Medigap can seem mystifying. With 10 different Medigap plans and multiple insurers offering each of them, selecting the best of the bunch can appear challenging. But it really isn’t, says Medicare specialist Lauren Bigham Steele.
Shoppers really need to consider just two of the plans available—Plan G and Plan N (more about these below).* And while many different insurance companies sell Medigap policies, there’s virtually no difference between their coverage—choosing among providers largely boils down to comparing their premiums.
Bottom Line Personal asked Bigham Steele what people in or nearing Medicare eligibility need to know about choosing a Medigap plan…
What Is Medigap Insurance?
Medigap, also known as Medicare Supplement Insurance, fills many of original Medicare’s coverage gaps. Those gaps can be substantial. Example: Medicare Part B, the component of Medicare that covers things like doctors’ appointments and outpatient care, often leaves patients on the hook for 20% of bills after they’ve met their deductible. Most Medigap plans will pay that 20%, as well as cover a range of other co-pays, co-insurance, deductibles and more. The downside of Medigap coverage is its cost. Monthly premiums—which vary dramatically based on your age, state, gender and other factors as well as which Medigap plan is selected— often exceed $100 or even $200 per month.
Medigap sometimes is confused with Medicare Advantage, but these are very different coverage options. A Medicare Advantage plan replaces original Medicare and restricts participants to a network of providers…while a Medigap plan is used in conjunction with original Medicare and covers costs from any health-care provider that accepts Medicare.
Picking the Best Medigap Plan
There are 10 Medigap plans listed on the Medicare website—Plans A, B, C, D, F, G, K, L, M and N. But of these, two—plans C and F—are available only to people who became Medicare eligible on or before January 1, 2020…and six others—A, B, D, K, L and M—each attract 1% or less of Medigap enrollees. These six plans are so unpopular that the insurance companies that sell Medigap policies rarely bother to offer them at attractive premiums—consumers almost always get more for their money if they choose one of the popular Medigap plans instead, which means either G or N (or potentially F, if they’re eligible).
Plan G is the Cadillac of currently available Medigap plans—it covers virtually all of the co-pays, co-insurance and other out-of-pocket health costs that original Medicare participants are likely to face, with the exception of the Part B deductible, which is $257 in 2025. (Part A is hospitalization…Part B covers doctor visits…Part D covers medications.) Plan G even covers 80% of the cost of emergency care during foreign travel.
Rate examples for Plan G: In Texas, a relatively low-cost Medigap state, a 65-year-old woman recently could obtain a Part G plan for as low as approximately $110 per month…a 72-year-old for about $125. For a man in Texas, those rates were around $20 higher, respectively. Note that those are the lowest rates recently available in Texas—someone who didn’t shop around could end up paying more. In Maine, where Medigap rates are higher, the lowest Plan G rate recently was nearly $220, regardless of age or gender.
Plan N is a lot like Plan G, including its coverage for emergency care during foreign travel. But its premiums tend to be somewhat lower and people who choose it have relatively modest co-pays—up to $20 for some medical office visits and up to $50 for some emergency room visits. One additional difference: Unlike Plan G, Plan N doesn’t cover all “excess charges.” What this means: If a patient with Plan N obtains care from a provider that doesn’t accept Medicare-approved rates, that patient could end up with an out-of-pocket bill after all. Most providers do accept Medicare rates, so excess charges are relatively uncommon…but they can be a source of stress even for people who never have to pay them. Example: A patient who is scheduled for surgery might spend hours trying to confirm that everyone involved in the procedure accepts “Medicare assignment,” including the surgeon, the hospital, the anesthesiologist, the lab handling the blood work and more.
Rate examples for Plan N: In relatively low-cost Texas, a 65-year-old woman can obtain Plan N for just under $90 per month…a 72-year-old woman for less than $100. For a man, those figures are about $20 higher, respectively. In higher-cost Maine, Plan N recently cost just over $200 per month regardless of age or gender.
Two other plans worth describing …
Plan F, available only to people who reached Medicare eligibility by the start of 2020, is almost exactly like Plan G, except Plan F covers Medicare’s annual Part B deductible.
Plan A isn’t a popular choice…but in some states, it’s the only Medigap plan available to people on Medicare prior to age 65, perhaps due to disability. Plan A covers Medicare Part A coinsurance and Part B copays and co-insurance…but it does not cover the Part A deductible, Part B excess charges, skilled nursing facility care or any portion of emergency foreign travel medical costs.
Picking a Provider
There’s no need to get bogged down choosing among the various insurance companies that offer the Medigap plan you want in your state. Medigap plans are standardized, which means that a Plan G offered by Aetna will provide precisely the same coverage as a Plan G offered by UnitedHealthcare, for example. Some Medigap shoppers gravitate toward policies offered by big-name insurance companies that they trust, but that’s not necessarily wise—that big-name company’s coverage isn’t likely to be any better than a lesser-known company’s, but big-name Medigap providers often charge higher rates.
Before choosing the absolute lowest rate offered for the Medigap plan you want, it’s also worth considering…
The issuer’s rate-increase track record
The premiums you pay in your initial year with a Medigap plan aren’t the only premiums that matter. The amount you’re charged for the plan in future years affects your retirement budget, too. It’s impossible to predict future rate increases with any certainty, but the pace at which an insurer has increased its rates in recent years can be a clue to what’s to come. Ask an insurance broker experienced with Medigap plans whether any of the companies offering competitive rates on the Medigap plan you want have particularly good or bad track records when it comes to rate increases. Keep in mind that it’s not unusual for rates to increase 5% to 7% per year on average.
The issuer’s financial strength and customer-satisfaction scores
Ask an insurance broker whether any of the Medigap policy issuers you’re considering are known for having notably good or bad customer service…and/or whether any of them are in a troubling position financially. Or enter the insurance company name into a search engine along with words like “rating” or “customer satisfaction” to find ratings.
Household discounts
Some Medigap issuers offer significant discounts—potentially 10% to 15%—when two people living at the same address both enroll in one of its Medigap plans. Each carrier has a different rule—some allow you to have different carriers, and some require the same. Sometimes both people don’t even need to enroll—it’s enough that two adults live at the address.
Related: If you divide your year between homes in different states, the state in which you can enroll in a Medigap plan is the one that the Social Security Administration considers your primary residence. Which state that is could affect your Medigap premiums, but it won’t affect your coverage—Medigap plans can be used nationwide.
To find a qualified insurance broker to help with these Medigap decisions: Search online, or ask friends and family.
The Open-Enrollment Misconception
Medicare’s annual open-enrollment period runs from October 15 through December 7 each year—but that does not mean that Medicare recipients have an opportunity to sign up for or change Medigap plans every year. The only time most people are guaranteed to be able to enroll in the Medigap plan of their choice is during the six-month “Medigap Open-Enrollment Period” that starts on the first day of the first month in which they are enrolled in Medicare Part B and also are 65 or older. There will be other opportunities to apply for Medigap coverage or change plans after this six-month window closes, but in most states and in most situations, insurance companies will have the right to reject those applications based on preexisting medical conditions during any future enrollment window.
Strategy: Don’t delay the Medigap decision—decide whether you want it during your six-month open-enrollment period. When choosing between Medigap plans, make your choice based on the coverage you want to have for the remainder of your life, not just for the upcoming year. If you’re extremely healthy at age 65, for example, it might not seem worth paying the steep Medigap Plan G premiums at the moment—but if you don’t sign up for Plan G during your initial open-enrollment period, you might not be able to get Plan G at all.
*Massachusetts, Minnesota, and Wisconsin have different Medigap plans than the rest of the country.
