Medicare · Cornerstone
Supplemental Medicare plans: what they cover and how to choose
Last reviewed August 1, 20269 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
Part A covers inpatient hospital care and Part B covers outpatient services and physician care. Together they are called Original Medicare. The problem is their cost-sharing structure.
1What the gaps in Original Medicare actually look like
In 2026, the Part A inpatient deductible is $1,736 per benefit period, not per year. Two separate hospitalizations can each trigger the full deductible. From days 61 to 90 of a hospital stay, coinsurance runs $434 per day. If you exhaust the standard 90 days, each lifetime reserve day costs $868, and there are only 60 reserve days over your entire lifetime.
For skilled nursing facility (SNF) care, days 1 to 20 are fully covered after a qualifying hospital stay, but days 21 to 100 carry a $217 per day coinsurance charge in 2026. After day 100, Medicare pays nothing.
On the Part B side, in 2026 the standard monthly premium is $202.90 and the annual deductible is $283. After that deductible, Medicare covers 80% of the approved amount and you owe 20%, with no annual ceiling on that 20% exposure. If your provider does not accept Medicare assignment, they may charge up to 15% above the Medicare-approved amount; some states ban those excess charges entirely.
Prescription drugs are not covered by Original Medicare at all without a Part D (prescription drug) plan attached.
In short: the gaps in Original Medicare are real and potentially large; supplemental coverage is how most beneficiaries manage them.
2Medigap: the closest thing to filling the gaps directly
Medigap, also called Medicare Supplement Insurance, is private insurance that works alongside Original Medicare. When Medicare processes a claim first, Medigap pays some or all of what remains, depending on which standardized plan letter you hold.
Plans are labeled by letter (A, B, C, D, F, G, K, L, M, N, and the high-deductible variants). The coverage each letter provides is set federally, so a Plan G from one insurer covers the same benefits as a Plan G from any other insurer. What varies is the premium. Plans F and C are no longer available to beneficiaries who became eligible after January 1, 2020.
Plan G is currently the most comprehensive option available to new enrollees. It covers the Part A deductible, Part A coinsurance, Part B coinsurance, excess charges, and foreign travel emergency care (to policy limits). The only thing it does not cover is the Part B deductible. The high-deductible version of Plan G carries a lower monthly premium in exchange for paying the first $2,950 in 2026 before coverage kicks in.
Plan N also covers Part A coinsurance and the Part B coinsurance for most services, but it does not cover excess charges and uses copays for some office visits and emergency room visits.
The guaranteed-issue window
The single most important timing fact in Medigap is the open enrollment window: six months, starting the month you turn 65 and are enrolled in Part B. During this window, no insurer may use medical underwriting, deny coverage, or charge a higher premium because of health status. Outside that window, most states allow insurers to do all three.
Some states have expanded protections. The way to think about them is by category: a few states such as New York and Connecticut offer year-round guaranteed issue; Washington allows plan-to-plan switching at any time; a growing group of birthday-rule states, including California and Oregon, give you an annual window around your birthday to switch plans without underwriting, and New Mexico's birthday-rule law takes effect in January 2027. These protections differ in kind, so a flat list would obscure more than it reveals.
Medigap does not include drug coverage. Most Medigap enrollees also need a standalone Part D plan.
In short: Medigap is the most direct way to limit cost-sharing exposure, but the guaranteed-issue window is a one-time opportunity that closes quickly for most people.
3Medicare Advantage: an alternative path to supplemental coverage
Medicare Advantage (Part C) is a different approach. Instead of supplementing Original Medicare, a Medicare Advantage plan replaces it. You still use Medicare; a private insurer approved by CMS (the Centers for Medicare and Medicaid Services) delivers your benefits, often with additional services Original Medicare does not cover.
Most Medicare Advantage plans include prescription drug coverage, making them an all-in-one alternative. Many also offer extra benefits such as dental, vision, and hearing services, though the scope and limits of those benefits are set at the plan level and vary by plan and market.
The structural trade-off is network and prior-authorization requirements. Medicare Advantage plans use defined provider networks, and certain services require prior authorization, which is advance approval before receiving care. Under CMS rule CMS-0057-F, effective 2026, a standard prior-authorization decision must come within 7 calendar days, and an expedited decision when a delay would seriously jeopardize health must come within 72 hours, with any denial required to include a specific reason.
Cost caps and what they mean
One of the clearest advantages of Medicare Advantage over Original Medicare is the mandatory out-of-pocket maximum (MOOP). In 2026, the federal cap on in-network spending is $9,250; the combined in-network and out-of-network cap is $13,900. Plans may set lower limits, and according to KFF, the 2026 enrollment-weighted average in-network MOOP is $5,421. Original Medicare has no equivalent cap.
The trade-off is that reaching the MOOP can still be significant, and network restrictions may affect access to specialists or facilities you prefer. Medicare Advantage is generally a stronger fit for people who are comfortable with a network structure and want predictable benefit packaging in one plan.
In short: Medicare Advantage replaces rather than supplements Original Medicare and adds a cost ceiling, but it introduces network constraints and prior-authorization steps that Original Medicare does not have.
4Part D: prescription drug coverage as a supplemental layer
Part D plans cover prescription drugs and are sold as standalone plans for people in Original Medicare or are bundled into most Medicare Advantage plans. They are worth understanding as their own supplemental layer.
In 2026, no Part D plan may set an annual deductible above $615. The bigger change in 2026 is the out-of-pocket cap: under the Inflation Reduction Act, once a beneficiary spends $2,100 on covered Part D drugs in a year, their cost for covered drugs drops to $0 for the rest of the year. The coverage gap (commonly called the donut hole) no longer applies.
If you delay enrolling in Part D after your Initial Enrollment Period (IEP) ends and go 63 or more consecutive days without creditable drug coverage, a late-enrollment penalty applies. The penalty adds 1% of the national base beneficiary premium ($38.99 in 2026) for each full month of the gap, and it is permanent. It attaches to every Part D premium you pay for the rest of your life.
COBRA and retiree coverage do not count as creditable coverage for the purposes of avoiding the Part D penalty in the same way active employer coverage does. If you are leaving a job, verify whether your employer coverage is creditable before assuming your Part D enrollment can wait.
In short: Part D is a necessary supplemental layer for most beneficiaries, and a 63-day gap without creditable coverage triggers a permanent penalty.
5How income affects supplemental costs through IRMAA
Higher earners pay more for both Part B and Part D through a surcharge called IRMAA (the Income-Related Monthly Adjustment Amount). IRMAA uses a two-year lookback, meaning your 2026 premiums are based on your 2024 modified adjusted gross income (MAGI). The structure is a cliff: one dollar over a threshold moves you to the full premium of the next tier.
In 2026, IRMAA begins above $109,000 for single filers and $218,000 for joint filers. The full bracket table renders on the site from the CMS database. At the top tier, which begins at $500,000 single and $750,000 joint, the premium surcharges are substantial. Part D carries a parallel IRMAA surcharge added to whatever plan premium you pay.
If a life-changing event such as retirement, divorce, or the death of a spouse caused your income to drop after the lookback year, you can request a new initial determination using SSA form SSA-44. You can also request reconsideration of an IRMAA determination within 60 days of receiving the notice; SSA treats the notice as received five days after it is dated.
In short: IRMAA is a real cost factor for higher earners and can be contested when income has dropped due to a qualifying life event.
6Choosing between Medigap and Medicare Advantage
The choice is not about which option is generically better; it comes down to how you use healthcare and what trade-offs you are willing to make.
| Factor | Medigap + Original Medicare | Medicare Advantage |
|---|---|---|
| Provider access | Any Medicare-accepting provider nationwide | Network-based, varies by plan |
| Cost-sharing structure | Predictable; plan covers most cost-sharing after monthly premium | Copays and coinsurance up to the MOOP |
| Out-of-pocket ceiling | No cap in Original Medicare alone; Medigap covers ongoing cost-sharing | Federal MOOP cap ($9,250 in-network in 2026) |
| Drug coverage | Requires separate Part D plan | Usually bundled |
| Extra benefits | Generally none | Dental, vision, hearing vary by plan |
| Underwriting risk | Guaranteed only during the 6-month open enrollment window | No medical underwriting to enroll |
| Monthly premium | Higher, but more predictable total costs | Often lower or $0, but cost-sharing applies |
People who travel frequently, want the ability to see any specialist without referrals, or have complex ongoing conditions often find the predictability of Medigap worth the higher premium. People who prefer a lower upfront cost and are comfortable with a network may find Medicare Advantage a better fit. Neither path forecloses the other permanently; AEP (the Annual Enrollment Period, running October 15 to December 7 each year) allows plan changes, though switching back to Medigap after Medicare Advantage carries underwriting risk in most states.
To find out more about coverage options specific to your situation, please contact us to discuss plan options.
In short: the Medigap versus Medicare Advantage decision hinges on your tolerance for network restrictions, your need for provider flexibility, and how you weigh predictable premiums against lower upfront costs.
7When to act and what happens if you wait
The IEP (Initial Enrollment Period) for Medicare is seven months: the three months before your 65th birthday month, your birthday month, and the three months after. Delays in Part B enrollment without qualifying employer coverage trigger a permanent 10% penalty for each full 12-month period of delay. The eight-month Part B SEP (Special Enrollment Period) begins when employment or employer coverage ends, whichever comes first.
For Medigap, the six-month guaranteed-issue window tied to Part B enrollment is distinct from these Medicare enrollment windows. Acting during that window is the most important timing decision most new Medicare beneficiaries face, because protections outside it depend heavily on which state you live in.
The MA OEP (Medicare Advantage Open Enrollment Period) runs January 1 to March 31 each year for people already enrolled in a Medicare Advantage plan who want to switch plans or return to Original Medicare.
In short: timing your enrollment correctly protects your access, your pricing, and your options going forward; the windows do not automatically reopen.
Common questions about Medicare
Quick answers to common questions
Tap any question to expand. Each question links to a fuller standalone answer.
Does Medicare cover durable medical equipment?
Yes.
Medicare Part B covers durable medical equipment (DME): reusable medical gear your doctor prescribes for use at home, such as wheelchairs, walkers, hospital beds, oxygen equipment, CPAP machines, and blood sugar monitors. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026, and Medicare pays the other 80%. To be covered, the item must be ordered by a Medicare-enrolled doctor and supplied by a Medicare-enrolled supplier, and some items are rented rather than bought. Equipment meant mainly for use outside the home, or only for comfort or convenience, is not covered.
Does Medicare cover mental health services?
Yes.
Medicare covers mental health care across its parts in 2026. Part B covers outpatient services like therapy, counseling, and visits with psychiatrists, psychologists, and clinical social workers, and since 2024 it also covers marriage and family therapists and mental health counselors. You pay 20% of the Medicare-approved amount after the $283 deductible, and one depression screening each year is free. Part A covers inpatient mental health care, with a lifetime limit of 190 days in a freestanding psychiatric hospital. Part D covers most mental health medications. Many of these services are also available by telehealth, and Medicare Advantage plans cover at least the same benefits.
Does Medicare cover vision care?
Mostly no for routine care.
In 2026, Original Medicare does not cover routine eye exams for glasses or contact lenses, and it does not pay for the glasses or contacts themselves. It does cover some medical eye care: yearly glaucoma screenings for people at high risk, diabetic retinopathy exams, treatment for eye diseases, and cataract surgery (including one pair of standard glasses or contacts afterward). For those covered services you pay 20% after the $283 Part B deductible. Many Medicare Advantage plans add a routine vision benefit covering eye exams and an allowance for glasses.
Does Medicare cover physical therapy?
Yes.
Medicare Part B covers outpatient physical therapy that is medically necessary to treat your condition. You pay 20% of the Medicare-approved amount after the yearly Part B deductible ($283 in 2026). There is no longer a hard dollar cap on therapy, but once your physical and speech therapy together pass $2,480 in 2026, your therapist must add a note (called a KX modifier) confirming you still need care. Claims above $3,000 may be reviewed for medical necessity. Part A covers physical therapy you receive as a hospital inpatient or in a skilled nursing facility. A doctor or therapist must set up and regularly review your plan of care.
Does Medicare cover chiropractic care?
Partly.
Medicare Part B covers one specific chiropractic service: manual manipulation of the spine to correct a subluxation (when one or more bones of the spine are out of position) that a doctor confirms is medically necessary. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Medicare does not cover other services a chiropractor might offer, such as X-rays, massage therapy, acupuncture, or routine wellness visits, so you would pay the full cost for those. Some Medicare Advantage plans include extra chiropractic or wellness benefits beyond this.
Does Medicare cover ambulance services?
Yes, in limited situations.
Medicare Part B covers emergency ambulance transportation when traveling any other way could endanger your health, taking you to the nearest appropriate hospital or facility. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Air ambulance is covered only when ground transport cannot reach you or would take too long. Non-emergency ambulance trips, for example to dialysis, are covered only when a doctor provides a written order stating they are medically necessary. Medicare does not cover ambulance rides taken purely for convenience.
Does Medicare cover skilled nursing facility care?
Yes, on a short-term basis.
Medicare Part A covers skilled nursing facility (SNF) care after a qualifying inpatient hospital stay of at least 3 days, when you need daily skilled care like nursing or therapy. In 2026 you pay $0 for days 1 through 20 of each benefit period, $217 per day for days 21 through 100, and all costs after day 100. Coverage is for skilled care while you recover, not for long-term or custodial care (help with daily activities like bathing or dressing), which Medicare does not cover. Long-term nursing home care is generally paid through Medicaid or private funds.
Does Medicare cover hearing aids?
No, not under Original Medicare.
In 2026, Original Medicare (Parts A and B) does not pay for hearing aids or the exams to fit them. Part B does cover diagnostic hearing and balance exams when your doctor orders them to help diagnose or treat a medical condition, and for those you pay 20% after the $283 deductible. Many Medicare Advantage plans, however, include a hearing benefit that helps pay for routine hearing exams and hearing aids, often through a specific network or allowance. If hearing coverage matters to you, it is worth comparing Advantage plans or a standalone hearing plan.
Does Medicare cover home health care?
Yes, when you qualify.
Medicare Parts A and B cover home health care if a doctor certifies that you are homebound (leaving home takes a major effort) and need part-time skilled care, such as skilled nursing, physical therapy, occupational therapy, or speech therapy. A Medicare-certified home health agency must provide the care under a plan your doctor reviews. You pay $0 for covered home health visits in 2026, and 20% for any durable medical equipment. Medicare does not cover 24-hour home care, meal delivery, or homemaker services like cleaning when that is the only care you need.
Does Medicare cover diabetes supplies and testing?
Yes.
In 2026 Medicare covers most diabetes care across two parts. Part B (outpatient care and equipment) covers blood sugar monitors, test strips, lancets, and continuous glucose monitors (CGMs) as durable medical equipment, plus diabetes screenings and a self-management training program. You pay 20% of the Medicare-approved amount after the $283 Part B deductible. Part D (drug coverage) covers insulin and related supplies like syringes, and in 2026 your insulin is capped at $35 for a month's supply. If you have a Medicare Advantage plan, it covers at least the same diabetes benefits, sometimes with added extras.
Which is better, Medigap or Medicare Advantage?
Neither is better for everyone; they suit different needs.
Medigap (also called Medicare Supplement, a private policy that pairs with Original Medicare) lets you see any doctor nationwide who accepts Medicare with no network and very predictable out-of-pocket costs, but you pay a monthly Medigap premium and add a separate Part D drug plan. Medicare Advantage (Part C, your Medicare benefits through a private plan) often has a lower or $0 plan premium, bundles drug coverage and extras like dental and vision, and caps your yearly out-of-pocket costs, but uses provider networks and may require prior approval. People who travel, want maximum doctor freedom, and prefer steady costs often lean Medigap; people who want low premiums, extras, and a network they are comfortable with often lean Medicare Advantage. With both, you still pay the Part B premium ($202.90 per month in 2026). To find out which fits your situation, reach out to a licensed Goodsurance advisor at 1-888-301-8091 (TTY 711), Mon to Fri 8 am to 5 pm PT.
Can I see out-of-network doctors on a Medicare Advantage PPO?
Yes.
A Medicare Advantage PPO (Preferred Provider Organization plan, where your Medicare benefits come through a private plan) lets you see doctors and hospitals outside the plan's network, but you usually pay more for out-of-network care than for in-network care. Staying in network keeps your costs lower, while going out of network is allowed and can be worth it if you want a specific provider. This flexibility is a key difference from a Medicare Advantage HMO (Health Maintenance Organization plan), which generally only covers in-network care except in emergencies. With a PPO, you also typically do not need a referral to see a specialist. Keep in mind the provider must accept the plan and Medicare. Emergency and urgent care are covered regardless of network on both plan types. The trade-off with a PPO is more freedom in exchange for generally higher costs than an HMO.