Medicare Supplement Insurance, commonly known as Medigap, is private health insurance designed specifically to pay the out-of-pocket costs that Original Medicare leaves behind. According to the Centers for Medicare & Medicaid Services (CMS), Original Medicare covers roughly 80% of approved medical services, leaving the beneficiary responsible for the remaining 20%—with no annual cap on those expenses. A Medigap policy functions as a financial safety net, stepping in to pay your deductibles, copayments, and coinsurance, transforming variable and potentially catastrophic medical bills into predictable monthly premiums.
Comparing Medicare plans in Nevada
To understand how Medigap works, you must first understand the financial structure of the program it supplements. Original Medicare is divided into two primary parts: Part A, which covers inpatient hospital care, and Part B, which covers outpatient medical care, doctor visits, and durable medical equipment.
While Original Medicare is a robust federal health program, it was deliberately designed with significant cost-sharing requirements. When you rely solely on Part A and Part B, you face substantial financial exposure every time you receive medical care.
When you are admitted to a hospital, Part A does not pay from the first dollar. Instead, you are responsible for a steep inpatient hospital deductible for each “benefit period.” This deductible is not an annual figure; it applies each time you are admitted to the hospital after being out for 60 days. If you have a chronically ill year and are admitted multiple times, you could pay this deductible several times over.
Furthermore, if your hospital stay lasts longer than 60 days, Part A requires you to pay hundreds of dollars in daily coinsurance. If the stay extends beyond 90 days, the daily coinsurance penalty doubles, and eventually, your coverage runs out completely. Medigap policies step in to pay the Part A deductible, cover the daily coinsurance for long hospital stays, and provide an additional 365 days of hospital coverage after your Medicare benefits are exhausted.
Part B requires an annual deductible before Medicare pays anything for your outpatient care. Once that deductible is met, Medicare generally covers 80% of the Medicare-approved amount for your medical services. You are responsible for the remaining 20%.
Because there is no annual out-of-pocket maximum on Original Medicare, this 20% coinsurance can be financially devastating if you require expensive treatments like outpatient surgery, chemotherapy, or ongoing dialysis. If a medical procedure costs $100,000, your 20% responsibility is $20,000. Most Medigap policies cover this 20% coinsurance in full, ensuring that no matter how severe your medical needs become, your outpatient costs remain predictable.
Under federal Medicare law, doctors who do not accept “assignment” (meaning they do not accept the standard Medicare-approved rate as payment in full) are legally allowed to charge you up to 15% more than the Medicare-approved amount. This 15% surcharge is known as a Part B excess charge. While the vast majority of doctors in Nevada and across the United States accept Medicare assignment, some specialists do not. Certain Medigap policies are specifically designed to pay this 15% excess charge so you are never hit with a surprise balance bill.
To make shopping for supplemental insurance easier and fairer for consumers, the federal government standardized Medigap policies in the early 1990s. Today, Medigap policies are labeled with letters (Plans A through N).
Standardization means that every Medigap policy with the same letter must offer the exact same basic benefits, regardless of which insurance carrier sells it. A Plan G purchased from Anthem Blue Cross and Blue Shield provides the exact same medical coverage, pays the exact same gaps, and is accepted by the exact same doctors as a Plan G purchased from UnitedHealthcare or Aetna Medicare.
Because the benefits are identical by law, your decision largely comes down to selecting the correct letter for your health needs, and then finding the carrier that offers the most competitive premium and rate stability in Nevada.
For individuals who became eligible for Medicare on or after January 1, 2020, Plan G is the most comprehensive Medigap policy available to purchase. It covers everything that Original Medicare leaves behind, with one single exception: the annual Part B deductible.
With a Plan G policy, your healthcare experience is remarkably simple. At the beginning of the year, you pay your Part B deductible out of pocket. Once that deductible is satisfied, Plan G covers 100% of your Medicare-approved hospital and medical costs for the rest of the year. You will have no copayments at the primary care doctor, no coinsurance at the specialist, and no out-of-pocket costs for inpatient hospital care. Plan G also covers Part B excess charges and provides coverage for foreign travel emergencies, making it highly desirable for seniors who value absolute predictability in their budget.
Plan N has become increasingly popular in Nevada for retirees who want strong coverage but prefer a lower monthly premium. It offers similar core coverage to Plan G, but introduces small copayments to keep the monthly cost down.
With Plan N, you are responsible for the annual Part B deductible. After that, you may pay a copayment of up to $20 for doctor and specialist visits, and up to $50 for emergency room visits that do not result in inpatient admission. Importantly, Plan N does not cover Part B excess charges. If you see a doctor who does not accept Medicare assignment, you will be responsible for the 15% surcharge. However, because most doctors accept assignment, many beneficiaries find that the monthly premium savings of Plan N far outweigh the minor copayments and excess charge risks.
Historically, Plan F was the most popular Medigap policy in the country because it covered 100% of all Original Medicare gaps, including the Part B deductible. With Plan F, a beneficiary never paid a single out-of-pocket dime for Medicare-approved services.
However, federal legislation phased out Plan F for new beneficiaries to discourage over-utilization of the healthcare system. If your Medicare Part A effective date is January 1, 2020, or later, you are legally prohibited from purchasing Plan F. If you were eligible for Medicare before that date, you can still buy or keep Plan F, but you will likely face steeper annual premium increases compared to Plan G because the Plan F risk pool is closed to younger, healthier 65-year-olds entering the system.
| Benefit Feature | Plan G | Plan N | Plan F (Prior to 2020 only) |
|---|---|---|---|
| Part A Deductible | Covered 100% | Covered 100% | Covered 100% |
| Part B Deductible | You Pay | You Pay | Covered 100% |
| Part B Coinsurance (the 20%) | Covered 100% | Covered (except up to $20 doctor / $50 ER copays) | Covered 100% |
| Part B Excess Charges | Covered 100% | You Pay | Covered 100% |
| Foreign Travel Emergency | Covered (80% to plan limits) | Covered (80% to plan limits) | Covered (80% to plan limits) |
When it comes to purchasing Medigap, timing is everything. Unlike Original Medicare or Medicare Advantage, which operate on annual enrollment calendars where you can change your mind every year, the rules governing Medigap purchasing are strict, permanent, and tied directly to your age and initial enrollment.
The most critical window of time you will ever have in the Medicare system is your Medigap Open Enrollment Period (OEP). This is a one-time, six-month period that automatically begins the first day of the month in which you are both 65 years old and enrolled in Medicare Part B.
During this six-month window, you hold what federal law defines as a “guaranteed issue right.” This means:
If you have a severe chronic illness, a history of heart disease, or are actively undergoing cancer treatment, the insurance carrier must accept your application and give you the exact same preferred pricing as an applicant who runs marathons, provided you apply during this six-month window.
Once your six-month Medigap OEP expires, you generally lose your federal guaranteed issue rights. If you decide to apply for a Medigap policy later—perhaps because you are unhappy with your current coverage, or you initially chose not to buy supplemental insurance and have since gotten sick—you must pass medical underwriting.
Medical underwriting is the process by which an insurance carrier evaluates your health history to determine your risk. The application will include a lengthy questionnaire about your medical history, current medications, recent surgeries, and chronic conditions. Based on your answers, the carrier in Nevada has the legal right to:
Because denial is a real and common outcome for applicants with major health issues outside of their OEP, it is critical to evaluate your Medigap options thoroughly as you approach your 65th birthday. You may not get a second chance to buy this coverage if your health declines.
There are a few rare, specific circumstances where you might be granted a temporary guaranteed issue right outside of your Open Enrollment Period. For example, if you are enrolled in a Medicare Advantage plan and you move out of the plan’s service area (such as relocating from Nevada to another state), you have a guaranteed issue right to buy a Medigap policy in your new location without undergoing medical underwriting. Similarly, if your retiree employer health coverage suddenly terminates through no fault of your own, you are granted a short window to purchase a Medigap policy on a guaranteed issue basis.
When residents of Nevada transition to Medicare, they must make a fundamental, fork-in-the-road decision about how they want their healthcare delivered. You must choose between staying on Original Medicare and adding a Medigap policy, or abandoning Original Medicare and enrolling in a private Medicare Advantage (Part C) plan.
It is illegal for a broker or carrier to sell you both. You must choose one path.
Nevada offers a robust market of 105 different Medicare Advantage plans across the state, featuring major carriers like Humana, Select Health, Alignment Health Plan, and UnitedHealthcare. These Part C plans are highly marketed, often featuring zero-dollar monthly premiums and bundled extras like dental, vision, and gym memberships.
However, Medigap and Medicare Advantage operate on completely different mechanical models.
The Medigap Path: Medigap policies act as a secondary payer to the federal government. The federal government manages your care, dictates what is covered, and processes the claims. Medigap simply pays the bill that is left over. Because Medigap is attached to Original Medicare, there are no networks. You can see any doctor, specialist, or hospital in the entire country that accepts Medicare, and you never need a referral to see a specialist. Your monthly premium is higher than a Medicare Advantage plan, but your out-of-pocket costs when you actually get sick are remarkably low and entirely predictable.
The Medicare Advantage Path: If you choose Medicare Advantage, you are opting to have your Medicare benefits managed entirely by a private insurance company. These plans operate as managed care networks, typically Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). You must use the doctors and hospitals within the insurance company’s specific geographic network in Nevada, or face steep out-of-network fees (or outright denial of coverage). You will also pay copayments and coinsurance as you use services throughout the year, up to a yearly out-of-pocket maximum that can reach several thousand dollars. Furthermore, Medicare Advantage plans frequently require you to obtain prior authorization from the insurance company before receiving expensive tests, surgeries, or specialist care.
The Verdict: If your primary concern is maintaining the lowest possible monthly fixed cost and you are comfortable using a restricted local network of doctors in Nevada, Medicare Advantage is the appropriate choice. However, if you prioritize absolute freedom to choose your doctors nationwide, predictable maximum financial exposure during a catastrophic health event, and care without insurance-company red tape, Medigap is the vastly superior choice.
While the federal government dictates the medical benefits of every Medigap letter, state law regulates how the insurance companies price those policies over time. When comparing quotes from carriers like Anthem Blue Cross and Blue Shield or Aetna Medicare, it is essential to understand the pricing structure the carrier uses, as this dictates how fast your premiums will rise as you age.
There are three ways a Medigap policy can be priced:
1. Community-Rated (No-Age-Rated): In a community-rated policy, everyone who holds the same policy in the same geographic area pays the exact same monthly premium, regardless of their age. A 65-year-old and an 85-year-old pay the same rate. Premiums may go up over time due to inflation and healthcare costs, but they will not go up simply because you celebrated another birthday.
2. Issue-Age-Rated: Under an issue-age structure, your premium is based on your age at the exact time you buy the policy. If you buy the policy at age 65, your premium will always be based on the pricing tier for 65-year-olds. Your rates will still rise with annual inflation, but they will not automatically increase because you get older.
3. Attained-Age-Rated: This is the most common pricing structure used by carriers. In an attained-age policy, your premium is based on your current age (the age you have “attained”). Your premium will start out lower than community or issue-age policies when you are 65. However, your premium will automatically increase every single year as you get older, in addition to standard inflationary rate hikes. Over the course of a twenty-year retirement, attained-age policies often become the most expensive option.
When choosing a carrier, it is rarely wise to simply pick the cheapest monthly premium available today. You must look at the carrier’s history of rate increases and their pricing structure to ensure the policy will remain affordable when you are 80 or 85 years old.
A critical limitation of Medigap policies that surprises many new retirees is that they provide absolutely no coverage for retail prescription medications. While Medigap will cover drugs administered to you while you are an inpatient in a hospital (under Part A) or infused in a clinical setting like chemotherapy (under Part B), it does not cover the pills you pick up at your local pharmacy.
To get comprehensive healthcare coverage, you must pair your Medigap policy with a standalone Medicare Part D prescription drug plan. Part D plans are sold by private insurance companies and carry their own separate monthly premium, deductible, and copayment structure. Even if you do not currently take any medications when you turn 65, it is highly recommended that you enroll in a low-cost Part D plan. If you go without creditable drug coverage for more than 63 days after your initial enrollment period, the federal government will assess a permanent late enrollment penalty that is added to your Part D premium for the rest of your life once you finally do enroll.
Selecting a Medigap policy is one of the most important financial decisions of your retirement. Because of the medical underwriting rules, the policy you choose at age 65 may be the policy you are locked into for the rest of your life.
Compare Medigap policies, check current rates in your zip code, and ensure you enroll during your guaranteed issue window.
Get a Free ConsultationWe do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1–800–MEDICARE to get information on all of your options.