En español | Even though Medicare covers the bulk of your medical expenses after you turn 65, you’ll still find some gaps in its coverage. A Medicare supplement policy, also called Medigap, can cover many of these expenses:
- Deductibles. Expect to pay a certain amount out of pocket every year before Medicare Part A and Part B coverage kicks in: $1,600 for Part A if a patient is admitted to the hospital and $226 for Part B in 2023.
But deductibles aren’t all of it. You’ll still have to ante up a portion of the costs for doctors’ services, long stays in either a hospital or a skilled nursing facility, medical equipment, outpatient care and other services.
- Copayments. The set fee you pay for any health service you use, such as $25 for a doctor visit.
- Coinsurance. The percentage of a total bill that you will owe for a service or medical equipment, such as 20 percent for an outpatient procedure.
Medicare will pay its share of the Medicare-approved amount for your health care expenses first. Then your Medigap kicks in to help cover your portion of the costs. You’ll pay a monthly premium for your Medigap plan in addition to premiums you pay Medicare for Part A or Part B.
Private insurance companies sell Medigap policies, and you’ll pay your premium to the one you choose, but federal and state governments regulate Medigap plans. A big plus for Medigap, in contrast to private Medicare Advantage plans, is that you can use any doctor or hospital that accepts Medicare.
What do Medigap policies offer?
They pay the coinsurance. All Medigap plans cover the 20 percent Part B coinsurance you otherwise would pay yourself for physician visits and other outpatient services. They also cover the Part A coinsurance costs for inpatient hospital stays.
Medicare covers the first 60 days as an inpatient in a hospital, but you’re responsible for paying the coinsurance for days 61 to 90 ($400 in 2023) and an $800 daily coinsurance after that for up to 60 lifetime reserve days in 2023. You can use a lifetime reserve day only once, but you may apply the days to different benefit periods. A benefit period begins the day you’re admitted as an inpatient to a hospital or skilled nursing facility and ends when you haven’t received any inpatient hospital or skilled nursing facility care for 60 days in a row.
They cover some deductibles. Most Medigap plans cover the Medicare Part A hospital deductible, which is $1,600 per benefit period in 2023.
They add health benefits. Although Medicare won’t cover your hospital stay after you’ve used up your lifetime reserve, all Medigap policies cover the daily coinsurance costs and up to 365 additional lifetime days in the hospital after your Medicare benefits are depleted. All Medigap plans also cover the first three pints of blood you may need each year, either in full or in part.
They may cover other costs. Some plans pay coinsurance costs for skilled nursing facilities and hospice care; excess charges from doctors who don’t accept assignment, which means they can charge up to 15 percent more than the Medicare-approved amount; and foreign travel health care emergencies.
How will I know what plans offer the benefits I need?
It all comes down to the series of letters that designate each plan. In 1992, the federal government standardized the types of Medigap plans insurers can offer nationwide.
Today you have 10 options by letter: A, B, C, D, F, G, K, L, M and N. Every plan with the same letter designation must include the same coverage, though premiums can vary from company to company.
Even though the letter system offers standardized plans, it can be confusing. Plans C and F are not available to new Medicare enrollees, only those who were eligible for Medicare before Jan. 1, 2020. Those older than 65 who haven’t yet enrolled in Medicare can still buy those plans when they decide to sign up.
In the past, Plan F had been the most popular Medigap policy. But a federal law passed in 2015 now prohibits Medigap plans from covering the Medicare Part B deductible, and the same law also affected Plan C. If you’re looking for a similar Medigap policy, Plan G is the same as Plan F but complies with federal law by not paying for the Part B deductible.
Plans K, L, M and N have some cost sharing, often in return for lower premiums.
And if you live in Massachusetts, Minnesota or Wisconsin, those three states created different systems for their plans.
When can I buy a Medigap policy?
No time restrictions. You can buy a Medigap policy anytime after signing up for Medicare Part A and Part B. Medigap plans have no annual open enrollment period like Medicare Part D and Medicare Advantage plans. But Medigap insurers can reject you or charge more because of preexisting medical conditions unless you apply at certain times.
Some special considerations. The best time to buy a Medigap policy if you’re 65 or older is within the six-month period that starts the first day of the month you enroll in Medicare Part B. During this time, insurers must offer you all the Medigap policies available in your area at the best rates for your age.
You also have several guaranteed issue rights, which means that you can buy a Medigap policy regardless of your health and under specific situations.
State differences. Your state may also have other periods when you can buy Medigap policies without any health questions. Where you live can make a difference.
In Connecticut, Massachusetts and New York, you can buy a Medigap policy at any time regardless of preexisting conditions. A few states let you switch policies without health questions during certain times of the year.
Contact your State Health Insurance Assistance Program (SHIP) or your state insurance department to find out more about your state’s rules.
Keep in mind
Shop around. When looking for a Medigap policy, first decide which letter plan you want. Then compare premiums for the policies available in your area.
Premiums can vary significantly by insurer, even though each plan with the same letter designation must have the same coverage. If you’re eligible for guaranteed issue rights, you can use Medicare’s Medigap Plan Finder to see premium estimates for each plan in your area based on your age, gender, smoking status and zip code.
Also understand a plan’s pricing structure:
- Attained-age policies have regular premium increases based on age and inflation.
- Community-rated policies charge the same premium to everyone with the same policy, regardless of age.
- Issue-age policies base premiums on your age when you buy the policy and can increase because of inflation.
Remember prescriptions. Medigap plans don’t cover drugs, so you’ll need a separate Part D prescription plan to help cover those expenses. You may have to pay a late enrollment penalty if you don’t sign up for Part D when you’re first eligible and don’t have similar prescription drug coverage from another source, such as a retiree health insurance plan.
Medigap and Medicare Advantage don’t mix. If you choose to get your coverage from a private Medicare Advantage plan rather than original Medicare, you can’t sign up for a Medigap policy, too.
It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage plan unless you’re in the process of switching to original Medicare. Most Medicare Advantage plans provide health and prescription drug coverage.
Updated January 20, 2023
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