Medicare supplement insurance, commonly called Medigap, pays the out-of-pocket costs that Original Medicare leaves behind. When you receive care, Medicare Part A or Part B pays its share first, and then your Medigap policy picks up some or all of what’s left: deductibles, coinsurance, and copayments. You pay a monthly premium to a private insurance company for this coverage, and in return, your medical bills become far more predictable.
How Claims Are Processed
The billing process is mostly invisible to you. When you see a doctor or get hospital care, Medicare processes the claim and pays its portion of the Medicare-approved amount. In most Medigap policies, you authorize your insurance company to receive your Part B claim information directly from Medicare. Once the insurer sees what Medicare paid and what’s left over, it pays the remaining balance (up to whatever your plan covers) directly to the provider. Some Medigap companies offer this same automatic process for Part A hospital claims as well.
If your insurer doesn’t receive claims automatically, there’s a workaround. Doctors who “participate” in Medicare (meaning they accept assignment for all Medicare patients) are required to accept direct payment from your Medigap insurer if you request it. In practice, most providers who treat Medicare patients do participate, so you rarely end up filing paperwork yourself.
What the Plans Actually Cover
Medigap plans are standardized by the federal government. Every Plan G sold in the country covers the same benefits, whether you buy it in Texas or Maine. The only difference between insurers is the price. There are ten standardized plan types, labeled A, B, C, D, F, G, K, L, M, and N, and each covers a different combination of costs.
Every single plan covers one core benefit: Part A coinsurance and hospital costs for up to an additional 365 days after Medicare’s benefits run out. That’s the baseline. From there, the plans branch out:
- Plans A and B are the most basic. Both cover Part B coinsurance and the first three pints of blood. Plan B also covers the Part A deductible. Neither covers skilled nursing facility coinsurance, the Part B deductible, excess charges, or foreign travel emergencies.
- Plan G is the most popular choice for people newly eligible for Medicare. It covers Part A and Part B coinsurance, the Part A deductible, skilled nursing facility coinsurance, excess charges from doctors who don’t accept Medicare’s approved amount, and 80% of foreign travel emergencies. The only gap is the annual Part B deductible ($283 in 2026), which you pay yourself.
- Plans C and F were historically the most comprehensive, with Plan F covering everything including the Part B deductible. However, these plans are no longer available if you turned 65 on or after January 1, 2020. People who were eligible for Medicare before that date can still enroll.
- Plans K and L take a cost-sharing approach. Plan K covers 50% of most benefits, and Plan L covers 75%, but both include annual out-of-pocket caps ($8,000 and $4,000, respectively, in 2026). Once you hit that limit and have paid your Part B deductible, the plan covers 100% for the rest of the year.
- Plan N covers most of what Plan G covers but skips excess charges and requires small copayments for certain office visits and some emergency room visits. In exchange, premiums tend to be lower.
- Plans D and M fall somewhere in the middle. Plan D is similar to Plan G but doesn’t cover excess charges. Plan M covers only 50% of the Part A deductible and skips excess charges but includes foreign travel emergency coverage.
Plans F and G also come in high-deductible versions in some states. With a high-deductible plan, you pay all Medicare-covered costs out of pocket until you hit the annual deductible ($2,870 in 2025, $2,950 in 2026). After that, the plan pays at the full benefit level. Premiums for these high-deductible options are significantly lower.
What Medigap Does Not Cover
Medigap only fills gaps in Original Medicare. If Medicare doesn’t cover a service, Medigap won’t either. That means no coverage for routine dental care, eye exams for glasses, hearing aids and fitting exams, long-term care, cosmetic surgery, or massage therapy. Prescription drugs are also excluded. You need a separate Medicare Part D plan for medications.
Medigap also cannot be combined with a Medicare Advantage plan. If you’re enrolled in Medicare Advantage (Part C), a Medigap policy won’t pay your Advantage plan’s cost-sharing. The two systems are separate paths through Medicare, and you choose one or the other.
How Premiums Are Set
Even though benefits are standardized, premiums vary widely because insurers use different pricing methods. There are three approaches, and the one your insurer uses has a real impact on what you’ll pay over time.
Community-rated (also called no-age-rated) pricing charges everyone in a given area the same premium regardless of age. A 66-year-old and a 79-year-old pay the same amount. Premiums still rise over time due to inflation and medical cost increases, but not because you got older. This method tends to be the least expensive over your lifetime.
Issue-age-rated pricing bases your premium on the age you were when you first bought the policy. If you enrolled at 65, your rate starts lower than someone who enrolled at 70. Your premium will increase with inflation but not because of aging. This rewards buying early.
Attained-age-rated pricing starts with your current age and adjusts upward as you get older. These policies often have the lowest premiums at the outset, which makes them attractive at 65. But because the price climbs with every birthday on top of normal inflation, they tend to become the most expensive option over a lifetime.
Understanding which pricing method a company uses is just as important as comparing the sticker price. A policy that looks cheap at 65 under attained-age pricing could cost substantially more by 80 than a community-rated plan that seemed pricier at the start.
When You Can Enroll
Your best window to buy a Medigap policy is your six-month open enrollment period. It starts the month you turn 65 and are enrolled in Medicare Part B. During this window, insurers must sell you any Medigap policy they offer at the standard price, regardless of your health. They cannot charge more for pre-existing conditions or deny you coverage.
Once that six-month window closes, protections shrink considerably. Insurers in most states can use medical underwriting, meaning they can ask about your health history, charge higher premiums based on pre-existing conditions, or refuse to sell you a policy altogether. A handful of states have additional protections, but the federal rule is clear: the open enrollment period is the safest and most affordable time to buy.
Outside open enrollment, federal law does provide “guaranteed issue” rights in specific situations. These generally apply when you lose other coverage through no fault of your own, such as when a Medicare Advantage plan leaves your area, an employer plan ends, or a Medigap insurer goes bankrupt. In those cases, you can buy certain Medigap plans without medical underwriting, though your choices may be limited to specific plan types.
Choosing Between Plan G and Plan N
For anyone newly eligible for Medicare, the practical decision usually comes down to Plan G and Plan N, since Plan F is off the table. Plan G covers everything except the annual Part B deductible. Plan N covers slightly less (no excess charge protection, plus small copays for some visits) but costs less per month.
The trade-off is straightforward. With Plan G, you pay a higher premium for near-complete predictability. With Plan N, you save on the premium but accept occasional copays and the small risk that a doctor might bill above Medicare’s approved amount. If your doctors all accept Medicare assignment, excess charges are a non-issue, which makes Plan N’s lower premium more appealing. If you prefer the simplicity of almost never seeing a medical bill, Plan G delivers that.
The high-deductible version of Plan G is worth considering if you’re relatively healthy and comfortable budgeting for potential out-of-pocket costs. You’ll pay significantly less in premiums each month, and your maximum annual exposure is capped at the deductible amount plus the Part B deductible. For people who rarely use medical services beyond preventive care, the savings can add up over years.