The Coverage Gap That Could Cost You Thousands

You’ve probably heard plenty about Medicare Parts A and B, but here’s what might surprise you: traditional Medicare only covers about 80% of your medical expenses. That remaining 20% can add up to thousands of dollars annually, especially when you’re dealing with serious health conditions or frequent medical care. Medicare Supplement Insurance, also called Medigap, fills these gaps by covering deductibles, copayments, and coinsurance that Medicare leaves behind.

Despite being available to all Medicare beneficiaries, Medigap policies remain one of the most underutilized insurance products in America. Many seniors discover these gaps the hard way, receiving unexpected bills for services they assumed Medicare would cover completely.

What Original Medicare Doesn’t Cover

Medicare Part A covers hospital stays but leaves you responsible for a $1,632 deductible per benefit period in 2025. After 60 days in the hospital, you’ll pay $408 daily through day 90. Part B requires a $240 annual deductible, then covers 80% of approved medical services, leaving you to pay the remaining 20% with no annual limit.

Here’s where costs can spiral quickly: if you need a $50,000 surgery, Medicare pays $40,000 after you meet your deductible, but you’re still responsible for $10,000. Without supplemental coverage, these out-of-pocket expenses can quickly drain retirement savings.

Medicare also doesn’t cover prescription drugs, dental care, vision services, hearing aids, or long-term care.

The Most Popular Medigap Plans

Medigap policies are standardized by the federal government, meaning Plan G from one insurance company provides identical benefits to Plan G from another company. The main difference between insurers is price and customer service quality.

Plan G has become the most popular option because it covers nearly all out-of-pocket costs except the Part B deductible. Plan F offers the most comprehensive coverage but is only available to people who became eligible for Medicare before January 1, 2020.

Plan N provides substantial coverage at lower premiums but requires copayments of up to $20 for office visits and $50 for emergency room visits. High-deductible versions of Plans F and G require you to pay a $2,800 deductible in 2025 before coverage begins, but they offer significantly lower monthly premiums.

When You Can Enroll and Why Timing Matters

Your Medigap Open Enrollment Period begins the month you turn 65 and enroll in Medicare Part B, lasting for six months. During this window, insurance companies cannot deny coverage or charge higher premiums based on your health conditions. This guaranteed issue right is crucial because Medigap insurers can require medical underwriting outside of this period.

Here’s a heads-up that could save you serious money: if you miss this initial enrollment window, you might face higher premiums, coverage exclusions for pre-existing conditions, or outright denial of coverage. However, you can get guaranteed issue rights when you lose employer health coverage, move out of a Medicare Advantage plan’s service area, or if your Medicare Advantage plan leaves the program.

Cost Factors and Money-Saving Strategies

Medigap premiums vary significantly by location, insurance company, and pricing method. Monthly premiums for Plan G typically range from $100 to $300, depending on your location and the insurance company. While this might seem expensive, it can save thousands annually if you need significant medical care.

Compare prices from multiple insurers since benefits are standardized but costs aren’t through the Medicare Plan Finder tool. Look for companies with strong financial ratings and good customer service records. Some insurers offer discounts for non-smokers, people who pay annually, or those who’ve been claim-free.

Many insurers offer household discounts when both spouses purchase Medigap policies from the same company. These discounts can range from 5% to 12% and continue as long as both policies remain active.

For personalized help navigating these options, contact your State Health Insurance Assistance Program for free counseling and plan comparisons.

Underutilized Benefits and Common Mistakes

Some Medigap plans include additional benefits that insurers don’t heavily advertise. These might include limited coverage for emergency care while traveling abroad, prescription drug discounts before you enroll in Part D, access to nurse hotlines and wellness programs, or even gym membership reimbursements and preventive care incentives.

Here’s something many people miss: certain insurers offer “value-added” services like 24/7 telemedicine consultations, medication therapy management, or discounts on hearing aids and vision care that aren’t part of standard Medicare coverage.

Don’t assume Medicare Advantage is automatically better than Original Medicare with Medigap just because it often costs less monthly. Medicare Advantage plans typically have networks, prior authorization requirements, and annual out-of-pocket limits that can affect your care access and costs.

Research insurance companies carefully since you’ll likely keep your Medigap policy for many years. Look for insurers with stable rate histories, strong financial ratings from AM Best, and responsive customer service departments. You can also check complaint ratios through your state insurance department before making your final decision.