Medicare Supplement (Medigap) Plans: How to Choose the Right Coverage for Retirement

Why Original Medicare Alone Isn't Enough

Medicare Parts A and B cover a broad range of hospital and outpatient services, but they do not cover everything — and they leave substantial cost-sharing obligations on the beneficiary. Key gaps include:

• Part B coinsurance: You pay 20% of all Part B (outpatient, physician) services after meeting the deductible. There is no out-of-pocket maximum under Original Medicare — a prolonged illness could result in tens of thousands of dollars in personal liability.
• Part A deductible: $1,676 per benefit period in 2024 — and you can face multiple benefit periods in a year if you're readmitted after a 60-day gap.
• Hospital coinsurance days: Days 61–90 of a hospital stay require a daily coinsurance payment ($419/day in 2024); beyond 90 days, lifetime reserve days apply with higher costs.
• No dental, vision, or hearing: Original Medicare provides virtually no dental, vision, or hearing coverage — costs that are significant for older retirees.
• Foreign travel: Medicare generally does not cover medical care outside the United States.

Medigap policies, sold by private insurers and regulated by states, pay some or all of these cost-sharing amounts — providing predictable, capped healthcare spending in retirement.

The 10 Standardized Medigap Plans

In most states, Medigap plans are standardized: Plan G from Company A offers identical benefits to Plan G from Company B — only the premium differs. This makes comparison shopping straightforward. Plans are labeled A through N (with some letters discontinued).

Plan G: The Most Comprehensive Coverage Available to New Enrollees

Plan F — historically the most comprehensive — is no longer available to people who became Medicare-eligible after January 1, 2020. For new enrollees, Plan G is the most comprehensive option. It covers everything Plan F covers except the Part B deductible ($240 in 2024), which you pay directly. Plan G is typically priced about $20–$40/month less than Plan F, making it often the better financial choice even accounting for the deductible you pay out-of-pocket.

Plan G is ideal for retirees who want predictable, comprehensive coverage and are willing to pay a higher premium for complete peace of mind. With Plan G, once you've met the Part B deductible, your out-of-pocket exposure for Medicare-covered services is essentially zero.

Plan N: Lower Premium with Some Cost-Sharing

Plan N offers near-comprehensive coverage with two differences from Plan G: you pay up to $20 per doctor visit and up to $50 per emergency room visit (waived if admitted). Plan N also does not cover Part B excess charges — the extra amount that non-participating Medicare providers are allowed to charge above Medicare's approved amount.

Plan N typically costs $30–$70/month less than Plan G, making it attractive for healthier retirees who don't expect frequent doctor visits. If you live in a state where balance billing (excess charges) is prohibited — such as New York, Minnesota, or Ohio — Plan N becomes even more appealing since the coverage gap is effectively eliminated by state law.

How Medigap Premiums Are Priced

Not all Medigap insurers price premiums the same way. Three pricing methodologies exist:

• Community-rated (no-age-rated): Same premium regardless of age. Premiums may increase with inflation but not because you're getting older. Generally the best long-term value.
• Issue-age-rated: Premium based on your age when you first buy the policy. Doesn't increase as you age, but starts higher for older enrollees.
• Attained-age-rated: Premium increases as you age. Starts low but becomes increasingly expensive over time. Most common — and most problematic for retirees on fixed incomes.

When comparing plans, don't just look at today's premium. Understand the pricing methodology and request rate increase history from the insurer. A plan that is cheap today on an attained-age basis may be prohibitively expensive by age 80.

Medigap vs. Medicare Advantage: A Structural Choice

Medigap works only alongside Original Medicare (Parts A and B). You cannot combine Medigap with Medicare Advantage. If you enroll in Medicare Advantage, your Medigap policy becomes essentially useless — the Advantage plan takes over all coverage. This is a fundamental structural decision: choose between Original Medicare + Medigap + Part D drug plan, or Medicare Advantage (all-in-one). See our separate article on this comparison for a full breakdown.