Medicare Supplement Guide: Protecting Your Nest Egg

Reviewed by Scott Bowling, licensed independent Medicare broker. Texas License #2882146. Last reviewed September 2026. Medicare is a powerful healthcare system, but it was never designed to be “free.” If you rely solely on Original Medicare (Part A and Part B), you are exposing yourself to uncapped financial risk. Unlike most private insurance you had through an employer, Original Medicare has no maximum out-of-pocket limit. If you have a $100,000 heart surgery, Medicare generally pays 80%, and you are responsible for the remaining 20%. That is a $20,000 bill, payable immediately. This is where Medicare Supplement Insurance (Medigap) becomes your financial firewall. Medical inflation has driven up deductibles and copays, making the gaps in Medicare wider than before. Choosing the right Medigap plan is no longer just about health. It is about asset protection. At Trusted SR Solutions, we believe an educated client is a protected client. This guide covers what you need to know to choose the right Medigap plan, avoid overpaying, and help secure your financial future.

What Is Medicare Supplement (Medigap) Insurance?

Medicare Supplement insurance is a private policy designed to help pay the bills that Medicare leaves behind. It works in tandem with your red, white, and blue card: Primary payer: Original Medicare pays its share of approved health costs, usually 80% for Part B services after you meet the deductible. Secondary payer: Your Medigap plan pays its share of remaining costs, meaning the 20% coinsurance and some or all deductibles and copays, depending on the plan. The result: With a strong Medigap plan, you can have major surgery, weeks of cancer treatment, or frequent specialist visits and pay $0 or a small deductible for Medicare-approved services.

The 3 Freedom Rules of Medigap

Unlike Medicare Advantage plans, which restrict you to local networks, Medigap offers broad healthcare freedom: Nationwide access: You can see any doctor or hospital in the United States that accepts Medicare. If a provider takes Medicare, they must also take your standardized Medigap plan. No referrals: You typically do not need a referral from a primary care doctor to see a specialist. Guaranteed renewable: As long as you pay your premiums, the insurance company generally cannot cancel your policy or change your benefits because of your health status or claims history.

The Big Three Costs Medigap Helps Cover

To understand the value of these plans, you have to understand the major costs they can eliminate or reduce.

1. The Part A Hospital Deductible ($1,736)

The Part A inpatient hospital deductible for a benefit period is $1,736. Crucial detail: This is not an annual deductible. It is a per-benefit-period deductible. If you are hospitalized in January, you pay $1,736. If you go back in August and it is a new benefit period, generally 60 or more days after discharge, you pay $1,736 again. Medigap coverage: Most popular Medigap plans, including Plan G and Plan N, pay 100% of this Part A deductible.

2. The Part B Coinsurance (The Unlimited 20%)

This is the most dangerous gap. Medicare Part B pays 80% of approved outpatient bills, including surgeries, chemotherapy, dialysis, doctor visits, and durable medical equipment, after you meet the deductible. Crucial detail: There is no built-in cap on your 20%. 20% of a $5,000 bill is manageable. 20% of a $200,000 chemotherapy regimen can be financially devastating. Medigap coverage: Medigap plans that include Part B coinsurance benefits, such as Plans G and N, generally pay 100% of this 20% coinsurance for covered services.

3. The Part B Deductible ($283)

The annual Part B deductible is $283. You must pay the first $283 of Part B-covered services each year before Medicare starts paying its share. Medigap coverage: Only grandfathered plans, meaning Plan F and Plan C, cover this deductible. Most newer enrollees pay this amount out of pocket once per year.

Plan G vs. Plan N

There are many Medigap lettered plans, including A, B, D, K, L, and M, but in most states today the market is dominated by two clear winners for people new to Medicare: Plan G and Plan N. Understanding the difference between these two is the key to finding the right balance between monthly premiums and coverage.

Option 1: Plan G, the Peace of Mind Standard

Who it’s for: People who want very comprehensive coverage and dislike surprise medical bills. Plan G is widely seen as the gold standard Medigap plan for those newly eligible for Medicare. What it covers: The Part A deductible and most Part A coinsurance and hospital costs. Part B coinsurance (the 20%) for covered services. Skilled nursing facility coinsurance, blood, and foreign travel emergency up to plan limits. Part B excess charges, in states where they are allowed. What you pay: Your monthly Plan G premium. The annual Part B deductible of $283. After that, you typically pay $0 for the rest of the year for Medicare-approved services, as long as they are covered by Medicare and Medigap. Why it’s popular: It largely eliminates the stress of copays and surprise bills. Whether you see the doctor once or 50 times, your exposure is usually limited to the annual Part B deductible plus your premium.

Option 2: Plan N, the Value Contender

Who it’s for: Healthy, budget-conscious beneficiaries who do not mind small copays in exchange for lower monthly premiums. Plan N premiums are often lower than Plan G premiums in the same area, with typical savings in the mid-teens to around 20%, though exact differences vary by carrier and ZIP code. The copays, after the $283 deductible: Up to $20 for some office visits. Up to $50 for emergency room visits, waived if you are admitted. The excess charge risk: Plan N does not cover Part B excess charges. In states that allow excess charges, certain providers who do not accept Medicare assignment can bill you up to 15% above the Medicare-approved amount. Trade-off: You accept some pay-as-you-go cost sharing and the potential for excess charges in exchange for a lower monthly premium.

What Are Part B Excess Charges? (Crucial for Plan N Buyers)

Doctors and other providers who accept Medicare can participate in two ways: Accept assignment: They agree to accept the Medicare-approved amount as payment in full. They cannot bill you above that amount. Do not accept assignment: They can legally charge you up to 15% more than the Medicare-approved amount in most states. This extra 15% is called a Part B excess charge. How Medigap plans treat excess charges: Plan G: Covers 100% of Part B excess charges in states where these charges are permitted. Plan N: Does not cover excess charges. If your doctor does not accept assignment and adds this charge, you pay it out of pocket. Expert tip: Excess charges are not very common nationally and are banned in some states, but they can show up with certain specialists or branded clinics. If you choose Plan N, make a habit of asking, “Do you accept Medicare assignment?”

Why Can’t I Get Plan F? (The MACRA Law)

If you talk to neighbors who have been on Medicare for years, they may rave about Plan F, which covered virtually all Medicare-approved out-of-pocket costs, including the Part B deductible. Under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, Plans F and C are closed to anyone who became eligible for Medicare on or after January 1, 2020. If you turned 65 or otherwise became Medicare-eligible before January 1, 2020, you may still be able to buy Plan F or Plan C, or keep one you already have, even if you did not enroll until later. Availability depends on the carrier and your state. If you became eligible on or after January 1, 2020, Plan F and Plan C are not available to you. Good news: Plan G provides nearly the same coverage as Plan F. The main difference is that you pay the Part B deductible yourself each year, and premiums for Plan G are often lower than for comparable Plan F policies.

How Medigap Pricing Works: Avoid Teaser Rates

Not all Medigap prices are created equal. Insurance companies use three main methods to price their policies, and the method can affect how much you pay over time.

1. Community-Rated (Best Long-Term Stability)

Everyone enrolled with the carrier in that area pays the same base premium, regardless of age. Your premium does not increase just because you get older, though it can increase due to inflation, claims experience, or other factors.

2. Issue-Age-Rated (Good for Younger Seniors)

Your premium is based on your age when you first buy the policy. If you buy at 65, you pay the 65-year-old rate going forward, with future increases generally tied to inflation or other non-age factors, not to your aging.

3. Attained-Age-Rated (Most Common, Most Volatile)

Your premium is based on your current age. It typically goes up every year as you get older, in addition to any general rate increases. Warning: A plan that looks cheap at 65 can become expensive at 80 if it is heavily age-rated. A key part of our role is reviewing long-term rate history, not just today’s price.

Three Insider Ways to Save Money on Medigap

1. The Household Discount (HHD)

Many carriers offer a Household Discount, often in the 5% to 12% range, if: You and your spouse or household member both enroll with the same company, or You live with another adult and meet the carrier’s specific rules, even if they are not on a Medigap policy. Example: On a $150 monthly premium, a 12% discount saves $18 a month, or $216 a year per person. Over 10 years, that is more than $4,000 in potential savings for a couple.

2. Comparing Book Rates vs. Introductory Offers

Some carriers lead with very low teaser or introductory rates and then apply large increases after the first year. We focus on carriers with stable, moderate annual increases, versus carriers with a history of sharp 8% to 10% or higher jumps.

3. Using State-Specific Birthday and Anniversary Rules

Several states offer special rules that let you change Medigap policies with relaxed or no medical underwriting during certain windows. These options can help you shop for lower rates periodically while keeping your health screening risk low or zero. Texas does not currently have a birthday rule, so timing matters more here.

The Medical Underwriting Trap: Why You Must Act Early

The most critical timing rule with Medigap is your Medigap Open Enrollment Period. This is a 6-month window that starts the first month you are both 65 or older and enrolled in Medicare Part B. During this window, you can buy any Medigap plan sold in your state from any company, regardless of your health. After it closes, you generally have to go through medical underwriting. Common mistake: Many people start on a Medicare Advantage plan thinking they can switch later. Reality: If your health worsens, it may be harder or impossible to pass underwriting for a new Medigap plan.

One Exception Worth Knowing About

If your Medicare Advantage plan is discontinued by the carrier, federal law grants you a guaranteed-issue Medigap right. Insurers cannot reject you or charge you more for pre-existing conditions. With more than a million Medicare Advantage members nationwide losing their plan for 2027, this matters to a lot of people this fall. The window is narrow and time-limited, and most people who get a non-renewal letter simply accept the replacement plan the carrier offers without knowing they had this option. If you receive one of those letters, call before you sign anything.

Medigap vs. Medicare Advantage: Key Differences

Medicare Supplement offers broad provider access and predictable costs. Medicare Advantage relies on networks, copays, and annual plan changes.

How Trusted SR Solutions Helps You Enroll

Step 1, the rate scan

We compare Plan G, Plan N, and other plans in your ZIP code.

Step 2, the discount check

We apply Household Discounts and savings opportunities.

Step 3, the stability audit

We review financial ratings and long-term rate history.

Step 4, seamless enrollment

We handle paperwork and remain your ongoing support.

Frequently Asked Questions

Does Medigap cover prescriptions?

No. You need a separate Part D plan.

Does Medigap cover dental and vision?

Generally no, though medically necessary services may be covered under Part B.

Does Medigap cover me while traveling?

Yes, nationwide with any provider who accepts Medicare. Many plans also include foreign travel emergency benefits up to plan limits.

When can I buy a Medigap plan without answering health questions?

During your 6-month Medigap Open Enrollment Period, which starts the first month you are both 65 and enrolled in Part B. Also during certain guaranteed-issue situations, including when a Medicare Advantage plan is discontinued.

Can I switch Medigap plans later?

You can apply any time, but outside protected windows most states allow the carrier to review your health history and decline you. Some states have birthday or anniversary rules that relax this. We check what applies where you live.

Get a Personalized Medigap Quote Today

Your health is one of your most valuable assets. Contact Trusted SR Solutions today for a free, no-obligation comparison of Plan G, Plan N, and other Medigap options. Call 512-844-3983 or email [email protected] We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. We are not connected with or endorsed by the United States government or the federal Medicare program.