Medicare Supplement

Closing the Gaps: A Deep Dive into Medicare Supplement (Medigap) Plans

For those who choose the comprehensive and flexible coverage of Original Medicare (Parts A and B), a significant challenge remains: out-of-pocket costs. While Original Medicare covers a large portion of your healthcare bills, it was never designed to cover everything. The remaining expenses—deductibles, coinsurance, and copayments—can quickly add up, creating financial uncertainty precisely when you need stability the most. This is where Medicare Supplement Insurance, widely known as Medigap, comes in.

My name is Kirk M. Hale, and at The Medicare Channel, I specialize in helping clients understand how Medigap can create a financial safety net, providing predictable costs and robust coverage. A Medigap policy is not a replacement for Medicare; it works with it to pay for the “gaps” in coverage.

What Are Medigap Plans and How Do They Work?

Medigap plans are sold by private insurance companies but are standardized by the federal government. This standardization is a key benefit for consumers. It means that a Medigap Plan G from one company must offer the exact same basic benefits as a Plan G from any other company. The only difference will be the premium charged and the company’s customer service reputation.

Here’s how it works in a real-world scenario:

1. You visit your doctor or have a hospital stay.
2. The provider bills Medicare first.
3. Medicare pays its approved share of the bill.
4. The remaining bill (your share, such as the 20% Part B coinsurance or the Part A hospital deductible) is then sent to your Medigap insurance company.
5. Your Medigap plan pays its share of the remaining costs, based on the benefits of your specific plan.

In many cases, with a comprehensive Medigap plan, you could be left with little to no out-of-pocket costs for Medicare-covered services.

The Powerful Benefits of Medigap vs. Original Medicare Only

Choosing to pair a Medigap plan with your Original Medicare offers several profound advantages:

• Financial Predictability: The primary benefit is budget stability. By paying a fixed monthly premium for your Medigap plan, you largely eliminate the risk of surprise medical bills. You’ll know exactly what your healthcare will cost you each month, which is invaluable for anyone on a fixed income. With Original Medicare alone, a single serious illness could lead to thousands of dollars in 20% coinsurance payments with no annual cap.
• Freedom of Choice: This is a cornerstone of the Medigap/Original Medicare combination. You can see any doctor, specialist, or visit any hospital in the United States that accepts Medicare. You do not need to worry about provider networks, and you almost never need a referral to see a specialist. This freedom provides unparalleled access to care, whether you’re at home or traveling across the country.
• Comprehensive Coverage: Medigap plans cover some of the most significant costs left by Original Medicare, including the Part A hospital deductible ($1,632 in 2024) and the 20% coinsurance for Part B services. Some plans even offer benefits for foreign travel emergencies.
• Guaranteed Renewability: As long as you pay your premiums, your Medigap policy is guaranteed renewable. The insurance company cannot cancel your policy, even if your health changes.

The “Alphabet Soup”: Understanding Your Medigap Plan Options

In most states, there are up to 10 standardized Medigap plans available, designated by letters (A, B, C, D, F, G, K, L, M, N). While this seems confusing, it simply offers a spectrum of coverage levels to fit different needs and budgets.

• The Former Champions: Plan F and Plan C: For many years, Plan F was the most popular because it was the most comprehensive, covering every single gap in Original Medicare, including the Part B deductible. However, a federal law change means that as of January 1, 2020, Medigap plans can no longer be sold to new Medicare enrollees if they cover the Part B deductible. Therefore, Plan F and Plan C are only available to individuals who were eligible for Medicare before 2020.
• The New Leader: Plan G: For anyone new to Medicare, Plan G has become the go-to plan for comprehensive coverage. It offers the exact same benefits as Plan F with one single exception: you must pay the annual Medicare Part B deductible yourself ($240 in 2024). After you meet this small annual deductible, Plan G functions just like Plan F did, covering your Part A deductible, Part B coinsurance, and more. Often, the annual savings in premiums for Plan G compared to Plan F are greater than the Part B deductible, making it a financially smart choice even for those eligible for both.
• A Popular Cost-Sharing Option: Plan N: Plan N is another excellent option for those looking for lower premiums in exchange for some small, predictable cost-sharing. Like Plan G, you pay the Part B deductible. Additionally, with Plan N, you may have a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission. For healthy individuals who don’t visit the doctor frequently, the premium savings can be substantial.

How to Choose: The Critical Importance of Your Medigap Open Enrollment Period

The absolute best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period. This period automatically begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B.

During this protected window, insurance companies cannot use medical underwriting. This means they are legally required to sell you any Medigap policy they offer, cannot charge you more because of pre-existing health conditions, and cannot make you wait for coverage to start.

If you miss this window, you may still be able to apply for a policy, but in most cases, you will have to answer health questions. An insurer could deny your application, charge you a higher premium, or impose a waiting period based on your health history.

Choosing the right Medigap plan is a crucial decision that balances your budget, health needs, and desire for peace of mind. As your advisor at The Medicare Channel, I will help you compare plans, analyze premium costs from top-rated carriers, and most importantly, ensure you take advantage of your guaranteed-issue rights during your Open Enrollment Period.

Don’t leave your financial health to chance. Contact Kirk M. Hale today to find the Medigap plan that provides the security you deserve.