Medigap in 2025: Are Medicare Supplement Plans Still the Best Way to Fill Coverage Gaps?

Key Takeaways

1. Medigap plans can provide critical financial protection by covering gaps left by Original Medicare, but they might not suit everyone in 2025.

2. Knowing the eligibility rules, costs, and new changes to Medicare can help you decide if a Medigap policy is the right choice.

Why Consider Medigap in 2025?

Original Medicare (Parts A and B) is an essential safety net for millions, but it doesn’t cover everything. You might still face significant out-of-pocket costs like deductibles, coinsurance, and copayments. That’s where Medigap, or Medicare Supplement Insurance, comes into play. Medigap plans are designed to fill those financial gaps, but are they still the best choice as we head into 2025?

Let’s dive into how Medigap works, who’s eligible, what it covers, and whether it’s worth considering this year.

What Does Medigap Cover in 2025?

Medigap plans are standardized policies sold by private insurers that help pay for costs not covered by Original Medicare. Depending on the plan you choose, Medigap may cover:

• Part A deductible

• Part B deductible (for plans purchased before 2020)

• Coinsurance for hospital stays and skilled nursing facilities

• Excess charges from doctors who don’t accept Medicare’s payment as full

• Foreign travel emergency care (up to plan limits)

In 2025, these core benefits remain unchanged, but keep in mind that newer Medigap policies (those purchased after January 1, 2020) no longer cover the Part B deductible due to federal regulations. This primarily affects Plans C and F, which are no longer available to new enrollees.

Eligibility: Are You Qualified for Medigap?

Eligibility for Medigap isn’t as straightforward as simply enrolling in Medicare. You’ll need to:

1. Be enrolled in Medicare Parts A and B.

2. Live in a state where Medigap plans are sold. (Note: Massachusetts, Minnesota, and Wisconsin have unique Medigap standards.)

3. Purchase Medigap during your Open Enrollment Period (OEP). This six-month period starts the month you turn 65 and are enrolled in Part B.

If you miss your OEP, insurers may deny coverage or charge higher premiums based on your health history. Some states, however, have guaranteed-issue rules that allow you to buy a Medigap plan without underwriting in certain circumstances.

Costs You Need to Consider

Medigap plans come with a monthly premium that you’ll pay in addition to your Medicare Part B premium. While these premiums vary by plan type, location, and insurer, the trade-off is reduced or eliminated out-of-pocket costs for covered services.

General Cost Overview for 2025:

• Medicare Part A Deductible: $1,676 per benefit period

• Medicare Part B Premium: $185 per month

• Medicare Part B Deductible: $257 annually

Medigap plans don’t cover services like vision, dental, hearing aids, or long-term care, so you’ll need to budget for these separately or look into other Medicare options.

Medigap vs. Other Medicare Options

Medigap isn’t your only option for addressing Medicare’s coverage gaps. Some beneficiaries prefer Medicare Advantage (Part C) plans, which bundle Parts A, B, and often D (prescription drugs) while adding extra benefits. However, unlike Medigap, Medicare Advantage plans require you to use a network of providers and may have variable costs depending on your care needs.

Why Choose Medigap?

• You value predictable out-of-pocket costs.

• You want freedom to see any provider that accepts Medicare.

• You travel frequently within the U.S. or abroad.

Why Consider Other Options?

• You’re okay with a managed care approach.

• You want lower upfront premiums and additional benefits like dental and vision.

• You’re comfortable with provider networks.

How Medigap Plans Change as You Age

A significant factor when considering Medigap is how costs evolve over time. Most insurers use one of three pricing methods:

1. Community-Rated: Premiums are the same regardless of age.

2. Issue-Age Rated: Premiums are based on your age when you buy the policy.

3. Attained-Age Rated: Premiums increase as you age.

For 2025, the type of pricing structure can make a big difference in your long-term costs. If you’re considering Medigap, ask your insurer how they set premiums to avoid surprises later.

What’s New for 2025?

The most significant change affecting Medigap policyholders in 2025 is the new $2,000 cap on out-of-pocket prescription drug costs under Medicare Part D. While this change doesn’t directly impact Medigap, it may reduce the need for supplemental coverage for high drug costs.

Additionally, the introduction of the Medicare Prescription Payment Plan allows beneficiaries to spread out-of-pocket drug costs over the calendar year. This new option could influence whether you’ll need a Medigap policy with comprehensive coverage.

How to Choose the Right Plan

Selecting the best Medigap plan for your needs requires careful consideration of your health, budget, and future plans. Follow these steps to make an informed choice:

1. Compare Plan Benefits

Each Medigap plan is standardized, meaning the benefits are the same regardless of insurer. Review the plan’s coverage details to ensure they align with your needs. For instance:

• Plan G is a popular choice for new enrollees, offering robust coverage minus the Part B deductible.

• Plan N may suit those willing to pay lower premiums in exchange for modest cost-sharing.

2. Evaluate Costs

Look beyond premiums. Consider factors like out-of-pocket limits and how costs may rise over time due to your insurer’s pricing method.

3. Check for Additional Perks

While Medigap plans don’t typically include extras like fitness programs, some insurers may offer value-added benefits. These are not standardized and vary by provider.

Medigap and Medicare Advantage: Can You Have Both?

It’s crucial to understand that you cannot have both a Medigap policy and a Medicare Advantage plan. These two options are designed to meet different needs, so choosing one excludes the other.

If you’re switching from Medicare Advantage to Original Medicare, you may face a gap in coverage while waiting to buy a Medigap plan. Plan accordingly to avoid unexpected medical bills.

Medigap Enrollment Tips for 2025

Timing matters when purchasing a Medigap policy. To secure the best rates and avoid medical underwriting:

• Enroll during your six-month Medigap OEP.

• Consider state-specific rules that offer additional protections for purchasing Medigap outside this window.

• If you’re under 65 and eligible for Medicare due to disability, note that Medigap availability varies by state.

Are Medigap Plans Still Worth It?

Medigap plans remain a reliable way to limit your out-of-pocket costs under Original Medicare, particularly if you value provider flexibility and predictable expenses. However, they aren’t one-size-fits-all. Before making a decision, weigh the benefits of Medigap against other Medicare options like Medicare Advantage and assess how upcoming changes in 2025 could impact your needs.

Remember, your choice should be based on your current health status, anticipated healthcare needs, and financial situation.

Make an Informed Decision

Medigap policies can still be a valuable tool for managing healthcare costs in 2025, but they’re not the right fit for everyone. Evaluate your options carefully, consider upcoming Medicare changes, and think about your long-term needs before committing to a plan.