What Is Medigap? A Plain-English Guide to Medicare Supplement Insurance
By Anthony Orner, Licensed Medicare Insurance Broker — NJ & 34 states
Last reviewed: March 2026 · Source: CMS.gov
In plain English
Medigap is private insurance that fills in the "gaps" that Original Medicare leaves behind — mainly the 20% coinsurance you owe on every Part B medical service. It does not replace Medicare; it works alongside it.
How Medicare's Cost-Sharing Works
Original Medicare pays 80% of covered Part B services (doctor visits, outpatient care, procedures). You pay the remaining 20% — with no annual cap. A $100,000 cancer treatment could leave you with a $20,000 bill. A single hospitalization with complications could trigger the Part A deductible ($1,736 in 2026) plus daily coinsurance for extended stays.
Medigap covers most or all of these remaining costs, depending on which plan letter you choose. Plan G — the most popular — covers everything except the Part B deductible ($283/year).
What Medigap Does and Does Not Cover
✅ What Medigap Covers (Plan G)
- • Part A hospital coinsurance
- • Part A deductible ($1,736)
- • Part A hospice care coinsurance
- • Part B coinsurance (the 20%)
- • Part B excess charges
- • First 3 pints of blood
- • Skilled nursing coinsurance
- • Foreign travel emergency (80%)
❌ What Medigap Does NOT Cover
- • Prescription drugs (need Part D)
- • Dental care
- • Vision care (glasses/contacts)
- • Hearing aids
- • Long-term care
- • Private-duty nursing
- • Part B deductible (Plan G only)
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Medicare is the federal health insurance program for people 65 and older. Original Medicare (Parts A and B) covers most medical services but requires you to pay 20% of all Part B costs with no out-of-pocket cap. Medigap (Medicare Supplement) is a private insurance policy that pays most or all of those remaining costs. Medicare pays first; Medigap pays second.
No. Medigap plans do not cover prescription drugs. You need a separate Medicare Part D prescription drug plan for medication coverage. If you have a Medigap plan, you enroll in a standalone Part D plan from a private insurer.
According to CMS data, approximately 14 million Medicare beneficiaries — about 23% of all Medicare enrollees — have Medigap coverage. It is most common among beneficiaries who have significant healthcare needs and want predictable costs.
For most Medicare beneficiaries, yes. Original Medicare has no out-of-pocket maximum, meaning a serious illness or hospitalization could cost you tens of thousands of dollars. Medigap Plan G costs roughly $130–$220/month in New Jersey but eliminates nearly all of that exposure. If you have any significant healthcare needs, the peace of mind alone is typically worth the premium.
During your Medigap Open Enrollment Period (6 months after you enroll in Part B at 65), no — insurers cannot deny you or charge more based on health conditions. After that window closes, insurers can use medical underwriting and may deny you based on health conditions. That is why enrolling during your 6-month Open Enrollment Period is so important.
Medigap helps pay your share of costs under Original Medicare, such as copayments, coinsurance, and deductibles. In New Jersey, standardized plans like Plan G cover most out-of-pocket costs, though Medigap does not cover prescription drugs, so you'll need a separate Part D plan. Some plans also include foreign travel emergency care.
The best time is during your Medigap Open Enrollment Period, the 6 months that begin when you're 65 and enrolled in Part B. During this window, insurers cannot deny you or charge more based on health conditions. In New Jersey, once this period ends, insurers may use medical underwriting, so enrolling early is important.
You must have Original Medicare Parts A and B to buy a Medigap policy. When you get care, Medicare pays its share of the approved amount first, then your Medigap plan pays its share of the remaining copayments, coinsurance, and deductibles. Each Medigap policy covers only one person, so a married couple in New Jersey would each need their own policy.
Premiums vary by plan, insurer, and your age. In New Jersey, Medigap Plan G typically runs roughly $130–$220 per month in 2026. Keep in mind you'll still pay your Part B premium of $202.90 per month, and Plan G leaves you responsible only for the annual Part B deductible of $283.
Medigap, also called Medicare Supplement insurance, is a private policy that pays your share of costs under Original Medicare (Parts A and B), like copayments, coinsurance, and deductibles. Medicare pays first, then your Medigap plan pays second, which makes your medical bills far more predictable. In New Jersey, standardized plans like Plan G are sold by private insurers licensed in the state.
Medigap premiums vary by plan letter, insurer, age, and location. In New Jersey, popular Plan G typically runs roughly $130–$220 per month. Remember these premiums are in addition to your 2026 Part B premium of $202.90 per month.