Do You Really Need Medicare Supplement Insurance?

Original Medicare has two structural cost gaps: a $1,736 Part A deductible per benefit period in 2026 and 20% Part B co-insurance on outpatient services with no annual cap. Medicare Supplement insurance, also called Medigap, is private health insurance that pays costs Original Medicare doesn't cover. Medicare pays its share first. Your Medigap plan then covers the remainder up to its benefit limits. Medigap requires enrollment in Original Medicare Parts A and B and can't be paired with Medicare Advantage.

Medicare Supplement plans cover the out-of-pocket costs Original Medicare doesn't pay, the Part A deductible and Part B co-insurance. Foreign travel emergencies are also covered. Coverage varies by plan letter.

Medigap is worth the cost if you see specialists regularly or couldn't absorb a $1,736 hospital deductible plus uncapped 20% co-insurance in a bad year. Frequent travelers benefit too. Medigap has no network restrictions. Any provider who accepts Medicare qualifies, anywhere in the country. The 20% Part B co-insurance has no cap. A beneficiary with $100,000 in covered outpatient costs in a year owes $20,000. Plan G premiums average $150 to $250 a month depending on age and state.

In our analysis of Medicare claims patterns by age group, Medigap's value grows with age. A 65-year-old on Plan G pays $2,640 in premiums in year one. A 75-year-old pays $16,740 over five years. For enrollees with even one hospitalisation or an ongoing course of treatment in that window, covered claims routinely exceed that figure. 
Three questions determine whether Medigap is worth the premium for your situation. Do you see specialists or receive ongoing treatment? Do you travel outside your home state or abroad? And could you absorb a $1,736 hospital deductible plus uncapped 20% co-insurance in a single bad year without financial strain? If you answered no to any of these, Medigap will almost certainly save you money.

Buy Medigap during your Open Enrollment Period, the six-month window that starts the month you turn 65 and are enrolled in Part B. During this window, insurers can't deny coverage or charge higher premiums based on health status. Outside this window, medical underwriting applies in most states. A pre-existing condition will result in higher premiums or denial in those states.

Skipping Medigap is the right call in two situations:

1. You're enrolling in Medicare Advantage, its network-based structure covers most of the same cost gaps at a $0 monthly premium beyond Part B.
2. You're in excellent health with low expected utilization and have enough savings to absorb a $1,736 hospital deductible plus uncapped 20% co-insurance in a bad year, Original Medicare alone may serve you well.

Medicare Supplement premiums vary by plan, age and insurer. Most people pay between $110 and $300 per month. MoneyGeek reviewed average plan rates across insurers in multiple states for a 65-year-old and 75-year-old nonsmoker profile to build the table below. Plan G, averages $220 per month at age 65 and $279 at age 75.

The gap between Plan K at $110 and Plan C at $294 per month at age 65 is $184. Plan K covers only 50% of several cost categories and carries a $8,000 out-of-pocket limit in 2026. Plan C covers nearly everything. For most 65-year-olds with any history of chronic illness, the $184 monthly difference is the cheaper option once claims start.

Medicare offers 10 standardized Medigap plans, labeled A, B, C, D, F, G, K, L, M and N. Each covers a different mix of out-of-pocket costs. The letters reflect benefits, not quality tiers.

The three most widely held plans across all current enrollees are G, F and N. Plan G covers everything Plan F does, with one difference: it doesn't pay the Part B deductible ($283 in 2026). Plan N covers the Part A deductible and Part B co-insurance but adds a copay of up to $20 for office visits and $50 for emergency room visits and it doesn't cover Part B excess charges.

Plan G suits enrollees who want no billing surprises at the point of care. Plan N costs $30 to $50 less per month than Plan G. For enrollees in good health who can manage copays of up to $20 per visit, that gap saves $360 to $600 per year.

Medigap and Medicare Advantage are mutually exclusive. Medigap pairs with Original Medicare and carries no network restrictions, you can see any provider who accepts Medicare anywhere in the country. Medicare Advantage restricts enrollees to a plan network and requires prior authorization for specialist care and many procedures.

Most Medicare Advantage plans carry a $0 monthly premium beyond Part B. That $0 comes with cost-sharing at each visit and a plan-set annual maximum out-of-pocket limit, which averaged $5,106 in 2026 across all plan types. Medigap plans charge an additional monthly premium but eliminate most out-of-pocket costs at the point of care. With Plan G, the average beneficiary pays little beyond the monthly premium and the $257 annual Part B deductible.  

No Medigap plan covers dental or vision benefits. Hearing coverage isn't included either. Medicare Advantage is the better choice if those benefits matter to you. For frequent travelers and anyone who sees specialists outside a local network, Medigap is the right fit. There are no network restrictions and any provider who accepts Medicare qualifies.

Most people enrolling in Medicare at 65 need Medigap. The 20% Part B co-insurance has no annual ceiling. One cancer diagnosis or cardiac event can generate $20,000 or more in co-insurance alone. A major surgery can too.

Original Medicare alone works if you're enrolling in Medicare Advantage, which replaces the cost-sharing structure entirely. It also works if you're in excellent health with enough savings to cover a $1,736 Part A deductible. You'd also need to accept the risk of uncapped 20% co-insurance in a bad year.

For enrollees with any history of chronic illness, ongoing treatment or regular specialist visits, Plan G is the right starting point. Plan N is the better fit if you're in good health, rarely need specialist care and can manage copays of up to $20 per visit. It covers every major cost gap Original Medicare leaves open except the $257 Part B deductible. At $220 a month at age 65, the annual premium is $2,640. A single hospital stay or a course of outpatient chemotherapy each cost more than $2,640 without Medigap. So does a month in skilled nursing care.

We've answered the most frequently asked questions about Medicare Supplement insurance: