• Medigap helps to pay for some of the healthcare costs that aren’t covered by original Medicare.
  • The cost you pay for Medigap depends on the plan and company you choose.
  • Medigap usually has a monthly premium, and you may also have to pay copays, coinsurance, and deductibles.

Medicare is a health insurance program offered by the federal government for people aged 65 and over as well as other specific groups. It’s estimated that original Medicare (parts A and B) covers about 80 percent of an individual’s medical expenses.

Medicare Supplement insurance (Medigap) helps to pay for some of the healthcare costs that aren’t covered by original Medicare. About 25 percent of people with original Medicare also have a Medigap plan.

The cost of a Medigap plan can vary due to several factors, including which plan you enroll in, your location, and the company from which you purchase it. Below, we’ll explore more about the costs of Medigap plans.

Medigap is supplemental insurance that you can buy to help pay for things that aren’t covered by Medicare Part A and Medicare Part B. Some examples of the costs that may be covered by Medigap include:

  • deductibles for parts A and B
  • coinsurance or copays for parts A and B
  • excess costs for Part B
  • healthcare costs during foreign travel
  • blood (first three pints)

The specific things that are covered depend on the Medigap plan that you purchase. There are 10 different types of Medigap plans, which are each designated with a letter: A, B, C, D, F, G, K, L, M, and N. Each plan has different levels of coverage.

Private companies sell Medigap policies. Each plan is standardized, meaning that it has to provide the same basic level of coverage. For example, a Plan G policy covers the same basic set of benefits regardless of its cost or the company that’s selling it.

Medigap policies are also guaranteed renewable as long as you pay your monthly premiums. This means that the insurance company you purchased your plan from cannot cancel your plan, even if you have health problems.

So what are the actual costs associated with Medigap? Let’s examine the potential costs in more detail.

Monthly premiums

Each Medigap policy has a monthly premium. The exact amount can vary by individual policy. Insurance companies can set monthly premiums for their policies in three different ways:

  • Community-rated: Everyone that buys the policy pays the same monthly premium regardless of age.
  • Issue-age-rated: Monthly premiums are tied to the age at which you first purchase a policy, with younger buyers having lower premiums. Premiums don’t increase as you get older.
  • Attained-age-rated: Monthly premiums are tied to your current age. That means your premium will go up as you get older.

If you’d like to enroll in a Medigap plan, it’s important to compare multiple policies that are offered in your area. This can help you to determine how premiums are set and how much you can expect to pay per month.

Remember that the Medigap monthly premium is paid in addition to other monthly premiums associated with Medicare. These can include premiums for:

Deductibles

Medigap itself isn’t typically associated with a deductible. However, if your Medigap plan doesn’t cover the Part A or Part B deductible, you’re still responsible for paying those.

Medigap Plan F and Plan G do have a high-deductible option. The monthly premiums for these plans are typically lower, but you’ll have to meet a deductible before they start to cover costs. For 2020, the deductible is $2,340.

Coinsurance and copays

Like deductibles, Medigap itself isn’t associated with coinsurance or copays. You may still have to pay certain coinsurance or copays associated with original Medicare if your Medigap policy doesn’t cover them.

Out-of-pocket limit

Medigap Plan K and Plan L have an out-of-pocket limit. This is a maximum amount that you’ll have to pay out-of-pocket. After you meet this limit, these plans pay for 100 percent of covered services for the rest of the year.

Out-of-pocket costs

There are some health-related services that aren’t covered by Medigap. If you need to use these services, you’ll have to pay for them out-of-pocket. These include:

Below, we’ll compare the costs of the different Medigap plans available in three cities across the United States.

Additionally, we’ve also included the cost of a Medicare Part C (Advantage) plan in the same area. These plans include dental, vision, hearing, and prescription drug coverage (Part D), which are services not covered by Medigap.

Raleigh, NC (zip code: 27612) Des Moines, IA (zip code: 50309) San Francisco, CA (zip code: 94017)
Plan A premium range $79
–$218
$68
–$222
$71
–$194
Plan B premium range $114
–$249
$104
–$252
$112
–$193
Plan C premium range $135
–283
$121
–$287
$125
–$250
Plan D premium range $119
–214
$116
–$233
$106
–$221
Plan F premium range $127
–283
$109
–$266
$119
–$372
Plan G premium range $94
–$209
$94
–$195
$110
–$253
Plan K premium range $47
–$97
$41
–$92
$45
–$106
Plan L premium range $77
–$136
$74
–$129
$76
–$157
Plan M premium range $104
–$157
$109
–$146
$107
–$199
Plan N premium range $84
–$218
$74
–$186
$73
–$231
Medicare Advantage premium range $0
–$82
$0
–$58
$0
–$398

There are certain rules associated with buying a Medigap policy. These include:

  • You must have original Medicare (parts A and B), not Medicare Advantage
  • A Medigap plan only covers a single person. This means spouses will need to purchase separate policies.
  • By federal law, insurance companies aren’t required to sell Medigap policies to people under 65. If you’re under 65 and have original Medicare, you may not be able to purchase the policy that you want.

Additionally, some Medigap plans are no longer available to those new to Medicare and Medigap. However, people who are already enrolled in these plans can continue to have them. These plans include:

  • Plan C
  • Plan E
  • Plan F
  • Plan H
  • Plan I
  • Plan J

Below are some important dates for enrolling in a Medigap plan:

Medigap open enrollment

This period starts at the beginning of the month that you turn 65 or older and have enrolled in Medicare Part B. Medigap open enrollment lasts 6 months. During this time, you may purchase a Medigap plan available in your area.

Outside of open enrollment

You can still purchase a Medigap plan outside of your open enrollment period. However, insurance companies may choose not to sell you a policy due to medical underwriting.

Medical underwriting is a process that’s used by insurance companies to make decisions about coverage based off of your medical history. Medical underwriting is not allowed during Medigap open enrollment.

Medigap is a type of supplemental insurance that you can purchase to help pay for health-related costs that aren’t covered by original Medicare. There are 10 different types of standardized Medigap plan.

The cost of a Medigap plan depends on the plan you choose, where you live, and the company from which you purchase your policy. You’ll pay a monthly premium for your plan and may also be responsible for some deductibles, coinsurance, and copays.

You can first enroll in a Medigap plan during Medigap open enrollment. This is when you’re 65 or older and enrolled in Medicare Part B. If you don’t enroll during this time, you may not be able to enroll in the plan that you want in the future.