or older and enrolled in Part B — insurers must offer all available Medigap plans at standard rates without medical underwriting. Outside this window, insurers in most states can use medical underwriting to decline coverage or charge higher premiums based on health status. Beneficiaries who switch from a Medicare Advantage plan back to Original Medicare outside special enrollment protections may face similar underwriting exposure.
Medigap policies do not include prescription drug coverage — Part D must be purchased separately. They also cannot be used with Medicare Advantage plans; beneficiaries must choose between the two approaches to supplementing Original Medicare.