What Is Supplemental Medigap Insurance and How Does It Apply to Medicare?

Senior adult, male patient receives vaccine or medicine from his African descent, home healthcare nurse in nursing home or home setting.
fstop123 / Getty Images

Seniors who sign up for Medicare have two basic choices: enroll in original Medicare or enroll in Medicare Advantage. If you choose the former, another option is to buy Medicare Supplement Insurance, or Medigap, from a private insurer to help fill in gaps in your original Medicare coverage.

See: New Report Finds Medicare Insufficient To Cover Mental Health Concerns of Retirees
Find: Retirement Guidance — Can You Remain on Medicare If You Return to Work?

Medigap is an option for those who sign up for original Medicare only — it’s not available for Medicare Advantage. As the Medicare.gov website notes, original Medicare pays for much of the cost of covered health care services and supplies, but not all of them. A Medigap policy lets you cover remaining costs such as copayments, coinsurance and certain deductibles.

The catch is you’ll pay an additional monthly premium for a Medigap policy, though it might be worth the expense if you face a lot of copayments and other deductibles. You can buy a Medigap policy at any time, but in most states it’s best to do so within six months of enrolling in Medicare Part B, according to the AARP. This way, insurers can’t reject you or charge more because of preexisting conditions.

Although private insurers sell the Medigap plans, the coverage is standardized by federal and state governments. Insurers can offer up to 10 plans, each with a different letter designation. Plans with the same letter typically include the same benefits, no matter which insurance company offers it. The plans aren’t offered at the same price, however. You can find the plan that best meets your needs by visiting Medicare’s Medigap plan finder.

Retire Comfortably

Explore: Retirement — High Municipal Bond Earnings Could Lead to Higher Medicare Premiums

Here’s how to apply:

  1. Once on the plan finder site, enter your ZIP code.
  2. Answer the questions about your age, gender and tobacco use.
  3. You’ll see a list of letter plans for your area on the next screen. Review the different prices, copays, deductibles and benefits offered.
  4. Click the “Plan Details” buttons to see more detailed information and premiums.
  5. Follow the “View Policies” link for a list of insurers offering the letter plans. You’ll also see each company’s address and phone number and a link to “Visit company website.”

Premiums vary depending on the insurer. For example, the AARP notes that a 65-year-old man in Baltimore who doesn’t smoke and wants Plan G options that don’t have high deductibles can expect to pay anywhere from $127 to $452 a month. Average Medigap premiums are usually higher for males because they typically have shorter life spans than females and tend to be less healthy

Some insurers offer discounts for multiple policies and/or household discounts. Some also use a formula, called attained-age pricing, that offers low premiums to younger buyers and then increases the premium based on age and inflation. Another option — community-rated pricing — charges the same premium to all customers within the same state who have policies with the same letter designation, regardless of age.

Retire Comfortably

More From GOBankingRates

Share this article:

Retire Comfortably

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More