Is Medigap Worth It? A Cost and Coverage Breakdown

Medigap Plan G — the most popular supplement plan since Plan F closed to new enrollees in 2020 — costs $150 to $250 per month depending on your parent's age, state, and insurer. That's $1,800 to $3,000 a year on top of the $202.90 monthly Part B premium. For a parent on a fixed retirement income, that's a real expense.

Whether it's worth it depends on a straightforward calculation: will your parent's Medicare cost-sharing exceed the Medigap premium?

What Plan G Actually Covers

Plan G pays everything Original Medicare leaves behind except the annual Part B deductible ($283 in 2026). That means:

• Part A hospital deductible ($1,736 per benefit period) — covered
• Part A hospital coinsurance ($434/day for days 61–90, $868/day for lifetime reserve days) — covered
• Skilled nursing facility coinsurance ($217/day for days 21–100) — covered
• Part B coinsurance (the 20% you'd normally owe on outpatient services) — covered
• Part B excess charges (if a doctor charges above Medicare's approved amount) — covered
• Foreign travel emergency (80% up to $50,000 lifetime) — covered

Your parent's annual Original Medicare Part A and Part B cost-sharing with Plan G: $283 (before premiums and Part D costs). Every covered Part A and Part B service after that deductible costs zero.

The Real Comparison: Plan G vs Medicare Advantage

Medicare Advantage plans often advertise $0 monthly premiums. But they have copays, coinsurance, and an out-of-pocket maximum that can reach $9,250 in-network (2026 cap). Here's how the two paths play out across different health scenarios:

Healthy parent (2 doctor visits, 1 generic prescription/month):

• Plan G: ~$2,700/year (premiums + $283 deductible)
• Medicare Advantage: ~$400–800/year (copays only)
• Winner: Medicare Advantage, by $1,900–2,300

Parent with moderate needs (6 specialist visits, imaging, 3 prescriptions):

• Plan G: ~$2,700/year
• Medicare Advantage: ~$2,000–3,500/year (copays + drug tier costs)
• Result: roughly a wash, depending on the specific MA plan

Parent with serious illness (hospitalization, surgery, rehab, oncology):

• Plan G: ~$2,700/year
• Medicare Advantage: $5,000–9,250/year (copays accumulate toward the out-of-pocket max)
• Winner: Plan G, by $2,300–6,550

The pattern is consistent: Medigap costs more when your parent is healthy and saves money when they're sick. Since health almost always trends in one direction for aging parents, the question becomes whether to pay more now for certainty or pay less now and accept escalating risk.

The Factors That Tip the Scale Toward Medigap

Your parent sees specialists outside a single network. Original Medicare + Plan G works with any Medicare-accepting provider in the country. No network restrictions, no referrals, no prior authorization. If your parent splits time between states, sees specialists at a distant academic medical center, or simply doesn't want to worry about whether a doctor is "in network," this provider freedom alone can justify the premium.

Your parent is within their Medigap Open Enrollment Period. The six-month window starting the first month your parent is 65 or older and enrolled in Part B is the broadest guaranteed-issue protection in most states. Federal guaranteed-issue rights also apply after specific qualifying events, but those windows are narrower and time-limited. If they're healthy enough to pass underwriting now but might not be later, locking in Medigap during this window is an insurance decision in itself — you're buying the right to keep the policy regardless of future health.

Your family can't manage prior authorization battles. Medicare Advantage plans required prior authorization for most enrollees in 2024, and denial rates for post-acute transitions (hospital to rehab, skilled nursing) ran dramatically higher than the overall average. Under Original Medicare, the doctor orders the care and it happens.

When Medigap Isn't Worth the Premium

Fixed income with minimal health needs. If your parent is healthy, has low medication costs, and is comfortable within a provider network, the $2,000+ annual premium difference is real money. Medicare Advantage's $0 premiums and bundled dental/vision/hearing can be genuinely valuable for healthy retirees.

Your parent qualifies for Extra Help or Medicaid. Low-income Medicare beneficiaries may qualify for Medicare Savings Programs that pay the Part B premium, or Medicaid that acts as a secondary payer. In those cases, Medigap may be redundant.

Strong local MA plan competition. In areas with many competing Medicare Advantage plans, benefits tend to be richer — lower copays, more extras, broader networks. The gap between MA and Medigap narrows.

The Bottom Line

Medigap Plan G is worth it for parents whose health is declining, who see multiple providers, or who want the certainty that covered Original Medicare Part A and Part B cost-sharing will not exceed the $283 Part B deductible in a year, before premiums, Part D, and noncovered care. It's harder to justify for healthy retirees on tight budgets who can stay within a Medicare Advantage network comfortably.

The most expensive mistake isn't choosing the wrong plan — it's missing the Medigap Open Enrollment window and losing the right to buy a supplement policy without medical underwriting. If you're helping a parent decide during that window, the coverage decision toolkit includes a cost-comparison worksheet to run the numbers for your parent's specific health profile.

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