Do I Really Need Supplemental Insurance With Medicare?
As someone who’s been guiding individuals through Medicare decisions for years, I often hear the question:
“Do I really need more than Original Medicare?”
It’s a fair question. After all, Original Medicare (Parts A and B) is a strong foundation, covering hospital stays, doctor visits, and other medical services. But like any foundation, it has gaps that can expose you to significant out-of-pocket costs.
Original Medicare doesn’t cover everything. For instance, there’s no maximum out-of-pocket limit for services like hospital stays or outpatient care, and you’ll still be responsible for all of the following:
- Deductibles
- Copayments
- Coinsurance
Plus, it doesn’t include coverage for prescription drugs, dental care, vision, or hearing aids.
This is where supplemental insurance, often called Medigap (or other options like Medicare Advantage plans), comes into play. They can help cover these gaps and give you peace of mind to better prepare you for those surprise medical bills.
Let’s start with an overview of Medigap.
What Is Medicare Supplement Insurance?
Medicare Supplement insurance, also known as Medigap, is a type of private health insurance designed to help fill the “gaps” in Original Medicare coverage. Original Medicare (Parts A and B) provides a solid foundation for healthcare coverage, but it doesn’t cover everything.
Beneficiaries are often left responsible for costs such as deductibles, copayments, and coinsurance, which can add up quickly. This is where Medicare Supplement insurance comes in.
How Medicare Supplement Insurance Works
Medicare Supplement plans are offered by private insurance companies and are standardized in most states, meaning the benefits of each plan type (e.g., Plan G, Plan N) are the same regardless of the insurer.
Here’s what these plans typically do:
Cover Out-Of-Pocket Costs: Medigap plans pay for expenses that Original Medicare doesn’t fully cover, such as:
- Part A hospital deductibles
- Part B coinsurance or copayments
- Skilled nursing facility coinsurance
- Emergency healthcare abroad (in some plans)
Make Things More Predictable: By covering unpredictable costs, Medigap plans give beneficiaries more control over their healthcare expenses, reducing the financial stress of unexpected medical events.
Give You Network Freedom: Unlike Medicare Advantage plans (which often require you to stay within a network) Medigap plans let you see any doctor or specialist in the U.S. who accepts Medicare.
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Remember:
Medigap plans are supplemental, not standalone, and work with Original Medicare. Medicare pays first, and your Medigap plan covers its share based on the plan’s benefits.
What Medigap Doesn’t Cover
While Medigap is valuable for reducing out-of-pocket expenses, it does have limitations. It doesn’t cover:
- Prescription drugs (you’ll need a separate Part D plan for that)
- Long-term care, like custodial nursing home care
- Vision, dental, or hearing services
- Private-duty nursing
Choosing the Right Plan
Most states have ten standardized Medigap plans (labeled A, B, C, D, F, G, K, L, M, and N), each offering different benefits. For example:
- Plan G is a popular choice for comprehensive coverage (except for Part B deductible).
- Plan N is a lower-cost option with some copayments for office visits and ER visits.
Why Consider a Medigap Plan?
A Medigap plan is a smart choice if you want predictable healthcare costs, access to any Medicare-accepting provider, and peace of mind about unexpected medical bills.
It’s particularly appealing to those who travel frequently within the U.S. or anticipate needing significant healthcare services.
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What Medigap is NOT:
Many people mistakenly confuse Medicare Advantage (Part C) plans with Medicare Supplement Insurance (Medigap) when navigating Medicare options.
Although both are designed to help cover healthcare costs, they function very differently.
Let’s walk through the details of Medicare Advantage and discuss why there may be some confusion between the two.
What Is a Medicare Advantage Plan?
Medicare Advantage plans (Part C) are an alternative to Original Medicare. Private insurance companies approved by Medicare offer these plans, which combine Medicare Part A (hospital insurance) and Part B (medical insurance).
Many plans include Part D (prescription drug coverage) and additional benefits like vision, dental, hearing, and wellness programs.
Key Takeaways With Medicare Advantage:
- You get coverage through a private insurance company rather than Original Medicare.
- In most cases, you must use a network of providers (HMO or PPO).
- Out-of-pocket costs vary by plan, and there are annual limits on these costs.
- Costs are more predictable but can increase if you need frequent healthcare services.
Here’s a clearer picture of just how different Medigap and Medicare Advantage are when stacked up against each other.
Key Differences Between Medicare Advantage and Medigap
| Feature | Medicare Advantage | Medigap |
|---|---|---|
| Primary Coverage | Replaces Original Medicare | Works alongside Original Medicare |
| Provider Network | Restricted to plan’s network (HMO/PPO) | No network restrictions |
| Out-of-Pocket Costs | Variable with an annual maximum | Minimal and predictable |
| Prescription Drugs | Often included | Not included; Part D plan needed |
| Additional Benefits | Vision, dental, hearing, etc. | None |
| Premiums | Lower premiums, higher out-of-pocket | Higher premiums, lower out-of-pocket |
Why the Confusion?
One reason people mix up Medicare Advantage and Medigap is aggressive marketing by insurance companies. Many private insurers prioritize Medicare Advantage plans over Medigap because:
#1. Medicare Advantage plans receive funding directly from Medicare, making them more lucrative for insurers.
#2. They often advertise low or $0 premiums, which can be misleading because these plans come with other out-of-pocket costs like copayments, coinsurance, and deductibles.
The frequent advertising and bundled features can make Medicare Advantage seem like a no-brainer. However, people often realize later that the network restrictions, cost-sharing requirements, and limited flexibility don’t meet their needs.
Important: Don’t Be Misled by Marketing!
While Medicare Advantage plans work well for some individuals, they’re not the same as Medigap. Medigap is a better choice if you value flexibility, minimal out-of-pocket costs, and access to any Medicare-accepting provider.
Take some time to consider:
- Your healthcare usage (frequent doctor visits, hospitalizations, etc.)
- Whether you prefer the predictability of Medigap or the lower upfront costs of Medicare Advantage
- If network restrictions would work for your lifestyle
The choice between Medicare Advantage and Medigap is highly personal. Don’t let heavy marketing sway you without understanding the differences.
A Medicare Advantage plan might sound appealing initially, but it isn’t a replacement for Medigap.
The Hidden Costs of Original Medicare
As a Medicare agent, I’ve seen firsthand how relying solely on Original Medicare can leave beneficiaries vulnerable to significant financial risks. While it’s a good starting point, Original Medicare has critical gaps that many people don’t fully understand until they experience the impact directly.
- For example, with Medicare Part B, you’re responsible for 20% of the cost of outpatient services, including doctor visits, diagnostic tests, and chemotherapy.
If you need a $10,000 outpatient procedure, you’ll owe $2,000 out-of-pocket without supplemental coverage.
- Medicare Part A has a deductible of $1,676 per benefit period for hospital stays in 2025. If you’re hospitalized multiple times in a year, you’ll need to pay this deductible each time.
There’s also no annual out-of-pocket maximum, which means your costs can add up indefinitely if you require frequent or extensive medical care.
Real-Life Scenarios: When You Only Have Original Medicare
Let’s look at a few real-life scenarios to understand the risks of relying solely on Original Medicare vs. supplementing with a Medigap plan:
| Scenario | Medical Costs | Original Medicare | Original Medicare + Medigap (Plan G) |
|---|---|---|---|
| 1. Hip Replacement Surgery | $30,000 | – Medicare Part A deductible: $1,676 – 20% of $28,368: $5,673.60 – Total: $7,349.60 |
– Medicare Part A deductible: $1,676 – Medigap covers Part B coinsurance: $0 – Total: $1,676 |
| 2. 5-Day Hospital Stay for Heart Attack | $25,000 | – Part A deductible: $1,676 – Coinsurance (Days 1-5): $0 – Total: $1,676 |
– Part A deductible: $1,676 – Medigap covers remaining costs: $0 – Total: $1,676 |
| 3. Outpatient Chemotherapy (12 Sessions) | $45,000 | – Part B deductible: $257 – 20% coinsurance: $8,954.80 – Total: $9,211.80 |
– Part B deductible: $257 – Medigap covers Part B coinsurance: $0 – Total: $257 |
| 4. Skilled Nursing Facility (SNF) Stay for 45 Days (Post-Stroke Rehab) | $20,000 | – First 20 days: $0 – Days 21-45: $200/day x 25 days = $5,000 – Total: $5,000 |
– First 20 days: $0 – Medigap covers SNF coinsurance for Days 21-100: $0 – Total: $0 |
| 5. Annual Preventive Care + Blood Work | $600 | – Preventive visit: $0 – Blood work (not preventive): 20% of $600: $120 – Total: $120 |
– Preventive visit: $0 – Medigap covers Part B coinsurance for tests: $0 – Total: $0 |
These examples highlight how the gaps in Original Medicare can lead to overwhelming out-of-pocket expenses.
Situations like these are why many beneficiaries choose to add supplemental coverage, providing a safety net for unexpected medical costs.
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Did You Know?
According to the Kaiser Family Foundation, nearly 90% of people in traditional Medicare have some form of additional coverage, such as Medigap.
Peace of Mind With Medigap: A Closer Look
Medigap plans offer more than just financial relief—they provide invaluable peace of mind for beneficiaries. These plans help reduce stress by covering routine visits, lab tests, and major surgeries.
Here are a couple of simple examples:
Margaret, a 73-year-old with chronic health issues, benefits from Medigap Plan F. Her plan provides comprehensive coverage for regular doctor visits, lab work, and even a recent heart surgery, sparing her from the burden of overwhelming medical bills.
Harold, a 76-year-old with diabetes, relies on his Medigap policy to cover much of his medical expenses, including insulin supplies and specialist visits. This allows him to budget confidently without worrying about unexpected costs.
By tackling these common financial worries, Medigap plans help seniors prioritize their health over their finances, offering peace of mind as one of the biggest perks of having supplemental insurance.
Traveling With Supplemental Insurance
For many people, traveling during retirement is a dream come true. But knowing how Medicare works when you’re away is important, especially if you’re heading overseas.
Original Medicare usually doesn’t cover medical care outside the U.S. Luckily, some Medicare Supplement plans—like Plans F, G, and N—can help with foreign travel emergencies. These plans typically cover 80% of emergency medical costs abroad after a $257 deductible, with a lifetime limit of $50,000.
Enrolling in a Medigap plan allows you to travel with peace of mind, knowing you’re ready for any surprises along the way.
How to Choose the Right Medigap Plan
Selecting the right Medigap plan is all about matching your needs with each plan’s benefits.
Here are some key factors to consider:
#1. Doctor Visits: If you anticipate regular doctor visits or specialist visits, consider plans like Plan G or Plan N, which offer excellent coverage for Part B coinsurance and copayments.
#2. Ongoing Prescriptions: While Medigap doesn’t cover prescription drugs, pairing it with a robust Part D plan can give you comprehensive medication coverage. Choose a Medigap plan like Plan G for its all-around coverage, and complement it with the right Part D plan.
#3. Potential Long-Term Care Needs: If you’re concerned about future long-term care, look for a Medigap plan that helps with hospital stays and skilled nursing coinsurance. High Deductible Plan G is a cost-effective option for those looking to balance lower premiums with solid coverage for major medical needs.
When it comes to selecting a supplemental insurance plan, we have a few top picks based on their balance of coverage and affordability:
Our Favorite Medigap Plans
- Medicare Supplement Plan G: Often considered the most comprehensive option for new Medicare enrollees, Plan G covers almost everything except the Part B deductible.
- Medicare Supplement Plan N: This plan offers slightly lower premiums than Plan G while still covering the most significant expenses. However, it requires small copayments for certain doctor visits and emergency room trips.
- Medicare Supplement High Deductible Plan G: This plan is ideal for those who want to keep premiums low while maintaining access to comprehensive coverage once their yearly deductible is met.
How Much Does Medicare Supplement Insurance Cost?
The cost of Medicare Supplement insurance varies based on factors like age, location, and the insurance provider. Below are some sample rates for Medigap Plan G.
Plan G Sample Premiums: 65 y/o Male
| Company | Premium |
|---|---|
| Allstate | $124.09 |
| ACE | $136.75 |
| Aflac | $150.93 |
| Cigna | $154.87 |
| Blue Cross Blue Shield | $157.18 |
| Mutual of Omaha | $158.70 |
| Wellpoint Insurance | $163.09 |
| UnitedHealthcare | $176.12 |
| Aetna | $186.68 |
| Sample quotes are for a 65 y/o nonsmoking male. | |
Plan G Sample Premiums: 65 y/o Female
| Company | Premium |
|---|---|
| ACE | $116.58 |
| Aflac | $121.34 |
| Allstate | $132.44 |
| UnitedHealthcare | $139.82 |
| Cigna | $144.51 |
| Aetna | $149.61 |
| Mutual of Omaha | $175.72 |
| Sample quotes are for a 65 y/o nonsmoking female. | |
When picking a Medigap provider, it’s important to think about more than just the premiums. Things like financial stability, customer service, discounts, and extra perks should all play a role in your decision.
Here are some trusted Medigap companies that we value:
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Allstate:
- Premiums, on average, are 14% more affordable
- Up to 25% stackable discount offerings
- Access to the Active&Fit fitness program
- 30-day trial period
- Dental bundling options
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Aflac:
- 6.7% more affordable premiums
- Up to 7% household discounts
- Positive customer feedback
- Fast claims processing, with most claims being paid within one business day
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Mutual of Omaha:
Our 2025 Mutual of Omaha Review
- Offers Medigap plans in most states
- Vision and hearing discount offerings
- Access to Mutually Well program
- High customer satisfaction ratings
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Aetna:
- Stable and reliable Medigap provider
- 7% household discounts
- Dental and vision policies
- Low annual rate increases
Why a Medicare Supplement Plan Is Worth the Cost
Let’s review some reasons why I believe Medigap plans are worth the cost.
#1. Protection From Unexpected Medical Bills
Even with Medicare, deductibles, copays, and coinsurance can quickly add up, especially for hospital stays or recurring outpatient treatments. Medigap plans help cover these gaps, ensuring that unforeseen medical expenses don’t deplete your savings.
#2. Cost-Effective Coverage
By comparing your total medical bills over the past 6-12 months with the premiums of a Medigap plan, you might find that the plan saves you money in the long run. For individuals who frequently require medical care, the savings can be significant.
#3. Financial Stability on a Tight Budget
A Medigap plan provides predictability and stability for retirees with fixed incomes or minimal savings. Instead of unpredictable bills, you pay a consistent monthly premium.
#4. Freedom to Choose Healthcare Providers
Medigap plans come with the advantage of nationwide coverage and the ability to see any provider that accepts Medicare.
What if I Can’t Afford Medicare Supplement Insurance?
We understand that for some, Medicare Supplement insurance seems financially out of reach, but there are alternative options and resources to help manage healthcare costs.
Option #1. High-Deductible Medigap Plans
If you’re looking for the benefits of a Medigap plan at a more affordable rate, I highly recommend High-Deductible Plan G. This plan offers a budget-friendly alternative by requiring you to pay a deductible—currently set at $2,870 for 2025—before coverage kicks in.
Even with the deductible, it still keeps all the main benefits of traditional Medigap plans, including:
- No network limits
- No referrals or prior authorizations
- Freedom to see any healthcare provider that takes Medicare
HDG is a great option if you’re looking for flexibility and solid coverage without the extra high premiums.
Option #2. Medicare Advantage Plans
Medicare Advantage plans typically offer lower premiums compared to Medigap plans but come with certain trade-offs, including network restrictions, prior authorization requirements, and higher out-of-pocket expenses. They can be a practical choice for individuals comfortable managing these challenges.
Option #3. State Assistance Programs
Several states provide Medicare Savings Programs designed to assist low-income beneficiaries in covering expenses such as premiums, deductibles, and coinsurance.
Options like the Qualified Medicare Beneficiary (QMB) program or the Specified Low-Income Medicare Beneficiary (SLMB) program are valuable resources worth considering.
Let’s break down some real-life scenarios if you’re looking at High-Deductible Plan G, Medicare Advantage, or Medicaid.
| Scenario | Medical Costs | High-Deductible Medigap Plan G | Medicare Advantage | Medicaid |
|---|---|---|---|---|
| 1. Hip Replacement Surgery | $30,000 | – Pays Medicare Part A deductible: $1,676 – Then 100% up to $2,870 deductible – After deductible, Medigap covers Part B coinsurance: $0 – Total: $2,870 |
– MA plan covers surgery cost minus copays (e.g., $500 for surgery, $350/day hospital) – Total: $2,350 |
– Medicaid covers all Medicare cost-sharing – Total: $0 |
| 2. 5-Day Hospital Stay for Heart Attack | $25,000 | – Pays Medicare Part A deductible: $1,676 – Medigap covers costs after deductible – Total: $2,870 |
– MA covers hospital stay minus copays (e.g., $350/day for 5 days: $1,750) – Total: $1,750 |
– Medicaid covers all Medicare cost-sharing – Total: $0 |
| 3. Outpatient Chemotherapy (12 Sessions) | $45,000 | – Member pays 100% up to $2,870 deductible – After deductible, Medigap covers Part B coinsurance: $0 – Total: $2,870 |
– MA covers chemotherapy minus copay (e.g., $40/session x 12 = $480) – Total: $480 |
– Medicaid covers all Medicare cost-sharing – Total: $0 |
| 4. Skilled Nursing Facility (SNF) Stay (45 Days) | $20,000 | – Days 1-20: $0 (Medicare covers) – Days 21-45: Member pays deductible up to $2,870, then Medigap covers SNF coinsurance – Total: $2,870 |
– MA covers SNF stay minus copay (e.g., $200/day for Days 21-45: $5,000) – Total: $5,000 |
– Medicaid covers all Medicare cost-sharing – Total: $0 |
| 5. Annual Preventive Care + Blood Work | $600 | – Preventive care: $0 – Pays 100% of $257 Part B deductible, then Medigap covers blood work coinsurance: $0 – Total: $257 |
– Preventive care: $0 – Blood work copay (e.g., $30): $30 – Total: $30 |
– Medicaid covers all Medicare cost-sharing – Total: $0 |
It’s important to evaluate all available options and speak with a licensed Medicare agent or benefits counselor to find the best solution for your financial situation.
How Do I Enroll in a Medicare Supplement Plan?
Your ability to enroll in a Medigap plan depends heavily on your timing and situation.
Let’s explore what you need to know based on your specific Medicare journey.
#1. For the Medicare Newcomer: The Critical Open Enrollment Window
If you’re new to Medicare, timing is everything when enrolling in a Medigap plan.
Enrollment Window: Your Medigap Open Enrollment Period begins the first month you’re both 65 or older and enrolled in Medicare Part B. This window lasts six months.
Guaranteed Issue Rights: During this period, insurance companies cannot deny you a Medigap policy or charge higher premiums due to pre-existing conditions.
Act Quickly: If you miss this window, future enrollment could require medical underwriting unless you qualify for a special exception.
Key Takeaway: Use your six-month Medigap Open Enrollment Period wisely. After it closes, obtaining coverage could become significantly more challenging.
#2. For the Medicare Advantage User: Transitioning to Medigap
Switching from a Medicare Advantage (MA) plan to a Medigap policy requires careful planning and understanding of the rules.
When to Switch: You can leave your MA plan and return to Original Medicare during these times:
- Annual Enrollment Period (AEP): October 15 to December 7.
- Medicare Advantage Open Enrollment Period: January 1 to March 31.
Medical Underwriting: After your first 12 months on an MA plan, you’ll likely need to undergo medical underwriting to get a Medigap plan. Insurers can deny coverage or charge higher premiums based on your health.
Trial Right Exception: If you’re within your first 12 months of trying a Medicare Advantage plan and decide to switch back to Original Medicare, you have a guaranteed right to buy a Medigap policy without underwriting.
Key Takeaway: If you’ve been on a Medicare Advantage plan for over a year, expect medical underwriting when transitioning to a Medigap plan unless you qualify for a special exception.
#3. For Long-Time Medicare Users: Adding Medigap After Years Without It
The process may be more complicated if you’ve relied solely on Original Medicare for years and want to add a Medigap plan.
Medical Underwriting: Since your initial Medigap Open Enrollment Period has passed, most states allow insurers to review your health history. You may face higher premiums or even denial if you have pre-existing conditions.
State-Specific Rules: Some states, like New York or Connecticut, have guaranteed issue rights year-round. In these states, you can enroll in a Medigap plan without underwriting at any time.
Special Enrollment Opportunities: Certain life events, such as losing employer coverage, might trigger a guaranteed issue right, allowing you to buy a Medigap plan without underwriting.
Key Takeaway: If you’re in good health, applying now could lock in coverage before health issues arise. If you’ve waited too long, check your state’s rules or look for special enrollment opportunities.
Bottom Line: Is Medigap Worth It?
The short answer is yes, Medigap is absolutely worth it. Supplemental insurance protects you from the financial unknowns that Original Medicare simply can’t cover.
Whether managing the costs of chronic conditions, safeguarding against high hospital bills, or ensuring peace of mind while traveling abroad, supplemental plans like Medigap ensure that your focus remains on your health—not the costs.
Our licensed agents are here to help you explore your options and find the Medigap plan that’s the best fit for you. Feel free to reach out—we’re happy to help!
Sources: Medicare.gov
FAQs
- When is the best time to enroll in a Medicare Supplement plan?
- Does Medigap cover prescription drugs?
- How are Medigap premiums determined?
