Supplemental Insurance: The 70% of Seniors Who Need This But Do Not Have It
The Medicare summary notice arrived in June. Three pages ofExplanation of Benefits that showed exactly how much Medicare had paid and how much I still owed. $4,200 in bills that Medicare had not covered. I was 67 years old, retired, and facing a medical cost I had not anticipated.
That was when I learned why supplemental insurance exists — and why most seniors do not buy it until it is too late.
What Medicare Actually Covers
Original Medicare (Part A hospital insurance and Part B medical insurance) covers approximately 80% of approved medical costs after deductibles and copays. The remaining 20% is the beneficiary is responsibility, with no hard cap on out-of-pocket spending. For a senior with multiple chronic conditions or a serious illness, that 20% can add up to tens of thousands of dollars per year.
Medicare Part A has a deductible of $1,676 per benefit period (2026). Part B has an annual deductible of $257. After meeting those deductibles, Medicare covers 80% of approved amounts, and you pay the remaining 20% with no limit on total out-of-pocket spending.
Dr. William Foster, a geriatrician in Phoenix who has treated Medicare patients for 28 years, told me the 20% gap is what bankrupts seniors. A Medicare patient with cancer can easily face $50,000-$100,000 in out-of-pocket costs in a single year, even with Medicare coverage. The 20% adds up faster than most people realize.
The Supplemental Insurance Solution
Medigap (supplemental insurance) is specifically designed to fill the gaps in original Medicare coverage. There are 10 standardized Medigap plans (labeled A through N), each covering different combinations of gaps:
Plan F (being phased out for new enrollees) covers all Medicare gaps.
Plan G covers everything except the Part B deductible.
Plan N covers Medicare gaps except for some copays and Part B excess charges.
When you buy a Medigap policy, it pays secondarily — Medicare pays first, then your Medigap policy pays its share of the remaining costs. With comprehensive Medigap coverage, your out-of-pocket costs can be reduced to near zero for Medicare-covered services.
The 70% Statistic Nobody Talks About
According to the American Association of Medicare Supplement Insurance, approximately 70% of seniors who would benefit from Medigap coverage do not have it. Many assume they do not need it because they are healthy. Others cannot afford the premiums (which can run $150-$400 per month depending on the plan and the beneficiary is age). Some simply do not understand that Medicare has gaps at all.
The problem is that Medigap has enrollment windows. The best time to buy a Medigap policy is during the 6-month open enrollment period that starts when you turn 65 and enroll in Medicare Part B. During this period, insurance companies cannot deny you coverage or charge you more based on pre-existing conditions.
After this enrollment period ends, getting Medigap coverage can be much more difficult. If you have pre-existing conditions, insurance companies can decline you or charge dramatically higher premiums. If you miss the enrollment window, you may be stuck with the 20% Medicare gap for life.
What I Learned After My First Year With Cancer
After my cancer diagnosis, my first year of treatment cost a total of $89,000. Medicare paid $71,200. I owed $17,800. If I had a Medigap Plan G policy, my out-of-pocket would have been limited to the Part B deductible ($257 for the year). Instead, I paid $17,800 out of pocket.
After that experience, I purchased a Medigap Plan G policy. My monthly premium is $287. Since then, I have had two more hospitalizations and numerous specialist visits. My total out-of-pocket costs in years two and three combined were less than $600 — the premium paid for itself many times over.
The lesson I learned is simple: the time to buy supplemental insurance is when you are healthy and young enough to have options. Once you develop a serious condition, the enrollment windows close and the cost of coverage can become prohibitive.
