For most people on Original Medicare, a Medigap policy is worth the monthly premium because it protects you from potentially unlimited out-of-pocket costs. Original Medicare has no annual cap on what you can spend, and a single hospitalization or ongoing treatment can quickly add up to thousands of dollars. A supplemental plan turns those unpredictable expenses into a fixed monthly cost you can budget around.
Whether it makes sense for you depends on your health, your finances, and how much risk you’re comfortable carrying. Here’s what you need to weigh.
What Original Medicare Leaves You Paying
Medicare Part A and Part B cover a lot, but the gaps are significant. In 2026, the Part A deductible is $1,736 per hospital benefit period, and you can owe that deductible more than once in a year if you’re readmitted. After the first 60 days of a hospital stay, you pay $434 per day for days 61 through 90, and $868 per day if you dip into your 60 lifetime reserve days. After those reserve days run out, you pay everything.
Skilled nursing facility care follows a similar pattern: the first 20 days are covered, but days 21 through 100 cost you $217 per day. After day 100, Medicare pays nothing.
On the Part B side, you pay a $283 annual deductible, then 20% of the Medicare-approved amount for most outpatient services, doctor visits, and durable medical equipment like wheelchairs or hospital beds. Twenty percent sounds manageable until you consider that a $50,000 surgery leaves you with a $10,000 bill, and a $200,000 cancer treatment course means $40,000 out of your pocket.
The critical detail: Original Medicare has no yearly out-of-pocket maximum. There is no ceiling on what you could owe in a given year. That open-ended exposure is the main reason supplemental insurance exists.
What a Medigap Policy Covers
Medigap plans are standardized by letter (Plan A, Plan B, Plan G, Plan N, and so on). The benefits for each letter are identical regardless of which insurance company sells it. A Plan G from one insurer covers exactly the same things as a Plan G from another. The only difference between companies is the premium.
The most popular plan, Plan G, covers the Part A deductible, Part A coinsurance for extended hospital stays, skilled nursing facility coinsurance, the Part B coinsurance (that 20% you’d otherwise owe), and Part B excess charges if a doctor bills above the Medicare-approved amount. The one thing Plan G doesn’t cover is the Part B deductible of $283 per year, which you pay yourself.
Plan N is another common choice. It covers most of the same gaps but requires small copays for some office visits (up to $20) and emergency room visits ($50 if you’re not admitted). In exchange, Plan N premiums are typically lower than Plan G.
A high-deductible version of Plan G is also available. You pay a set deductible out of pocket before the plan kicks in, but the monthly premium is significantly lower. This option works well if you’re generally healthy and want catastrophic protection without high monthly costs.
How Much Medigap Premiums Cost
Premiums vary widely based on your age, where you live, and which insurer you choose. For the same Plan G in the same zip code, one company might charge $150 a month while another charges $250 or more. Shopping around is essential because the coverage is identical by law.
Many insurers offer discounts for non-smokers, married couples, electronic payments, or paying annually instead of monthly. Some sell Medicare SELECT policies that require you to use specific providers in exchange for a lower premium.
How a company prices its policies also matters for the long run. Some insurers use “community-rated” pricing, where everyone pays the same base premium regardless of age. Others use “issue-age” pricing, which locks your rate to the age when you bought the policy (though premiums still rise with inflation). “Attained-age” pricing starts lower but increases as you get older, which can make the policy expensive in your 70s and 80s, right when you need it most. Ask how the company sets its rates before you buy.
When Medigap Makes Financial Sense
The math is straightforward. If your monthly premium is, say, $180 for Plan G, you’re paying $2,160 a year. Without that plan, a single hospital stay could cost you $1,736 just for the deductible, plus 20% of every Part B service you receive. One serious illness or injury in a year can easily exceed what you’d pay in premiums over several years.
Medigap tends to be most valuable if you have chronic conditions requiring frequent doctor visits, lab work, or specialist care. It’s also valuable if you travel within the U.S. and want to see any doctor who accepts Medicare, since Medigap works with Original Medicare’s broad provider network. And it’s especially worth considering if you’re on a fixed income and can’t absorb a surprise $10,000 or $20,000 medical bill.
On the other hand, if you’re in excellent health, have substantial savings you could draw on for medical costs, and are comfortable self-insuring against the risk of a large bill, you might decide to skip Medigap and keep those premium dollars invested. The trade-off is real financial exposure if something unexpected happens.
How Medigap Compares to Medicare Advantage
Medicare Advantage (Part C) is the main alternative to pairing Original Medicare with a Medigap plan. Advantage plans bundle hospital, medical, and often drug coverage into one plan, frequently with $0 or low monthly premiums. Many include dental, vision, and hearing benefits that Original Medicare doesn’t cover.
The trade-off is flexibility. Medicare Advantage plans typically limit you to a network of providers and charge more, or refuse to pay entirely, for out-of-network care. With Original Medicare plus Medigap, you can see any doctor or hospital in the country that accepts Medicare, with no referrals needed.
Advantage plans do include an annual out-of-pocket maximum, which Original Medicare lacks. But those maximums can run into the thousands, and you’re still paying copays and coinsurance along the way. A Medigap plan like Plan G effectively brings your out-of-pocket costs close to zero beyond the premium and the Part B deductible.
You generally cannot use a Medigap plan alongside a Medicare Advantage plan. It’s one path or the other. If you’re currently on Medicare Advantage and want to switch to Original Medicare with Medigap, you may face medical underwriting (health questions that can raise your premium or result in denial), depending on your state’s rules.
Why Enrollment Timing Matters
Your best window to buy a Medigap policy is during the Medigap Open Enrollment Period: the six months starting the first day of the month you turn 65 and are enrolled in Part B. During this window, insurers must sell you any plan they offer at the standard price, regardless of your health. They cannot charge more because of pre-existing conditions or deny you coverage.
Once that six-month window closes, there is no federal requirement that an insurer sell you a policy at all. If you apply later, the company can use medical underwriting to evaluate your health, charge a higher premium, or decline your application. Some states have additional protections that extend guaranteed-issue rights, so check with your state insurance department if you’ve missed the federal window.
This timing rule is one of the strongest arguments for buying Medigap sooner rather than later. If you wait until you develop a health condition, you may not be able to get a policy, or you may pay substantially more. Locking in coverage during open enrollment, even if you’re healthy at 65, secures your access to affordable supplemental insurance for the rest of your life.
Who Should Think Twice
Medigap isn’t the right fit for everyone. If you’re eligible for both Medicare and Medicaid, Medicaid already covers most of the costs that a Medigap plan would, so paying a premium would be redundant. If you’re still working at 65 and have employer-sponsored coverage that acts as secondary insurance to Medicare, you may not need Medigap until that employer coverage ends.
People with very limited budgets may find that a $0-premium Medicare Advantage plan provides adequate coverage at a lower total cost, especially if they’re comfortable using in-network providers. The key is understanding you’re trading provider flexibility and predictability for a lower monthly outlay.
For most retirees relying on Original Medicare as their primary coverage, a Medigap policy converts an open-ended financial risk into a manageable monthly expense. The premium is the price of knowing that a health crisis won’t also become a financial one.