Mind the Medigap: 5 Factors to Help Steady Your Retirement Health Strategy

As you approach retirement, navigating the complexities of Medicare can feel as foreign as learning a new language.

You've worked hard and saved diligently, and before you can enjoy your next chapter, you need to ensure you have healthcare coverage. While Medicare Parts A and B provide essential benefits, they do not cover everything. That's where Medicare Supplement Insurance, often called Medigap, comes in.

Medigap policies are designed to help fill the "gaps" in your health insurance coverage, including deductibles, copayments, and coinsurance that Medicare doesn't cover. But choosing the right Medigap policy isn't a one-size-fits-all decision. Before you enroll, here are some key factors to consider:

Timing is Everything

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This six-month window begins the first month you have Medicare Part B and are age 65 or older. During this time, insurance companies cannot deny you coverage or charge you more due to pre-existing health conditions. If you miss this window, you might face higher premiums or even be denied coverage later.

Understanding the "Alphabet Soup"

Medigap policies are standardized, meaning a Plan G from one insurer offers the same benefits as a Plan G from another. In most states, these plans are identified by letters (A, B, D, G, K, L, M, N). Plans C and F are no longer available to new Medicare beneficiaries as of January 2020, but if you were eligible for Medicare before that date, you may still enroll in or keep these plans. Each lettered plan offers a different combination of benefits, so it's essential to compare them based on what you need to cover. For example, Plan G is very popular because it covers nearly all out-of-pocket costs except the Part B deductible.

Cost vs. Coverage

While the benefits for each lettered plan are standardized, the premiums can vary between insurance companies. This is why shopping around is important. Consider your anticipated healthcare needs and budget. Do you prefer a higher monthly premium for more comprehensive coverage and fewer out-of-pocket surprises (like a Plan G)? Or are you comfortable with a lower premium but willing to pay some copayments or deductibles (like a Plan N)? While premiums can vary significantly by factors including state, age, and insurer pricing models, the average monthly costs for popular plans for a 65-year-old in 2025 range from roughly $112 (Plan N) to $144 (Plan G) based on recent estimates.

Future Health Needs

It is important to consider your family health history and any current conditions. If you anticipate frequent doctor visits, hospital stays, or specialized care, a more comprehensive Medigap plan might offer greater financial security. Medigap policies are guaranteed renewable, meaning if you pay your premiums, your policy cannot be canceled, regardless of your health status.

Foreign Travel

Medicare generally doesn't cover healthcare when you travel globally. Some Medigap plans (including Plan G and Plan N) do offer coverage for foreign travel emergencies, which can be a significant benefit if you plan to travel internationally in retirement. Also, remember that Medigap does NOT cover prescription drugs (that's Medicare Part D), long-term care, vision, dental, or hearing aids. You'll need separate coverage for these.

Choosing a Medigap policy is an important decision in your retirement healthcare planning. By understanding these factors and working together, we can select the right coverage for you and your future.

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