Medicare Supplement Insurance: Is a Medigap Plan Right for You?

In 2019, beneficiaries of Original Medicare (Part A and Part B) in good health pay an average of $7,850 in annual Medicare costs.1 This amount includes premiums and prescription drug costs, in addition to out-of-pocket costs that Medicare Supplement Insurance may cover.

Millions of Medicare beneficiaries choose to buy Medicare Supplement Insurance (Medigap) to help cover some of these costs. In fact, 35 percent of Medicare Part A and Part B (this doesn’t include those enrolled in a Medicare Advantage plan) beneficiaries were enrolled in a Medigap plan.2

So how do you decide if Medicare Supplement Insurance is right for you? This guide outlines some of the benefits offered by each type of Medigap plan as well as their costs, so that you can find a plan that fits your needs.

A grandmother smiles as her granddaughter embraces her

What do Medicare Supplement Insurance plans cover?

There are 9 potential benefits that can be offered by the 10 standardized Medicare Supplement Insurance plans available in most states in 2020:

  1. Medicare Part A coinsurance and hospital costs
  2. Medicare Part B coinsurance and copayments
  3. First three pints of blood
  4. Part A hospice care coinsurance and copayments
  5. Coinsurance for skilled nursing facility care
  6. Part A deductible
  7. Part B deductible
  8. Part B excess charges
  9. Foreign travel emergency care

The chart below outlines the benefits covered by each type of Medigap plan.

Medicare Supplement Insurance Plans 2020
Medicare Supplement Benefits A B C D F G K L M N
Part A co-insurance and hospital costs
Part B co-insurance or co-payment 50% 75%
First 3 pints of blood 50% 75%
Part A hospice care co-insurance or co-payment 50% 75%
Co-insurance for skilled nursing facility     50% 75%
Medicare Part A deductible   50% 75% 50%
Medicare Part B deductible                
Medicare Part B excess charges                
Foreign travel emergency     80% 80% 80% 80%     80% 80%
1. Plans C and F are not available to new beneficiaries who become eligible for Medicare on or after January 1, 2020.
2. Plans F and G also offer a high deductible plan which has an annual deductible of $2,340 in 2020. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high deductible Plan F is not available to new beneficiaries who become eligible for Medicare on or after January 1, 2020.
3. Plan K has an out-of-pocket yearly limit of $5,880 in 2020. Plan L has an out-of-pocket yearly limit of $2,940 in 2020.
4. Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 for emergency room visits that don’t result in an inpatient admission.
View an image version of this table.

Do I need Medicare Supplement Insurance if I have Medicare?

When you go to the doctor and use your Original Medicare benefits, your costs are not covered in full (except in the case of certain preventative services).

  • Depending on where you receive your care, you have to meet your Part A or Part B deductible out of your own pocket for covered services before your Medicare pays its share.

  • Once you’ve met your deductible, you’ll typically face cost-sharing requirements such as Part A coinsurance or Part B coinsurance/copayments.

This is where Medicare Supplement Insurance comes in.

  • A Medicare Supplement Insurance plan can cover the cost of your Medicare Part A coinsurance and Part B coinsurance/copayment, in part or in full.

  • Some Medigap plans even cover the Part A and/or Part B deductible in part or in full.

You pay a monthly premium to belong to a Medicare Supplement Insurance plan, just like you would for many other types of health insurance. You also continue to pay your Medicare Part B premium ($144.60 per month or higher in 2020, depending on your income).

What is the average cost of Medicare Supplement Insurance?

The average monthly premium for a Medicare Supplement Insurance plan in 2018 was $125.93 per month.3

It’s important to note that each type of Medigap plan offers a different combination of standardized benefits. Plans with fewer benefits may offer lower premiums.

Other factors such as age, gender, smoking status, health and where you live can also affect Medigap plan rates.

Can I buy a Medicare Supplement Insurance plan at any time?

You can enroll in a Medicare Supplement Insurance plan at any time.

However, a good time to buy a Medigap plan is during your Medigap Open Enrollment Period (OEP), which begins as soon as you are at least 65 and enrolled in Medicare Part B.

During your Medigap Open Enrollment Period, Medicare Supplement Insurance companies can’t use your medical history or current health status to determine your eligibility for a Medigap plan or to charge you higher plan premiums.

Outside of your Medigap Open Enrollment Period, you may have what are called “guaranteed issue rights.”

Having a guaranteed issue right means Medicare Supplement Insurance companies cannot perform any medical underwriting in determining your Medigap premium. In other words, you cannot be charged more for a plan because of your health.

There are several circumstances that could qualify you for a Medigap guaranteed issue right.

Certain guaranteed issue rights may limit the plan types you may buy.

How do I sign up for Medicare Supplement Insurance in 2020?

A licensed insurance agent can help you learn more about Medicare Supplement Insurance companies and the Medigap plans that may be available where you live.

Explore the plans that offer the benefits you want and find out their costs so that you can find a plan that works for you.


Learn about Medigap plans in your area