Medicare provides essential health coverage for millions of Americans, but it doesn't cover all healthcare expenses. Medicare Part A and Part B - collectively known as “Original Medicare” - provides comprehensive coverage, but it has some significant “gaps” that can leave beneficiaries open to unexpected out of pocket costs. Medicare Supplement plans, also known as Medigap plans, are designed to fill these gaps, reducing financial burdens for beneficiaries.

It’s essential to recognize these coverage gaps and explore ways to minimize your out-of-pocket expenses. Pairing Original Medicare with additional coverage, such as a Medigap Plan or Medicare Advantage Plan, can help protect you from unexpected healthcare costs. Here, we’ll take a look at these gaps and delve into three popular Medigap plans - Plan G, Plan N, and High Deductible Plan G - that can help beneficiaries reduce their financial liability.

The Gaps in Original Medicare

Original Medicare consists of Part A (Hospital Insurance) and Part B (Medical Insurance). While comprehensive, it leaves gaps in coverage leading to out-of-pocket expenses for beneficiaries:

Part A Deductible: In 2025, beneficiaries must pay a deductible of $1,676 per benefit period before hospital coverage begins. A benefit period begins the day you are admitted to a hospital or to a Skilled Nursing Facility, and ends the day you have been out of the hospital or SNF for 60 days in a row.

Part A Coinsurance: Medicare covers the first 60 days of hospitalization. After that, beneficiaries are responsible for daily coinsurance costs - $419 per day for days 61-90; Beyond that, $838 per day (using Lifetime Reserve days).

Skilled Nursing Facility (SNF) Coinsurance: Medicare covers the first 20 days in a SNF. Beyond that, daily coinsurance applies - $209.50 per day for days 21-100.

Part B Deductible: An annual deductible of $257 (in 2025) applies before Medicare starts covering outpatient services.

Part B Coinsurance: After meeting the deductible, beneficiaries typically pay 20% of the Medicare-approved amount for medical services.

Excess Charges: Some providers may charge more (up to 15%) than the Medicare-approved amount, leaving beneficiaries responsible for the difference. Note: Excess charges are not allowed in some states (like Pennsylvania).

These gaps can lead to significant out-of-pocket expenses, making it crucial to consider additional coverage options.

For a deeper dive into Medicare's gaps and their impact on beneficiaries, you can refer to our detailed blog: Six Medicare Gaps and How to Fill Them.

*Six Medicare Gaps in 2025. These numbers are subject to change yearly. *Excess charges are not allowed in some states (like Pennsylvania).*

Medigap Plans: An Overview

Medigap plans are designed to offer additional coverage for beneficiaries, but it’s important to understand how they work. Here are some key points about Medigap plans:

Administered by Private Carriers: Medigap plans are offered by private insurance companies, giving you different options in terms of cost and coverage.

Standardized Plans: Medigap plans are standardized by the federal government, meaning each plan with the same letter offers the same benefits, regardless of the insurer. However, it's important to note that Massachusetts, Minnesota, and Wisconsin have their own unique Medigap plans, which may differ from the national standard.

Only Works with Original Medicare: These plans work exclusively with Original Medicare (Medicare Parts A and B), not Medicare Advantage plans.

Pay Upfront: Beneficiaries must pay monthly premiums for Medigap coverage, which can add to their healthcare costs.

Take a look at the below chart which lists the standardized plans in order from most comprehensive to least comprehensive.

Exploring the Pros and Cons of Medigap Coverage

Medigap plans offer several advantages for those seeking more comprehensive healthcare coverage alongside Original Medicare. Here are some of the key benefits:

Pros of Medigap Plans:

✅ Comprehensive Coverage: Medigap helps cover the gaps in Medicare, such as copayments, coinsurance, and deductibles, offering a broader safety net for healthcare expenses.

✅ Portable (No Networks): Medigap plans are not tied to a network, meaning you can see any doctor or specialist who accepts Medicare, even when traveling or moving to a new area.

✅ No Prior Authorizations: Unlike some Medicare Advantage plans, Medigap doesn’t require prior authorizations for services, simplifying access to needed care.

✅ Fixed Cost / Easy to Budget: With Medigap, you pay a fixed monthly premium, which makes it easier to predict and manage your healthcare costs throughout the year.

✅ Lifetime Policy: Once you’re enrolled in a Medigap plan, you’re generally guaranteed renewal as long as you continue to pay your premiums, offering long-term stability.

✅ Some Foreign Travel Emergency Coverage: Medigap plans G, N , F and C cover certain emergency medical expenses incurred while traveling outside the U.S., providing extra peace of mind when abroad.

Cons of Medigap Plans:

🟥 Higher Premiums: Medigap plans often come with higher monthly premiums compared to Medicare Advantage plans, which can add to your overall healthcare costs. Moreover, Medigap premiums can increase as you get older.

🟥 No Prescription Drug Coverage: Medigap plans don’t include prescription drug coverage, so you’ll need to enroll in a standalone Part D plan to cover your medications.

🟥 No Dental, Vision, or Hearing coverage: Medigap plans don’t include dental, vision or hearing coverage, so you’ll need to enroll in a standalone DVH plan if you want those services covered.

🟥 Limited to Original Medicare: Medigap works only with Original Medicare (Parts A and B), so if you switch to a Medicare Advantage plan in the future, you’ll lose Medigap coverage.

Exploring Medigap Plans G, N, and High Deductible G: What’s Right for You?

Let’s explore three popular options currently available to newly eligible beneficiaries: Plan G, Plan N, and High Deductible Plan G. Each of these plans offers unique features and benefits, making it important to understand which one might best suit your healthcare needs and budget. Note: Plans F and C are only available to individuals who were eligible for Medicare before 2020. If you became eligible after that, these plans are not an option for enrollment.

Medigap Plan G

Plan G provides comprehensive coverage, filling in all Medicare Part A and Part B gaps except for the Part B deductible. In other words, it covers five out of the six major gaps, making it the most comprehensive Medigap option available to newly eligible beneficiaries. Additionally, Plan G offers some foreign travel coverage, providing added peace of mind for those who may travel outside of the U.S.

Pros/Cons of Medigap Plan G

Plan G offers comprehensive coverage, minimizing out-of-pocket expenses once the Part B deductible ($257 in 2025) is met, making it an ideal choice for those looking for extensive protection. The predictable costs associated with this plan also make budgeting easier. However, one downside is that Plan G comes with higher monthly premiums compared to other Medigap plans. Additionally, while it covers most gaps in Medicare, it does not include coverage for the Part B deductible.

Medigap Plan N

Plan N offers coverage for all Medicare Part A gaps and the Part B coinsurance, making it a strong option for those seeking substantial coverage. However, it does not cover the Part B deductible or Part B excess charges. In other words, it covers four out of the six gaps in Medicare. However, enrollees may face a $20 copay for some office visits and up to a $50 copay for emergency room visits that do not result in inpatient admission. Plan N also provides some foreign travel coverage, offering added protection for those traveling outside the U.S.

Pros/Cons of Medigap Plan N

Plan N offers lower monthly premiums compared to Plan G, making it a more affordable option for those looking to reduce healthcare costs. It provides comprehensive coverage with predictable copayments for doctor and emergency room visits, which can help with budgeting. However, beneficiaries are responsible for Part B excess charges if their provider doesn’t accept Medicare assignment, although some states, like Pennsylvania, don’t allow these charges anyway. Additionally, copayments for doctor and emergency room visits can add up over time, potentially increasing out-of-pocket costs.

Medigap High Deductible Plan G (HDG)

High Deductible Plan G (HDG) can be a bit confusing at first glance. For 2025, the deductible for HDG is set at $2,870, but it's important to note that this DOES NOT mean you have NO coverage until the deductible is met.

Think about it like this: if you only had Original Medicare (no Medigap plan), Medicare would still provide some coverage, right? You would be responsible for what Medicare does not cover. For example, if you had a ten day hospital stay, you would be responsible for the Part A deductible of $1,676, but after you meet the deductible, Medicare would cover the remaining costs of your hospital stay.

Now let’s pretend you have a HDG in the above scenario. You would be responsible for the $1,676 Part A deductible then the rest of your hospital stay would be covered under Medicare (the $1,676 would count toward your $2,870 HDG deductible; you would then have $1,194 remaining to meet your HDG deductible). In other words, you would be responsible for what Medicare does not cover UP TO $2,870. Because of this, I like to think of the $2,870 as a maximum out-of-pocket limit as opposed to a traditional deductible. After you've paid the remaining $1,194 in other out-of-pocket healthcare costs, your HDG would begin to operate just like a traditional Plan G.

Pros/Cons of Medigap High Deductible Plan G

High Deductible Plan G offers lower monthly premiums, making it a cost-effective option for individuals who prefer lower upfront costs. Once the high deductible is met, it provides comprehensive coverage just like a traditional Plan G. However, the plan comes with high out-of-pocket costs until the deductible is reached, which can be a financial strain for those with frequent medical needs. As a result, it may not be suitable for beneficiaries who expect regular healthcare expenses throughout the year.

Choosing the Right Plan

Choosing the right Medigap plan depends on your healthcare needs and financial situation.

Plan G: Ideal for those seeking comprehensive coverage, Plan G fills most gaps in Medicare, including hospital and medical costs. It’s perfect for individuals who prefer predictable out-of-pocket expenses and are comfortable paying higher premiums for peace of mind.
Plan N: Suitable for beneficiaries who are comfortable with occasional copayments (like $20 for office visits and $50 for emergency room visits) and potential Part B excess charges. However, in states like Pennsylvania, excess charges are not allowed, so this may not be a big concern. It offers lower premiums, making it a good option for those looking to save on monthly costs while still covering most of their needs.
High Deductible Plan G: Best for individuals who prefer lower premiums and are willing to pay a higher deductible before full coverage kicks in. This plan is ideal for those who don’t anticipate frequent medical needs and are comfortable with the higher out-of-pocket costs upfront.

It's essential to assess your healthcare usage and financial comfort with premiums and out-of-pocket costs when choosing a plan. Consulting with a licensed expert is always recommended!

Summary

Medigap plans help cover the gaps left by Original Medicare, providing beneficiaries with more comprehensive coverage and predictable costs. Plan G offers the most extensive coverage, Plan N is more affordable with copayments, and High Deductible Plan G has the lowest premiums but a higher deductible. Choosing the right plan depends on your healthcare needs and budget. It’s always recommended to consult with an independent Medicare broker, like me, who can help you navigate the options and find the best plan for your situation. At Care Compass, we can help guide you on your Medicare journey. Don’t wait - get started today!

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