Medicare Supplement, also known as Medigap, is a private health insurance policy designed to cover the out-of-pocket costs that Original Medicare (Parts A and B) does not, such as deductibles, copayments, and coinsurance. These policies help reduce the financial burden of healthcare services by covering costs that could otherwise add up quickly, especially for those with frequent medical needs. Medigap plans are standardized by the federal government and are labeled with letters (A through N), each offering a different level of coverage, from basic benefits to more comprehensive options. However, Medigap does not cover prescription drugs, so beneficiaries often pair it with a standalone Part D plan for medication coverage.

Unlike Medicare Advantage plans, which are offered by private insurers as an alternative to Original Medicare, Medigap plans work alongside Original Medicare, allowing beneficiaries to use any doctor or hospital that accepts Medicare. Medigap plans typically have higher monthly premiums compared to Medicare Advantage, but they offer more predictable costs with fewer out-of-pocket expenses. The premiums for Medigap plans vary based on factors such as the insurer, location, and plan choice, but once enrolled, beneficiaries are generally protected from excessive out-of-pocket healthcare costs due to the plan’s cost-sharing coverage.