Overview
Medigap — formally Medicare Supplement Insurance — is private insurance that supplements Original Medicare (Parts A and B) by paying some of the out-of-pocket costs Medicare does not cover. Medigap does not replace Medicare; it fills the gaps in Medicare's cost-sharing. Medigap is sold only to beneficiaries enrolled in Original Medicare; it is not available to Medicare Advantage enrollees (because MA has its own cost-sharing structure).
Medigap plans are standardized by CMS. In most states, insurers can sell Plans A, B, C (to pre-2020 beneficiaries), D, F (to pre-2020 beneficiaries), G, K, L, M, and N — each with a CMS-defined benefit structure. Standardization means Plan G from Insurer X covers identical benefits as Plan G from Insurer Y; the only difference is premium, customer service, and network of supporting services. Medigap in Wisconsin, Minnesota, and Massachusetts follow state-specific standardization rather than federal.
Plan G and Plan N are the most popular Medigap plans for newly-enrolled beneficiaries post-2020. Plan G covers all Medicare Part A and Part B cost-sharing except the Part B deductible; it is considered the most comprehensive currently-sellable plan. Plan N covers most cost-sharing but has copays for office visits and emergency room visits and does not cover excess charges. Plan F was the most comprehensive but is no longer sold to beneficiaries newly eligible after January 1, 2020 (pre-2020 beneficiaries can still buy or keep Plan F).
For RCM, Medigap significantly simplifies Medicare beneficiary billing. Beneficiaries with Medigap rarely owe anything post-Medicare adjudication because Medigap pays the Medicare cost-sharing. Providers bill Medicare as primary; Medicare pays and automatically crosses over to Medigap as secondary; Medigap pays remaining balance. The provider's only remaining collection is from the patient (if any), which with Plan F or Plan G is typically zero.
Medigap crossover requires provider enrollment with the Medigap insurer's crossover arrangement. CMS facilitates Medigap crossover through the Common Working File; claims processed by Medicare that have a matching Medigap policy on file automatically forward to the Medigap carrier. Provider practice management systems receive the Medigap 835 remittance as a secondary payer remittance and post accordingly. Enrollment issues — missing Medigap policy on the Medicare record — require patient-driven correction.
For billing, Medigap 835s process like any other secondary payer. CARC 2 (Coinsurance Amount) and deductible CARCs on the Medicare 835 become paid items on the Medigap 835. Coordination of Benefits rules determine payment order; Medicare is always primary for Medicare-eligible services; Medigap is secondary. The combination covers approximately 100% of allowed amount for Plan F or G patients, 97% for Plan N patients.
Medigap market has specific enrollment dynamics. Beneficiaries have a guaranteed-issue right during the first six months after turning 65 and enrolling in Part B; outside this window, insurers can underwrite and potentially deny or rate coverage based on health status. This structure affects plan selection and enrollment timing for beneficiaries and creates specific edge cases in billing when a beneficiary switches between Medicare Advantage and Medigap.
Industry benchmark
CMS Medigap standardization rules (CFR 42 Chapter IV). State insurance commissioner Medigap regulations (MN, WI, MA use separate standardization). KFF Medicare Supplement Insurance profile.
Worked example
A 72-year-old patient with Original Medicare Part B and Medigap Plan G. Office visit with specialist. Medicare Part B: allowed $185; beneficiary deductible met; 20% coinsurance $37. Medigap Plan G pays $37 coinsurance. Medicare paid $148 + Medigap paid $37 = $185 total allowed captured. Patient owes zero. Practice's total collection: $185.
Frequently asked questions — Medigap (Medicare Supplement Insurance)
Is Medigap the same as Medicare Advantage?
No. Medicare Advantage (Part C) is a private-plan alternative to Original Medicare that bundles Parts A, B, and usually D into a single plan. Medigap supplements Original Medicare by covering cost-sharing. Beneficiaries have Original Medicare + Medigap, or Medicare Advantage — not both.
Can I switch from Medicare Advantage to Medigap?
During specific enrollment windows. Annual Enrollment Period (Oct 15 – Dec 7) allows switching between MA plans or MA-to-Original-Medicare. Medigap purchase after this switch requires going through Medigap insurer underwriting unless guaranteed-issue protections apply. Timing and eligibility are complex; SHIP counselors advise.
Are Medigap plans standardized?
In 47 states, yes — CMS defines standard benefit structures for Plans A through N. Insurers compete on premium and service, not benefit design. Wisconsin, Minnesota, and Massachusetts have their own state-specific standardization. Pre-2010 'Plan J' and similar legacy plans persist in some markets under grandfathered rules.
Why bill Medigap as secondary?
Medicare is the primary payer for beneficiaries with Original Medicare + Medigap. Medigap pays secondary on Medicare-eligible services. The claim flows: provider → Medicare → Medigap (automatic crossover for enrolled payers) → patient for any remaining balance (typically zero for Plan F/G).
Disclaimer
This glossary entry is operational reference for revenue-cycle and medical-billing professionals. It is not legal, clinical, or contractual advice. Industry benchmarks cite named public sources where available; always verify against the current guidance from the authority body before relying on a number in a contract, policy, or compliance filing.