Navigating healthcare costs in retirement can feel like solving a complex puzzle. Original Medicare (Part A and Part B) provides a foundation, but it leaves significant financial gaps that can lead to unexpected and burdensome out-of-pocket expenses. This is where a Medicare supplement insurance plan becomes a critical component of a secure retirement strategy. Also known as Medigap, these plans are specifically designed to work alongside your Original Medicare coverage, picking up costs like deductibles, coinsurance, and copayments. For many seniors, selecting the right Medigap policy is the single most important decision for predictable healthcare budgeting and peace of mind. This guide will explain how these plans work, what they cover, and how to choose the best option for your needs and budget as you plan for 2026 and beyond.

What Is a Medicare Supplement (Medigap) Plan?

A Medicare supplement insurance plan is a private health insurance policy purchased to fill the “gaps” in Original Medicare coverage. These gaps are not minor oversights, they are substantial cost-sharing provisions built into the Medicare program. For instance, Medicare Part A has a deductible per benefit period for hospital stays, and Part B typically requires you to pay 20% of the Medicare-approved amount for most doctor services and outpatient therapy with no annual out-of-pocket maximum. A Medigap policy pays for some or all of these leftover costs after Medicare pays its share. It is crucial to understand that these plans only work with Original Medicare. If you enroll in a Medicare Advantage Plan (Part C), you cannot use, and do not need, a Medigap policy.

Medigap plans are standardized by the federal government, meaning each plan of the same letter (e.g., Plan G, Plan N) must offer the exact same basic benefits, regardless of which insurance company sells it. This standardization, which is a key consumer protection, allows you to compare prices between companies for the same coverage confidently. However, while benefits are identical, premiums can vary widely based on the insurer, your age, location, and other factors. It is also important to note that Medigap plans generally do not cover prescription drugs. For that coverage, you must enroll in a separate Medicare Part D plan.

Comparing Standardized Medigap Plan Benefits

As of 2026, there are ten standardized Medigap plans available in most states, labeled A, B, C, D, F, G, K, L, M, and N. (Note: Plan C and Plan F are not available to those who became eligible for Medicare on or after January 1, 2020). Each plan offers a different combination of covered benefits, allowing you to select the level of financial protection that matches your risk tolerance and budget. The most comprehensive plans available to new enrollees are Plan G and Plan N, which have become the popular choices for those seeking robust coverage.

To understand the differences, it helps to know the core benefits that plans may cover. These include Medicare Part A coinsurance and hospital costs, Part B coinsurance or copayment, Part A hospice care coinsurance or copayment, and the first three pints of blood used in a medical procedure. More comprehensive plans add coverage for the Part A deductible, the Part B deductible (where permitted), Part B excess charges (when a doctor charges more than the Medicare-approved amount), and foreign travel emergency care. Plans K and L are “cost-sharing” plans that cover a percentage of these costs and include an annual out-of-pocket limit, after which the plan pays 100% of covered services for the rest of the year.

Choosing between plans often comes down to a trade-off between monthly premium and potential out-of-pocket costs. A plan with a higher monthly premium, like Plan G, typically covers almost all gaps, leading to very predictable, low out-of-pocket costs when you receive care. A plan with a lower monthly premium, like Plan N, requires you to pay some smaller copays (for example, up to $20 for some office visits and $50 for emergency room visits that don’t result in an inpatient admission) and potentially Part B excess charges. For a detailed breakdown of what each specific plan covers, including the now-closed Plan F, our resource on Medicare Supplement Plan F provides key historical context.

How to Choose the Right Medicare Supplement Plan

Selecting the right Medigap policy is a personal financial decision that requires evaluating your health, budget, and preferences for predictability. Start by assessing your typical healthcare usage and financial comfort with risk. If you frequently visit doctors or specialists, or if you simply want the greatest peace of mind and predictability, a more comprehensive plan like G or N may be worth the higher premium to minimize surprise bills. If you are in excellent health and rarely use medical services, you might opt for a lower-premium plan, accepting that you will pay more out-of-pocket on the occasions you do need care.

Once you decide on a plan letter, the next critical step is shopping among insurance companies. Since benefits are standardized, you should compare premiums. Costs can be calculated in three ways: community-rated (same premium for everyone regardless of age), issue-age-rated (premium based on your age when you buy the policy but doesn’t increase as you age), and attained-age-rated (premium starts low but increases as you get older). It is essential to ask how a company prices its policies. Furthermore, consider the insurer’s reputation for customer service and rate increase history. State insurance departments often publish consumer guides and complaint ratios that can be helpful.

Your best opportunity to enroll is during your six-month Medigap Open Enrollment Period. This period automatically starts the first month you are 65 or older and enrolled in Medicare Part B. During this window, you have a guaranteed issue right, meaning insurance companies cannot deny you a Medigap policy or charge you more due to pre-existing health conditions. Missing this window could mean undergoing medical underwriting and potentially being denied coverage or charged a much higher premium. For more on navigating enrollment and choices, our main guide on Medicare Supplement Insurance explores the process in depth.

Costs and Pricing Factors

The premium for your Medicare supplement insurance plan is in addition to the monthly premium you pay for Medicare Part B. Several factors influence this cost. Your location is a major factor, as prices vary by state and even by zip code. Your age at enrollment and the pricing method (community, issue-age, or attained-age) used by the insurer will directly affect your premium and how it increases over time. Some insurers offer household discounts if both spouses enroll. While shopping for price is vital, the long-term financial stability of the insurer and its history of premium increases are equally important considerations for a policy you may hold for decades.

Medicare Supplement vs. Medicare Advantage

It is vital to understand that Medicare Supplement (Medigap) and Medicare Advantage (Part C) are two fundamentally different ways to receive your Medicare benefits. They cannot be used together. A Medigap plan supplements Original Medicare, which is provided directly by the federal government. You can see any doctor or specialist nationwide who accepts Medicare, without needing referrals. Your coverage is consistent and portable across the country.

In contrast, a Medicare Advantage Plan is an alternative to Original Medicare offered by private insurance companies. These plans bundle Part A, Part B, and usually Part D (drugs), and often include extra benefits like vision or dental. However, they typically operate within a network of providers (like an HMO or PPO) and may require prior authorizations for services. Your out-of-pocket costs are usually capped annually, but you pay copays and coinsurance for services as you use them throughout the year. The choice between the two models hinges on your preference for the broad flexibility of Original Medicare with a supplement versus the potentially lower upfront premiums and all-in-one convenience, but with network restrictions, of an Advantage plan. For seniors considering dental coverage, which is not included in standard Medigap plans, our Medicare Supplemental Dental Insurance Guide explains specific options.

Frequently Asked Questions

Can I be denied a Medigap policy? During your 6-month Open Enrollment Period when you first get Part B at 65, you have guaranteed issue rights and cannot be denied. Outside of this period, insurers can use medical underwriting to deny coverage or charge higher premiums based on your health.

Do Medigap plans cover prescription drugs? No. Standalone Medigap plans sold after 2005 do not include prescription drug coverage. You must enroll in a separate Medicare Part D plan to avoid permanent late enrollment penalties.

Are Medigap premiums tax-deductible? Potentially, yes. If you itemize deductions on your federal income tax return, and your total medical and dental expenses exceed 7.5% of your adjusted gross income, your Medigap premiums can be included as a qualifying medical expense.

Can I switch Medigap plans later? You can apply to switch at any time, but you may be subject to medical underwriting and denied coverage unless you qualify for a guaranteed issue right due to a specific life event, like losing other coverage.

Does Plan G cover everything? Plan G is the most comprehensive plan available to new Medicare enrollees. It covers all Medicare-approved gaps except for the Part B annual deductible. Once you pay that deductible yourself (one time per year), Plan G covers 100% of Medicare-approved costs for the rest of the year.

Securing the right Medicare supplement insurance plan is a proactive step toward financial stability in your retirement years. By understanding the standardized plans, comparing costs, and enrolling during your protected initial period, you can gain control over your healthcare expenses. This allows you to focus on your health and well-being without the fear of unexpected medical bills. Remember, this is a long-term decision, so take the time to research and consult with a licensed insurance agent who specializes in Medicare to ensure your choice aligns with your individual needs. For continued updates and detailed analysis on plan changes as 2026 approaches, Read full article for the latest information and expert insights.