Original Medicare provides valuable coverage, but it also comes with coverage gaps that can expose retirees to financial risk.
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For millions of retirees, turning 65 and enrolling in Medicare can feel like crossing the finish line after decades of paying into the system. But what many are surprised to discover after enrolling is that Original Medicare — which includes Parts A and B — doesn’t cover everything. Hospital stays, doctor visits, and certain preventive services are included, but things like deductibles, copays and other uncovered services can quickly add up. Medicare is designed to cover about 80% of medical costs on average, after all, which leaves beneficiaries responsible for the rest.
Those out-of-pocket expenses can be manageable for some retirees. But for others — especially those with chronic conditions or those who have experienced major health events — the costs can be substantial. That’s where Medicare supplemental coverage, also called Medigap, comes in. These private insurance plans are designed to fill in the gaps left by Original Medicare, but they come with extra monthly premiums. As a result, the big question for many retirees is whether it’s truly necessary to pay for this additional coverage.
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Do retirees really need supplemental coverage with Original Medicare?
Not every retiree will need Medigap coverage. For example, someone with a very low anticipated level of medical care, significant savings or other insurance, like retiree employer coverage or Medicaid, may be able to manage without it. But for most Medicare beneficiaries, supplemental coverage is a critical tool to help control costs and protect against unpredictable medical bills. Here are a few key reasons why it’s often worth having:
Out-of-pocket costs with Original Medicare can be unpredictable and steep
Original Medicare doesn’t have a cap on out-of-pocket costs, meaning that there’s no annual maximum like there would be with most employer or marketplace health insurance plans. So, if you need frequent care or an extended hospital stay and you only have Original Medicare coverage, your share of the costs could be thousands of dollars, and that’s before factoring in any non-covered services.
For example, the Medicare Part A hospital deductible is $1,676 per benefit period in 2025. After 60 days in the hospital, you’re also responsible for daily coinsurance amounts that rise the longer your stay continues. Part B comes with its own annual deductible ($257 in 2025) and typically covers only 80% of approved services after that. That remaining 20% may not sound like much, but if you’re facing major surgeries, outpatient treatments or ongoing therapies, it can add up quickly.
Medigap policies help insulate you from these types of unpredictable expenses. Depending on the plan, this coverage can cover most or all of the deductibles and coinsurance, providing peace of mind and more stable health care costs over time.
Find out how you can fill in the gaps left by your Original Medicare coverage.
Health care needs typically increase with age, and Medicare doesn’t cover everything
Even healthy retirees can expect their medical needs to grow as they age. More frequent doctor visits, specialist care, lab tests and hospitalizations are common — and Original Medicare’s cost-sharing can become more burdensome as utilization increases.
Medicare also doesn’t cover some important types of care. Long-term care, most dental services, routine vision, hearing aids and prescription drugs (Part D is separate) are excluded. Supplemental coverage generally doesn’t pay for everything either, but many retirees pair Medigap with a standalone Part D prescription plan to help control medication costs.
Without supplemental coverage, retirees are more exposed to these rising costs at precisely the time in life when their health and often their income may be more vulnerable. A Medigap policy can serve as a financial buffer, though, making it easier to manage both routine and unexpected care as health needs evolve.
Supplemental coverage can provide more flexibility than Medicare Advantage
Many retirees consider Medicare Advantage (Part C) plans as an alternative to enrolling in Original Medicare plus Medigap. That’s because these plans often include prescription coverage and may have lower monthly premiums. However, they also typically use provider networks and may require referrals or prior authorizations for certain types of care, which can be limiting.
By contrast, Original Medicare combined with Medigap allows beneficiaries to see any provider nationwide who accepts Medicare, without network restrictions. This flexibility can be especially valuable for retirees who split their time between states, travel frequently or want the freedom to choose their doctors and specialists without worrying about coverage denials or network rules.
While Medigap premiums can be higher than some Medicare Advantage plans, the tradeoff is predictable cost-sharing and fewer hurdles when accessing care. For many retirees, the simplicity and predictability that come with the right Medicare supplemental policy make it a worthwhile investment.
The bottom line
Supplemental coverage isn’t mandatory when you enroll in Medicare, and some retirees may be able to manage without it. But for many people, Medigap plans play a crucial role in protecting against unexpected medical costs, providing flexibility and stabilizing out-of-pocket spending in retirement.
If you’re approaching Medicare eligibility or evaluating your current coverage, consider your health history, financial resources and tolerance for risk as part of the decision-making process. Comparing Medigap plan options and premiums can help you find a balance between cost and protection. And remember: If you want Medigap coverage, the best time to buy is typically during your six-month Medigap open enrollment period, which starts the month you’re 65 and enrolled in Part B. After that, you may face medical underwriting and higher costs.