What Is Medigap Insurance?

Have you ever thought about what Medigap insurance is? How much will is cost you, and how can it be advantageous for you? Let us find out.

Are you questioning what is Medigap insurance? Medigap is also alluded to as a Medicare supplemental insurance. A Medigap strategy, sold by private insurance organizations, can help pay some medical services costs (gaps’) Original Medicare does not cover, Medicare deductibles, coinsurance and some additional benefits, for example, care when you travel outside the U.S. You make some one-time six months long Medigap open enrollment period that begins the first month you turn 65 and selected Part B. This period gives you an ensured option to purchase any Medigap strategy sold in your state paying little heed to your health status.

On the off chance that you have Original Medicare and you purchase a Medigap policy, Medicare will pay a lot of the Medicare-endorsed sum for took care of medical services costs first. At that point your Medigap policy pays a lot of covered benefits. Each Medigap policy should observe government and state laws intended to secure you, and it should be obviously recognized as Medicare supplemental insurance. Insurance organizations that sell Medigap can just sell you ‘standardized’ Medigap arrangements, identified in many states by letters. All Medigap plans offer similar essential benefits yet some offer extra benefits. Plans recognized by a similar letter, cover similar benefits paying little heed to what organization sells it.

Medigap insurance definition

Medigap, additionally called Medicare Supplement Insurance, is a health care insurance inclusion given by privately owned businesses intended to pay for costs not covered by Original Medicare. Contingent upon which plan you get, these expenses may incorporate co-payments, coinsurance, and deductibles, along with services Original Medicare does not cover, like travel outside the U.S.

What is a Medigap insurance policy?

Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by privately owned businesses (as mentioned above). Original Medicare pays for a lot (but not all) of the cost for covered medical care administrations and supplies. A Medicare Supplement Insurance (Medigap) strategy can help pay some excess medical care costs, such as:

  • Co-payments
  • Coinsurance
  • Deductibles

Some Medigap policies likewise cover benefits that Original Medicare does not cover, similar to clinical care when you travel outside the U.S. In the event that you have Original Medicare and you purchase a Medigap policy, this is what occurs:

  • Medicare will pay a lot of the Medicare-endorsed sum for covered medical care costs.
  • Then, your Medigap policy pays its offer.

Be that as it may, Medigap policies for the most part do not cover long term care, vision or dental consideration, hearing aids, eyeglasses, or private-duty nursing. Here are 8 things to keep in mind concerning Medigap policies:

  1. You should have Medicare Part A and Part B.
  2. A Medigap policy is not quite the same as a Medicare Advantage Plan. Those plans are approaches to get Medicare benefits, while a Medigap policy just enhancements your Original Medicare benefits.
  3. You pay the private insurance organization a monthly premium for your Medigap policy. You will pay this monthly expense along with the monthly Part B premium that you pay to Medicare.
  4. A Medigap strategy just covers one individual. In the event that you and your spouse both need Medigap insurance, you will each need to purchase separate policies.
  5. You can purchase a Medigap policy from any insurance company that is authorized in your state to sell one.
  6. Any standardized Medigap policy is ensured renewable, regardless of whether you have medical conditions or health related issues. This implies that the insurance company cannot drop your Medigap policy as long as you are paying the premium.
  7. Certain Medigap policies that have been sold in the past cover prescription drugs. However, Medigap policies that were sold after January 1, 2006, were not permitted to incorporate prescription drug inclusion. In the event that you require a prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D). On the off chance that you purchase Medigap and a Medicare drug plan from the same insurance organization, you may have to make 2 separate premium payments. Get in touch with the company to figure out how to pay your premiums.
  8. It is not legal for anybody to sell you a Medigap policy on the off chance that you have a Medicare Advantage Plan, except if you are reverting to Original Medicare.

Understanding Medigap Insurance

Original Medicare — characterized as Parts A and B — will not cover all costs related to a disease or a health issue. Medigap policies are intended to cover all, or a bit of those additional charges, contingent upon the sort of coverage, but they usually do exclude long term care, vision, dental consideration, hearing aids, eyeglasses, or private nursing. Albeit private insurance companies offer Medigap coverage, the federal  government expects companies to offer standard policies. You have 12 options which include: Plans A, B, C, D, F, F-High Deductible, G, G-High Deductible, K, L, M, and N. However, plans C, F, and F-High Deductible are not, accessible for the individuals who became qualified for Medicare in 2020 and after. This is on the grounds that these plans cover the Medicare Part B deductible, the sum you need to pay before coverage kicks in, which is $203 in 2021.

Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, which denied such coverage. The aim was to make individuals pay at least a little for medical services to keep them from running directly to the doctor for each scratch, scrape, headache, or sniffle. Luckily, the individuals who are as of now joined up with plans C, F, and F-High Deductible will actually want to keep them moving forward. Moreover, individuals qualified for Medigap before Jan. 1, 2020, who did not select an arrangement may in any case have the option to get them. For Medigap plans, the most common options are F and G.

Medicare Plan F

This is the most comprehensive arrangement and has been the most popular decision for quite a long time. The average monthly cost for the most well known Medigap F Plan is roughly $326. However, as of January 1, 2020, Plan F is not accessible to individuals who recently became qualified for Medicare. Individuals who as of now have Plan F will actually want to keep it, and individuals who were qualified for Medicare before 2020 but did not have a Medigap plan might be permitted to get Plan F if they want to.

Medicare Plan G

This arrangement will probably supplant Plan F in popularity, as it has essentially a similar coverage aside from repayment of the Part B deductible — an advantage that is not included anymore for any plans offered to Medicare individuals who are starting from 2020. The average Plan G ought to be less expensive than Plan F. Nonetheless, costs can generally change according to a candidate’s zip code, tobacco use, and gender, and they increment with age.

How much is Medigap per month?

The national average cost for Medigap Plan F is $1,712 every year, which is approximately $143 per month. Medigap Plan F is the most reasonable in Hawaii, with an average yearly cost of just $1,310 every year, or approximately $109 per month. In Massachusetts, it is a lot more expensive with the average yearly cost of Medigap Plan F being $1,947, which is approximately $162 per month.

Now the question that people usually ask themselves is how do insurance companies decide Medicare Supplement insurance plan costs and charges? Insurance companies can choose the premium costs for the Medicare Supplement insurance policies they offer. They can utilize any of three different ways to decide what the premium costs are going to be. The strategy that insurance companies use to reach their premiums can influence your costs temporarily or in the long term. The following methods are the way the rating systems work.

  • Community rating: By and large the premium is priced in such a way so that every individual who buys a Medicare Supplement insurance plan of a specific sort pays the same premium every month. After some time, premiums may increment due to inflation and other different elements. However, they will not change due to your age.
  • Issue-age rating: The premium you pay depends on your age when you purchase the Medicare Supplement insurance plan. Premiums are lower in the event that you buy the Medicare Supplement insurance plan when you are 65 years old, as compared to if you wait until you are older. After some time, premiums may increment due to inflation and other different elements. However, they will not increase on account of your age.
  • Attained-age-rating: The premium you pay depends on your present age. Purchasers who are younger may discover Medicare Supplement insurance plans that are evaluated this way, entirely reasonable to afford. However, after some time, these plans may become pricey on the grounds that your premium increments as you become older. Premiums may likewise increase on account of inflation and other different variables.

In the event that you would prefer to enroll in a Medigap plan, it is critical to compare various different policies that are offered around there. This can assist you with deciding how premiums are set and the amount you can hope to pay each month. The Medigap monthly premium is paid notwithstanding other monthly premiums related to Medicare. These can incorporate premiums for:

  • Medicare Part A (hospital insurance), if applicable
  • Medicare Part B (medical insurance)
  • Medicare Part D (prescription drug coverage)


Medigap itself is not ordinarily connected with a deductible. Nonetheless, if your Medigap plan does not cover the Part A or Part B deductible, you are still liable for paying those. Medigap Plan F and Plan G do have a high-deductible alternative. The monthly premiums for these plans are ordinarily lower, yet you will need to meet a deductible before they begin to cover costs. For 2021, the deductible is $2,370 for these plans.

Coinsurance and co-pays

Like deductibles, Medigap itself is not related to coinsurance or co-pays. You may in any case need to pay certain coinsurance or co-pays related to Original Medicare if your Medigap policy does not cover them.

Out-of-pocket limit

Medigap Plan K and Plan L have cash based limits. This is the maximum sum that you will need to pay using cash on hand. In 2021, the Plan K and Plan L cash based limits are $6,220 and $3,110, respectively. After you meet the limit, the arrangement pays for 100% of covered services for the remainder of the year.

Out-of-pocket costs

Medigap does not cover certain health-related services. In case you need to use them, you would have to pay for them out of your own pocket. These services are:

  • prescription drug coverage
  • hearing aids
  • dental
  • private nursing care
  • long-term care
  • vision, including eyeglasses

The cost of your Medigap policy may likewise rely upon whether the insurance company:

  • offers discounts (like discounts for women, non-smokers, or married individuals; discounts for paying annually; discounts for paying your premiums through electronic funds transfer; or discounts for having multiple policies from the same company).
  • utilizes medical underwriting, or applies an alternate premium when you do not have a guaranteed issue right (also known as “Medigap insurances”), or are not in a Medigap Open Enrollment Period.
  • sells Medicare SELECT policies that may expect you to utilize certain providers. On the off chance that you purchase this sort of Medigap policy, your premium might be less.
  • offers a ‘high-deductible option’ for Plans F or G. On the off chance that you purchase Plans F or G with a high-deductible option, you should pay the first $2,340 of deductibles, co-payments, and coinsurance not paid by Medicare, before the Medigap policy pays anything. You should likewise pay a different deductible ($250 each year) for foreign travel emergency services.
  • On the off chance that you purchased your Medigap Plan J before January 1, 2006, it actually covers prescription medications, you would likewise pay a different deductible ($250 each year) for prescription medication covered by the Medigap policy. Also, in the event that you have a Plan J with a high deductible option, you should pay the first $2,340 before the policy pays anything.

The time-frame when you apply for a Medicare Supplement insurance plan can influence your cash based costs. In the event that you apply during the Medicare Supplement Insurance Plan Open Enrollment Period, you cannot be turned down for insurance coverage due to an ailment. This period starts in the month you are both, 65 years of age and enrolled in Medicare Part B, and goes on for half a year. On the off chance that you apply during this period, you are not needed to go through medical underwriting, which can prompt a higher premium cost in the event that you have ailments at the time you apply. Be that as it may, at times there might be a waiting period before coverage starts.

The benefit coverage of the Medicare Supplement insurance plan you pick likewise influences the premium you will pay. For instance, you could possibly enroll in a high-deductible option for Medicare Supplement insurance Plan F. Assuming this is the case, the premium for the high-deductible arrangement will normally be lower than the premium for the standard Plan F. Nonetheless, beneficiaries who got qualified for Medicare on January 1, 2020, or later cannot purchase Medicare Supplement Plan F or Plan C, since they cover the Part B deductible. In any case, in the event that you already have Medicare Supplement Plan C or F, you can keep it. Additionally, you might have the option to pay a lower premium from a Medicare SELECT plan (a sort of Medicare Supplement insurance plan) since it expects you to utilize certain providers contracted with the insurance company.

Are Medigap plans worth the cost?

Medigap plans can frequently have a precarious monthly premium. Are these plans worth the cash? Contingent upon your medical services needs, a Medigap policy can be a beneficial speculation. In the event that you choose to get a Medigap policy, the best opportunity to enroll is during the six-month Open Enrollment Period. In case you are going to turn 65, your Medigap Open Enrollment period begins on the first day of the month in which you will turn 65. During that time, you can buy any Medigap policy sold in your state, regardless of whether you have medical problems (a few companies call these preexisting conditions).

When choosing whether Medigap insurance is worth the cost, consider your regular cash based costs. Original Medicare does not have an out-of-pocket maximum, which means abandoning a Medigap policy can represent a tremendous monetary risk. In the event that you need constant care for a persistent condition or have a solitary significant health crisis, you could be on the snare for a great many dollars. Remember Medigap arrangements do exclude prescription medication coverage. In the event that you need coverage for prescription drugs, you will need to buy a different Medicare Part D plan and pay an extra monthly premium.

Advantages of Medigap plans

Deductible instead of Co-pays

A Medicare Supplement plan may have a premium and a little deductible, yet in any case it is 100% coverage. Original Medicare and Medicare Advantage plans have obscure cost sharing and co-pays for clinical services, respectively.

Doctors List

Medicare Supplement plans permit you to see any doctor who acknowledges original Medicare. This is a nationwide doctor’s list. This is considerably more comprehensive than a Medicare Advantage plan. The only larger doctors list would be through private insurance companies, for instance a group health plan through a company. Premiums for this sort of plan for a 65+ year old are much of the time in the $1,000+ range per month.


When you are outside your insured issue period you cannot buy a Medicare Supplement plan without responding to health questions. There are specific exemptions for this standard, yet they seldom apply. For most individuals who are beyond 65 years old, and are not on a Medicare Supplement today, they will not meet the requirements for one later on.

Total Cost

Generally speaking, the cost to buy a Medicare Supplement and a prescription medication part D plan is still moderately low. There are 3 extra costs while going on to Medicare. First is the part B premium sum. The government collects this sum, and it is unavoidable whether you are on original medicare, a Medicare Advantage plan or a Medicare Supplement plan. The second cost is simply the Medicare Supplement plan. The third is the cost of the prescription drug plan (Part D). Even in the wake of including each of the 3 of these costs, most customers are still paying fairly below half of the cost of a private insurance plan.

Quick overview of the pros:

  • Plans cover all or part of Medicare extra fee
  • Plans are not difficult to compare
  • Guaranteed six-month enrollment period when first qualified
  • All plans offer an extra 365 days in hospital
  • A few plans offer extras like abundance charges, foreign travel, and Silver Sneakers program
  • Coverage is available all across the country

Disadvantages of Medigap plans


Medicare Supplement plans have a premium. This is a monthly cost you pay for the clinical arrangement. All in all (2020, Washoe County Nevada, 65-year-old) a plan G may cost about $130 each month. On the other hand, numerous Medicare Advantage plans that have no premium at all.

Dental & Vision

Dental and vision is generally excluded. For an extra premium, Anthem offers an option dental plan on their Medicare Supplement plans. Most different companies do not specify dental and vision in their applications by any means. Numerous Medicare Advantage plans cover dental and vision. Various other services may incorporate a stipend for hearing aids and rides to and from the doctors’ office.


Medicare Supplement plans have a deductible. In the event that you were qualified for Original Medicare parts A and B before 1st January 2020, you might not have a deductible since you might be on a Medicare Supplement plan F. Nonetheless, anybody qualified after 1st January 2020, cannot buy a plan F. The following most ideal alternative is a plan G. The only difference between plan F and plan G is you are liable to pay your part B deductible. For 2020 this sum is $198 yearly.

Access to Doctors

Access to new doctors might be more restricted. Medicare Supplement plans permit you to see any doctor who acknowledges and accepts original Medicare. At the point when a doctor chooses to acknowledge a patient on Medicare, they additionally consent to charge the patient nothing more than Medicare reimburses. The doctor needs to acknowledge Medicare rates as payment in full. More often than not, these Medicare rates are well underneath what they would charge others who have private insurance. It is as yet a free market, and Medicare cannot forcefully ask doctors to acknowledge their rates. Therefore, numerous individuals with Medicare may think that it is harder to plan meetings with doctors. Most providers will continue seeing established patients switching to Medicare, however, may not take on new patients. This is not a direct inconvenience of Medicare Supplement Plans, however, is more of a general disadvantage of Medicare when compared to private insurance. Overall, Medicare Advantage plans have the most restrictive doctors.

Changing Plans

Insurance companies expect candidates to pass health inquiries to switch Medicare Supplement plans. Every year, between 15th October and 7th December, Medicare open enrollment takes place. What is not notable is that this is open enrollment for Medicare Advantage plans and Medicare part D prescription drug coverage. There is no open enrollment for Medicare Supplement plans. The best way to buy a Medicare Supplement plan is to either buy one when you turn 65, or by answering health questions. The health questions are exacting, and they oftentimes deny candidates with any negative health history.


Medicare Supplement plans do exclude prescriptions. Medicare has a different part that covers prescriptions called Medicare Part D. For all intents and purposes, it is acceptable that the medical plan and prescription drug plan are not indeed the very same. As mentioned before, when you pick a Medicare Supplement plan, health questions are needed in order to change to another Medicare Supplement plan. Individuals can change their part D coverage each year between 15th October and 7th December. It is incredible to have the option to change plans each year dependent on the individuals changing prescription drug needs.

Price Changes

Medicare Supplement premiums increment every year. Rates increment for 2 reasons. To begin with, insurance companies decide the rate dependent on the age of the member when they start the policy. Rates are lower for people who are younger, and increment as we age. A few companies offer a rate lock for the initial 2 to 4 years, which means that during this time the rates will not change. The second explanation – insurance companies as a rule add on another 2% to 4% for medical inflation. This will be along with any increment dependent on the individuals age. In general these are still moderately low numbers when compared to plans for people buying private insurance.

Quick overview of the cons:

  • Monthly premiums can be expensive
  • Hard to switch once enrolled
  • Might be unable to enroll after the initial enrollment period
  • Not all plans cover hospital deductible
  • Excludes drug coverage
  • Does not cover acupuncture


It is imperative to consider how much inclusion you need from a Medicare Supplement insurance plan before you make a choice, since some Medicare Supplement insurance plans will in general have higher premiums than others. In the event that you are keen on buying a Medicare Supplement insurance plan offered by an insurance organization, it is smart to ask yourself what rating system they used to set their premiums. This data may give you a certain understanding into whether you would get the best incentive for the inclusion the insurance organization offers, on the off chance that you bought it today. Moreover, by conversing with the insurance organization or its agent, you may find out about discounts or value-added services offered by the insurer, that lessen your expenses. Here and there insurance organizations may offer discounts to couples in the event that they decide to apply for two plans, non-smokers, or people who choose to pay their premiums using electronic funds transfers. Thus, it very well might be wise to look around and analyze the premiums and benefit plans available in the area where you reside.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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