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, and it is carried by millions of Americans, according to the National Association of Insurance Commissioners (NAIC). This article is general educational information, not insurance or financial advice, and the dollar figures below are estimates that change each year.
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 companion article that focuses on exactly what each level of coverage pays, see our guide to Medicare Supplement coverage; for the broader policy context, 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, and a given letter offers the same core benefits no matter which company sells it. Plans C and F are available only to beneficiaries who became Medicare-eligible before January 1, 2020; if you first qualified on or after that date, you cannot buy them. 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 Part B deductible. Plan N is a 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 in 2026: the Part A hospital deductible ($1,736 per benefit period), Part A hospital coinsurance for extended stays ($434 per day for days 61-90 and $868 per day for the lifetime reserve days), skilled nursing facility coinsurance ($217 per day for days 21-100), Part B coinsurance (the 20 percent of approved charges), Part B excess charges (up to 15 percent above the approved amount, on plans that include this benefit, such as Plan G), the first three pints of blood, and 80 percent of foreign travel emergency care up to plan limits. These amounts are set annually by CMS, so confirm the current figures at Medicare.gov.
With Plan G, your total annual out-of-pocket cost for Medicare-covered services is limited to the $283 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 today do not include prescription drug coverage. You need a separate Medicare Part D plan for medications, and it is worth enrolling in Part D when you are first eligible to avoid a late-enrollment penalty. 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, so the following are estimated national ranges, not quotes. In 2026 they are roughly: 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 standard Part B premium, which is $202.90 per month in 2026 (higher for those subject to income-related adjustments).
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 because of 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 a common method. Because the rating method affects how your premium grows over decades, ask the insurer which method applies before you buy. For state-specific pricing, explore our guides such as plans in Colorado, and our broader Medigap plans overview.
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 are both 65 or older and 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 for a period, or charge higher premiums based on your health. Some states offer additional protections: New York provides continuous open enrollment for Medigap, and Connecticut, Massachusetts, Maine, and a few others have expanded guaranteed-issue rights or annual “birthday rule” switching windows. 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 on the best terms.
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 in-network out-of-pocket maximum (capped around $9,350 in recent years, though the exact limit is set annually — verify the current figure). 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. Many financial advisors and Medicare counselors recommend some form of supplemental coverage, but the right choice depends on your health, budget, and whether you prefer Medigap or Medicare Advantage.
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, and guaranteed-issue protections for that group vary by state.
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 before dropping it for a Medigap policy.
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 the protections that apply to you.
What is the difference between Medigap and Medicare Supplemental Insurance?
They 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, while “Medicare Supplemental Insurance” is the plainer, official description. Our sibling article on Medicare Supplement coverage drills into precisely what each plan pays.
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, and remember to add a separate Part D drug plan. Your state SHIP program offers free assistance, and our Medigap plans overview provides a comprehensive starting point for your research.
Disclaimer: This article is general educational information about Medicare Supplemental Insurance (Medigap) and is not insurance, legal, tax, or financial advice. Benefit rules and every dollar figure shown, including deductibles, coinsurance, premiums, and out-of-pocket limits, are set annually and can change, and plan availability and guaranteed-issue rights vary by state. Confirm current details at Medicare.gov, with your State Health Insurance Assistance Program (SHIP), or with a licensed agent before you enroll or make coverage decisions.
Sources
- Medicare.gov — Medigap (Medicare Supplement Insurance) basics, how Medigap works with Part D, and 2026 Medicare costs (Part A/B deductibles, coinsurance, and premiums)
- Centers for Medicare & Medicaid Services (CMS) — 2026 Medicare Parts A and B premiums and deductibles fact sheets
- National Association of Insurance Commissioners (NAIC) — Medicare Supplement (Medigap) model regulation, rating methods, and enrollment data