Medicare covers a substantial portion of healthcare costs for Americans 65 and older, but it was never designed to cover everything. The 20 percent coinsurance on outpatient services, hospital deductibles that reset with each benefit period, and the complete absence of an out-of-pocket maximum create real financial exposure. What is Medicare Supplemental Insurance? It is a type of private health insurance specifically designed to pay the costs that Original Medicare does not cover, and it is carried by more than 14 million Americans, according to NAIC data.
The Basics of Medicare Supplemental Insurance
Medicare Supplemental Insurance, officially called Medigap, is sold by private insurance companies but standardized by federal law. This means the government defines what each plan covers, while private insurers set the premiums and handle administration. You must be enrolled in both Medicare Part A and Part B to purchase a Medigap policy, and your Medigap plan works alongside Original Medicare to cover deductibles, coinsurance, and copays.
When you understand what is Medicare Supplemental Insurance, you understand that it is not a replacement for Medicare. It is a layer of financial protection on top of it. When you receive a Medicare-covered service, Medicare pays its portion first. Then your Medigap insurer pays some or all of the remaining cost-sharing, depending on your plan letter. In most cases, this process is handled electronically, with no claims for you to file. For a broader view of how this fits into the policy landscape, see our healthcare policy guide.
The Standardized Plan Letters
Federal law establishes ten standardized Medigap plan letters: A, B, C, D, F, G, K, L, M, and N. Each letter defines a specific set of benefits. Plans C and F are available only to beneficiaries who became Medicare-eligible before January 1, 2020. Minnesota, Massachusetts, and Wisconsin use their own standardization systems with different plan structures.
Plan G is the most comprehensive option for new enrollees. It covers everything except the $257 annual Part B deductible. Plan N is the most popular alternative, covering similar benefits but requiring copays of up to $20 for some office visits and up to $50 for ER visits not resulting in admission. Plans K and L offer lower premiums with partial coverage and annual out-of-pocket limits. For a detailed breakdown of each plan’s benefits, visit our Medicare Supplement plan comparison.
What Medigap Covers
The most comprehensive Medigap plans cover the following Original Medicare cost-sharing: the Part A deductible ($1,676 per benefit period in 2026), Part A hospital coinsurance for extended stays ($419 per day for days 61-90 and $838 per day for lifetime reserve days), skilled nursing facility coinsurance ($209.50 per day for days 21-100), Part B coinsurance (20 percent of approved charges), Part B excess charges (up to 15 percent above approved amounts, covered by Plans F and G only), the first three pints of blood, and 80 percent of foreign travel emergency care.
With Plan G, your total annual out-of-pocket cost for Medicare-covered services is limited to the $257 Part B deductible. Everything else is paid by the combination of Medicare and your Medigap policy. This predictability is the primary reason beneficiaries choose Medigap over other options. For details on what specific plans cover, see our articles on Plan G and Plan N.
What Medigap Does Not Cover
Medigap policies sold after 2006 do not include prescription drug coverage. You need a separate Medicare Part D plan for medications. Medigap also does not cover routine dental care, routine vision services and eyewear, hearing aids, long-term custodial care, or any service that Original Medicare itself does not cover. If Medicare denies a claim, Medigap will not pay for it.
Additionally, you cannot have a Medigap plan and a Medicare Advantage plan at the same time. Medicare Advantage is an alternative to Original Medicare, not a supplement to it. If you enroll in Medicare Advantage, your Medigap policy becomes redundant and the insurer should stop collecting premiums. Our Medigap vs Medicare Advantage article explains the differences in detail.
How Much Does It Cost?
Monthly premiums for Medigap plans vary by plan letter, age, gender, location, tobacco use, and the insurer. National premium ranges in 2026 are approximately: Plan G at $120 to $300 per month, Plan N at $80 to $220, Plan F at $150 to $350 (closed to new enrollees after 2020), and Plans K and L at $40 to $130. These premiums are in addition to the $185 monthly Part B premium.
Insurance companies use one of three pricing methods. Community-rated plans charge the same premium regardless of your age. Issue-age-rated plans base the premium on your age at purchase and do not increase due to aging (though general rate increases still apply). Attained-age-rated plans start lower but increase as you get older. According to NAIC data, attained-age rating is the most common method. For state-specific pricing, explore our guides on plans in Colorado, Kansas, and Delaware.
When to Enroll
The most important enrollment window is your Medigap Open Enrollment Period. This six-month period begins the first day of the month you turn 65 and are enrolled in Medicare Part B. During this window, every insurer selling Medigap in your state must accept you at standard rates, regardless of your health history or pre-existing conditions. No medical questions, no health screening, no denial.
After this period expires, insurers in most states can use medical underwriting to evaluate your application. They may deny coverage, exclude pre-existing conditions, or charge higher premiums based on your health. Some states offer additional protections. New York provides continuous open enrollment for Medigap. Connecticut, Massachusetts, Maine, and a few others have expanded guaranteed-issue rights. Check your state insurance department or SHIP program for the rules that apply to you. Understanding enrollment timing is crucial to grasping what is Medicare Supplemental Insurance and how to access it.
How Medigap Differs From Medicare Advantage
Medicare Advantage replaces Original Medicare with a private plan that manages your benefits through a provider network. Medigap supplements Original Medicare without replacing it. Medicare Advantage often includes drug coverage and extras like dental and vision but requires network compliance and may impose prior authorization. Medigap covers Medicare cost-sharing with no network restrictions but does not include drugs, dental, or vision.
The financial structures differ as well. Medicare Advantage plans have lower or zero premiums but require cost-sharing at the point of service, up to an annual out-of-pocket maximum of $9,350 in 2026. Medigap plans have higher premiums but minimal or no cost-sharing when you use services. For beneficiaries with significant healthcare needs, the total annual cost is often lower with Medigap despite the higher premiums. Our healthcare costs guide explores these financial dynamics further.
Frequently Asked Questions
Is Medicare Supplemental Insurance required?
No. It is optional. However, without it, you are responsible for all of Original Medicare’s deductibles, coinsurance, and copays with no annual out-of-pocket cap. Most financial advisors and Medicare counselors recommend some form of supplemental coverage.
Can I buy Medigap at any age?
You must be enrolled in Medicare Parts A and B to buy Medigap. Most people enroll at 65, but those who qualify for Medicare due to disability can also purchase Medigap in many states. Premiums may be higher for enrollees under 65.
Does my employer plan count as supplemental insurance?
Employer and retiree group health plans can function as supplemental coverage for Medicare beneficiaries. If you have employer coverage, it may coordinate with Medicare to reduce your out-of-pocket costs. Consult your HR department or benefits administrator to understand how your plan works with Medicare.
Can I switch Medigap plans later?
Yes, you can apply to switch at any time, but outside your Open Enrollment Period you face medical underwriting in most states. Some states offer birthday rules or other annual switching opportunities without health questions. Your state insurance department can explain applicable protections.
What is the difference between Medigap and supplemental insurance?
Medigap and Medicare Supplemental Insurance are the same thing. Both terms refer to standardized private insurance policies that cover the gaps in Original Medicare. The term Medigap is more commonly used in industry and regulatory contexts.
Getting Started
Now that you understand what is Medicare Supplemental Insurance, the next step is evaluating whether it fits your needs. If you want maximum financial protection and unrestricted provider access, Medigap is likely the right choice. Compare plan letters based on your healthcare utilization and budget. Compare carriers based on premiums, financial strength, rate increase history, and discounts. Enroll during your guaranteed-issue window for the best terms. Your state SHIP program offers free assistance, and our Medigap plans overview provides a comprehensive starting point for your research.