How Medigap Plans Can Reduce Your Medical Expenses

medigap plans

Some people know that Original Medicare does not pay for all medical costs, leaving beneficiaries vulnerable to out-of-pocket expenses. That’s why having Medigap plans is important. Medigap helps individuals manage and lessen the financial strain that comes with rising healthcare costs and inflation by paying a portion of their medical expenses. If you’re on the fence about knowing how Medigap plans can reduce your medical expenses, this post provides valuable information and tips to help you make informed decisions about different plans available, coverages, and benefits.

When Can I Buy Medigap Plans?

You can typically buy a Medigap (Medicare Supplement Insurance) plan during the Medigap Open Enrollment Period, which starts the first day of the month that you’re both 65 or older and enrolled in Medicare Part B. This period lasts for 6 months. During this time, insurance companies cannot deny you coverage or charge you more due to pre-existing conditions.

However, there are also certain circumstances that may qualify you for a guaranteed issue right outside of the initial enrollment period, such as if you’re losing certain types of health coverage or if you’re moving out of your plan’s service area. These situations trigger special enrollment periods where you can buy a Medigap policy without being subject to medical underwriting.

It’s important to understand the specific rules and regulations that apply to your situation, so it’s often wise to consult with a Medicare specialist or insurance broker to explore your options.

What Are the Benefits of Medigap Insurance Plans?

It’s important to note that Medigap plans are standardized and regulated by the government, meaning that each plan type (identified by letters, such as Plan A, Plan B, etc.) offers the same basic benefits, regardless of which insurance company sells it. However, costs and availability may vary depending on the insurance company and location. 

Additionally, Medigap plans do not cover prescription drugs, so you may need to purchase a separate Medicare Part D plan for prescription drug coverage. Medigap provides peace of mind and additional financial protection to Medicare beneficiaries, helping to fill the gaps in coverage left by Original Medicare.

There are several benefits to having a Medigap (Medicare Supplement Insurance) plan:

  • Coverage of Out-of-Pocket Costs —- Medigap helps cover certain out-of-pocket costs associated with Original Medicare, such as deductibles, coinsurance, and copayments. This can provide financial protection and predictability for your healthcare expenses.
  • Freedom to Choose Providers —- With Medigap, you can typically see any healthcare provider who accepts Medicare patients without the need for referrals or network restrictions. This flexibility can be particularly beneficial if you have preferred doctors or specialists.
  • No Network Restrictions —- Unlike many Medicare Advantage plans, which often have network restrictions, Medigap plans typically do not have network limitations. This means you can receive care from any healthcare provider nationwide who accepts Medicare patients.
  • Predictable Costs —- Since Medigap plans help cover Medicare’s out-of-pocket costs, you can more easily budget for your healthcare expenses. With the right Medigap plan, you can minimize unexpected medical bills and avoid financial surprises related to healthcare.
  • Guaranteed Renewability —- As long as you pay your premiums, your Medigap policy is guaranteed renewable. This means the insurance company cannot cancel your coverage as long as you continue to pay your premiums on time, regardless of any changes in your health status.
  • Portability —- Medigap plans are typically portable, meaning you can keep your coverage if you move to a different state, as long as the insurance company offers plans in your new location.

How Does Medigap Plans Reduce Your Medical Expenses?

Medigap Plans reduce medical expenses by covering or offsetting many of the out-of-pocket costs associated with Original Medicare, providing beneficiaries with greater financial security and peace of mind.

  1. Coverage of Deductibles

Medigap plans can cover or partially cover the deductibles associated with Medicare Part A (hospital insurance) and Part B (medical insurance). By covering these deductibles, Medigap plans reduce the initial out-of-pocket expenses that beneficiaries would otherwise have to pay before Medicare coverage kicks in.

  1. Coverage of Coinsurance and Copayments

Medicare beneficiaries are responsible for coinsurance and copayments for certain covered services under Part A and Part B. Medigap plans help reduce or eliminate these coinsurance and copayment costs, thereby lowering the overall amount that beneficiaries have to pay for healthcare services.

  1. Coverage for Excess Charges 

Some healthcare providers may charge more than the Medicare-approved amount for a service or treatment. Medigap plans that provide coverage for excess charges can help reduce or eliminate these additional costs, saving beneficiaries money.

  1. Financial Predictability 

By filling in the gaps left by Original Medicare, Medigap plans provide beneficiaries with more predictable healthcare expenses. With Medigap coverage, beneficiaries can better budget for their healthcare costs, knowing that they are protected from certain out-of-pocket expenses.

  1. Protection from Catastrophic Expenses

For beneficiaries with high medical needs, Medigap plans can provide significant financial protection by covering a large portion of their out-of-pocket expenses. This can help prevent beneficiaries from experiencing financial hardship due to unexpected medical bills.

medigap plans

Frequently Asked Questions

Can I use my Medigap plan with Medicare Advantage?

No, you cannot use a Medigap plan alongside a Medicare Advantage plan. You can only have either a Medigap plan or a Medicare Advantage plan, not both.

Does Medigap cover prescription drugs?

No, Medigap plans do not cover prescription drugs. If you need coverage for prescription medications, you’ll need to enroll in a separate Medicare Part D prescription drug plan.

Are pre-existing conditions covered by Medigap plans?

During the open enrollment period, Medigap plans cannot deny coverage or charge higher premiums based on pre-existing conditions. However, enrolling late may lead to medical checks by insurers, affecting your coverage and costs.

Can I keep my Medigap plan if I move to a different state?

In most cases, yes. Medigap plans are typically portable, so you can keep your coverage if you move to a different state as long as the insurance company offers plans in your new location. However, it’s advisable to check with your insurer to ensure coverage availability in your new area.


For Original Medicare beneficiaries, Medigap plans are a sensible option. It offers choice, flexibility, and financial stability to cover any gaps in coverage. If you are or will soon become a Medicare recipient, AHG brokers can guide you in finding the best supplement plan for your needs. Contact us today.

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