For many Americans, turning 65 and joining Medicare feels like a major milestone: finally, health coverage after years of paying into the system. Soon after enrolling, many realize something surprising: Original Medicare doesn’t cover everything. Hospital stays, doctor visits, and preventive care are included, but deductibles, coinsurance, and uncovered services can still leave a big financial gap.
That’s where supplemental insurance, or Medigap, comes in. These private plans are designed to cover what Medicare doesn’t, but they also add another monthly premium. The question is whether this extra cost is worth it. Here’s what experts and financial planners say about when Medigap makes sense.
Why should retirees consider supplemental coverage
Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance), covers roughly 80% of approved medical expenses, according to CBS News. The remaining 20%—plus deductibles and copays—can add up quickly, especially for those managing chronic conditions or facing unexpected hospital stays. Unlike most private insurance, Medicare doesn’t have an annual cap on out-of-pocket costs.
That means a single health event could cost thousands of dollars out of pocket. The Part A deductible alone is $1,676 per benefit period in 2025, and daily coinsurance charges apply for longer hospital stays. Part B has its own deductible, $257 in 2025, after which Medicare only pays 80% of approved charges. For surgeries, outpatient treatments, or long-term therapies, that 20% share can become a real burden.
Medigap policies help protect retirees from those unpredictable costs by covering most or all of the remaining expenses, depending on the plan. They also provide more predictable health care spending each year, which can make budgeting in retirement easier. While the premiums add an extra cost, many retirees find the peace of mind worth it as health needs grow with age.
Another reason Medigap remains popular is flexibility. Unlike Medicare Advantage plans, which use provider networks, it works nationwide with any provider who accepts Medicare. That’s a big plus for retirees who split time between states or want freedom to see specialists without referrals or coverage denials.
What to consider before adding supplemental coverage
Still, Medigap isn’t necessary for everyone. Retirees with strong savings, minimal health care needs, or additional coverage through an employer plan or Medicaid may not need it. For those with limited medical expenses, paying out of pocket might still be more affordable than adding another monthly premium.
However, health care costs tend to rise with age, and Medicare doesn’t cover everything. Long-term care, routine dental work, hearing aids, and most vision care aren’t included. Prescription coverage also requires a separate Part D plan. That’s why many retirees combine Medigap with a Part D plan for broader protection.
It’s also important to consider timing. The best time to buy a Medigap plan is during your six-month open enrollment period, which begins when you’re both 65 and enrolled in Medicare Part B. During that window, you can buy any plan without medical underwriting. Waiting longer can mean higher premiums or even denial based on health history.
For retirees who prefer simplicity, predictable costs, and nationwide access to care, supplemental coverage can be a smart investment. It’s not mandatory, but it can provide financial security when health care becomes less predictable.