Medicare Supplement Insurance (Medigap): The Complete Guide to Maryland

Medicare Supplement Insurance, commonly known as Medigap, is private health insurance designed to fill the costly “gaps” left behind by Original Medicare. If you rely solely on Medicare Part A (Hospital Insurance) and Part B (Medical Insurance), you are exposed to significant financial risk. Original Medicare requires you to pay various deductibles, copayments, and a 20% coinsurance for most outpatient services—and crucially, it has no out-of-pocket maximum to protect you from catastrophic medical bills.

Medigap policies step into this void. When you undergo a medical procedure, Original Medicare pays its approved share first. Then, your Medigap policy automatically pays some or all of the remaining balance, depending on the specific lettered plan you chose.

Choosing a Medigap plan is one of the most consequential financial decisions you will make as you transition into retirement. This comprehensive guide breaks down exactly how Medigap functions in Maryland, the standardized plans available, the critical timing of your enrollment windows, and how to evaluate your options alongside Medicare Advantage.

The Anatomy of Original Medicare’s Gaps

To understand the value of Medigap, you must first understand the specific costs it is designed to pay. Original Medicare is highly subsidized, but it is not free, and its cost-sharing mechanisms are distinct from the employer-sponsored health insurance you may be used to.

When you use healthcare services under Original Medicare, you face three primary types of out-of-pocket expenses:

1. The Part A Inpatient Hospital Deductible If you are admitted to the hospital, Medicare Part A does not pay the entire bill from day one. Instead, you are responsible for a substantial deductible per “benefit period” (which is reset after you have been out of the hospital for 60 consecutive days, meaning you could potentially pay this deductible multiple times in a single year). After the deductible is met, Part A covers the first 60 days of your stay in full, but days 61 through 150 require steep daily copayments.

2. The Part B Annual Deductible Before Medicare pays anything for outpatient services—such as doctor visits, physical therapy, durable medical equipment, or outpatient surgeries—you must meet an annual Part B deductible. While this deductible is relatively low compared to commercial insurance, it resets every January 1st.

3. The Part B 20% Coinsurance (The Infinite Gap) This is the most significant financial risk in the Original Medicare system. Once your Part B deductible is met, Medicare generally pays 80% of the Medicare-approved amount for services. You are responsible for the remaining 20%. Because Original Medicare does not have a legally mandated out-of-pocket maximum, there is no ceiling on that 20%.

If you require a complex outpatient surgery that costs $30,000, Medicare pays $24,000, and you are billed $6,000. If you require expensive chemotherapy infusions administered in a clinical setting (which falls under Part B), that 20% coinsurance can rapidly drain your retirement savings.

Medigap exists precisely to cap this liability. By paying a fixed monthly premium to a private insurance company, you transfer the risk of that unlimited 20% coinsurance away from yourself and onto the carrier.

The Standardization of Medigap Policies

One of the most consumer-friendly aspects of Medigap is that the federal government heavily regulates and standardizes it. Medigap policies are identified by letters—Plans A, B, C, D, F, G, K, L, M, and N.

Standardization means that every Medigap policy with the same letter must offer the exact same basic medical benefits, regardless of which insurance company sells it.

A Medigap Plan G purchased from UnitedHealthcare covers the exact same medical services, in the exact same percentages, as a Medigap Plan G purchased from Humana, Aetna Medicare, or CareFirst BlueCross BlueShield Medicare Advantage. The insurance carrier cannot add restrictive medical clauses, change the coinsurance coverage, or alter the core benefits of the lettered plan.

Because the coverage is identical, you do not need to compare what the plans cover between carriers; you only need to compare the premium price, the pricing structure (how the plan’s cost will increase over time), and the carrier’s reputation for customer service and financial stability.

What Medigap Explicitly Does Not Cover

While Medigap is incredibly effective at paying Original Medicare’s deductibles and coinsurance, it only pays out if Original Medicare approves the primary claim. If Medicare does not cover a service, Medigap will not cover it either.

By law, standard Medigap policies do not cover:

• Retail prescription drugs (You must buy a separate Medicare Part D plan)
• Routine dental care, extractions, or dentures
• Routine vision care or eyeglasses
• Hearing aids and exams for fitting them
• Long-term custodial care (nursing homes)
• Private-duty nursing

To secure coverage for these services, beneficiaries must look to standalone dental/vision policies, standalone Part D plans, or consider Medicare Advantage plans that bundle these benefits together.

Deep Dive: The Most Popular Medigap Plans in Maryland

While there are ten standardized letter plans, the vast majority of Maryland residents focus their attention on three main options: Plan G, Plan N, and Plan F. Because Plan F is no longer available to new Medicare beneficiaries, Plan G and Plan N dominate the modern market.

Medigap Plan G: The Comprehensive Standard

For beneficiaries newly eligible for Medicare on or after January 1, 2020, Plan G offers the most comprehensive coverage available by law.

Plan G covers 100% of the Part A hospital deductible, 100% of hospital copayments, 100% of the Part B 20% coinsurance, and 100% of Part B excess charges. It also includes foreign travel emergency coverage (up to plan limits).

The only Medicare-approved out-of-pocket medical expense you will pay with a Plan G is the annual Part B deductible.

Once you pay that relatively small annual deductible, Plan G covers the rest of your Medicare-approved medical and hospital costs for the entire year. You will not pay a copay to see your primary care doctor, you will not pay a copay to see a specialist, and you will not pay coinsurance for surgeries. For individuals who want maximum predictability and are willing to pay a higher monthly premium for peace of mind, Plan G is the premier choice.

Medigap Plan N: The Cost-Sharing Alternative

Plan N is designed for beneficiaries who want strong protection against catastrophic bills but are willing to take on a small amount of cost-sharing in exchange for lower monthly premiums.

Like Plan G, Plan N covers the Part A hospital deductible and the massive Part B 20% coinsurance. However, Plan N introduces three specific out-of-pocket costs:

1. The Part B Deductible: Like Plan G, you are responsible for this annual deductible.
2. Office Visit Copays: You may pay a copayment of up to $20 for some doctor’s office visits.
3. Emergency Room Copays: You may pay a copayment of up to $50 for emergency room visits (this copay is waived if you are admitted to the hospital).
4. Part B Excess Charges: Plan N does not cover Part B excess charges. (An excess charge occurs if a doctor does not accept Medicare “assignment” and legally charges up to 15% more than the Medicare-approved amount. In practice, the vast majority of doctors accept assignment, making excess charges relatively rare, but the risk does exist).

For relatively healthy individuals who do not visit the doctor frequently, the monthly premium savings of Plan N often outweigh the occasional $20 copayments, making it a highly cost-effective strategy over a long retirement.

Medigap Plan F: The Grandfathered Plan

Plan F is the only plan that covers everything, including the Part B deductible, providing true first-dollar coverage. However, federal legislation phased out Plan F. If you became eligible for Medicare on or after January 1, 2020, you cannot legally purchase a Plan F policy. If you were eligible before that date, you can still purchase Plan F or remain on an existing Plan F policy.

Because the pool of people enrolled in Plan F is steadily aging and no young, healthy 65-year-olds are entering the risk pool to subsidize the costs, premiums for Plan F policies have generally been rising faster than those for Plan G. Many long-time Plan F policyholders ultimately save money by undergoing medical underwriting to switch to a Plan G.

High-Deductible Options (HDG and HDF)

Some carriers offer High-Deductible versions of Plan G (HDG) and Plan F (HDF). These plans offer drastically lower monthly premiums, but require you to pay a large out-of-pocket deductible before the Medigap plan begins paying anything. Once the high deductible is met, the plan functions exactly like a standard Plan G or F. This is a purely catastrophic safety net for individuals who want low fixed monthly costs and have the cash reserves to comfortably absorb a high deductible in a bad health year.

Eligibility and Enrollment Timing: The Rules You Must Not Break

Understanding when to enroll in Medigap is arguably more important than choosing which letter plan to buy. The rules governing Medigap enrollment dictate whether you can be approved for coverage and how much you will pay.

The Medigap Open Enrollment Period (OEP)

Your Medigap Open Enrollment Period is a one-time, six-month window. It begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B.

During these six months, you have federal Guaranteed Issue rights. This means any insurance carrier offering Medigap policies in Maryland must:

1. Sell you any Medigap policy they offer.
2. Charge you the exact same premium they charge someone in perfect health.
3. Cover all your pre-existing medical conditions without delay.

You cannot be denied coverage, and you cannot be charged a higher premium due to your medical history during this window.

If you miss this six-month window, you lose your federal right to buy a policy without medical underwriting.

Medical Underwriting Outside of OEP

If you attempt to apply for a Medigap policy after your six-month Open Enrollment Period has expired—and you do not have a specific Guaranteed Issue right—the insurance company is legally permitted to subject you to medical underwriting.

The carrier will require you to answer detailed health questionnaires and may request access to your medical records. Based on their underwriting guidelines, the carrier can:

• Approve your application at the standard rate.
• Approve your application but charge you a higher premium due to health risks.
• Deny your application entirely.

Conditions that frequently lead to outright denial include active cancer treatment, end-stage renal disease (ESRD), recent heart attacks or strokes, severe neurological disorders (like Parkinson’s or Alzheimer’s), or pending surgeries.

Note: Many people confuse the one-time Medigap Open Enrollment Period with the Medicare Annual Election Period (AEP) that runs from October 15 to December 7 every year. The AEP is for switching Part D drug plans or Medicare Advantage plans. It does not grant you a Guaranteed Issue right to buy a Medigap policy without medical underwriting.

Guaranteed Issue (GI) Rights

In certain specific situations, federal or state law grants you a Guaranteed Issue right outside of your Open Enrollment Period, allowing you to buy a Medigap policy without medical underwriting. Common triggers for GI rights include:

• You are enrolled in a Medicare Advantage plan, and the plan stops serving your geographic area or leaves Medicare entirely.
• You have retiree health coverage through a former employer, and that coverage is terminating through no fault of your own.
• You joined a Medicare Advantage plan when you were first eligible for Part A at age 65, and within the first year, you decide you want to switch to Original Medicare (known as your “Trial Right”).

If you believe you qualify for a Guaranteed Issue right, you must keep the official letters proving your loss of coverage, as you will need to submit them with your Medigap application.

Pricing Mechanisms: How Medigap Costs Change Over Time

Because Medigap plan benefits are standardized, comparing premiums is the primary way beneficiaries choose between carriers. However, looking only at the initial premium is a mistake. You must understand how the carrier prices its policies, as this dictates how fast your premiums will rise as you age.

In Maryland, Medigap policies are generally priced using one of three methods:

1. Attained-Age Rated (Most Common) The premium is based on your current age (the age you have “attained”). Your premium starts lower when you are 65 but automatically increases every year as you get older. In addition to age-based increases, premiums also rise due to general healthcare inflation. Most policies on the market today use attained-age rating.

2. Issue-Age Rated (Less Common) The premium is based on the age you were when you first bought (“were issued”) the policy. If you buy the policy at 65, you will always pay the 65-year-old baseline rate, even when you turn 80. While the base rate does not increase due to your advancing age, the premium will still increase over time due to economic inflation and rising healthcare costs.

3. Community Rated (Rare) The premium is the same for everyone who has the policy in a specific geographic area, regardless of their age. A 65-year-old and an 85-year-old pay the exact same baseline premium. Like the others, premiums will still rise over time due to inflation.

When comparing quotes from carriers like Aetna Medicare, Alterwood Advantage, or UnitedHealthcare, ask your broker whether the plan is attained-age or issue-age, and look at the carrier’s historical rate increases over the past five years to gauge stability.

Medigap vs. Medicare Advantage (Part C): The Fork in the Road

When you enroll in Medicare, you face a fundamental choice in how you receive your benefits: stay on Original Medicare and buy a Medigap policy, or replace Original Medicare entirely with a Medicare Advantage (Part C) plan.

Carriers offering Medicare coverage in Maryland include Aetna Medicare, Alterwood Advantage, CareFirst BlueCross BlueShield Medicare Advantage, HealthSpring, Humana, Johns Hopkins Advantage MD, Kaiser Permanente, and UnitedHealthcare. Some of these carriers focus heavily on Medicare Advantage, while others offer robust Medigap portfolios.

Here is how the two paths compare:

The Medigap + Part D Path

Pros:

• Ultimate freedom of choice. There are no networks. You can see any doctor or facility in the U.S. that accepts Medicare.
• No referrals required to see a specialist.
• Highly predictable costs. If you have Plan G, you know exactly what your maximum medical out-of-pocket will be for the year (the Part B deductible).
• National coverage, making it ideal for “snowbirds” who split their time between Maryland and another state.

Cons:

• Higher fixed monthly costs. You pay a premium for Part B, a premium for Medigap, and a premium for Part D.
• Does not include routine dental, vision, or hearing benefits.

The Medicare Advantage (Part C) Path

Pros:

• Lower fixed monthly costs. Many MA plans have $0 premiums (though you must still pay your Part B premium).
• Bundled convenience. Medical, hospital, and Part D prescription coverage are usually combined into one plan card.
• Extra perks. Plans often include allowances for dental, vision, hearing, and over-the-counter items.

Cons:

• Strict provider networks (HMOs and PPOs). If you go out-of-network, you may have no coverage or face severe financial penalties.
• Prior authorizations are often required for surgeries, imaging, and expensive treatments.
• Unpredictable backend costs. You pay copayments and coinsurance as you use services, up to an annual out-of-pocket maximum that can be as high as $8,000+ for in-network care.

If your priority is keeping fixed monthly expenses low and you are comfortable navigating a localized HMO/PPO network, Medicare Advantage is a viable choice. If your priority is unfettered access to the best specialists in the country and protecting your retirement assets from massive hospital bills, Medigap is the superior structural choice.

Factors to Consider When Choosing a Medigap Plan in Maryland

When you are ready to select your policy, use this framework to narrow your options:

1. Select Your Letter First: Decide between Plan G and Plan N based on your tolerance for out-of-pocket copays. Do not look at carrier prices until you have firmly decided on the letter you want.
2. Compare Premiums: Look at the monthly premiums for your chosen letter across multiple carriers. Because the coverage is identical by law, you should generally look for the most competitively priced option.
3. Check for Household Discounts: Many carriers offer a “household discount” (typically ranging from 5% to 12%) if two people in the same home are enrolled in Medigap policies from the same company. If you and your spouse are both enrolling, a slightly higher base premium with a 10% discount might beat a carrier with a lower base premium and no discount.
4. Evaluate Carrier Stability: Your goal is to keep this policy for life, avoiding the need for medical underwriting later. Ask your broker about the carrier’s financial rating (A.M. Best) and their history of rate increases in Maryland over the last several years.

Action Plan: Navigating Your Medigap Enrollment

The optimal time to begin planning your Medicare transition is roughly six months before your 65th birthday.

First, determine if you are continuing to work and whether your employer health coverage is considered “creditable” by Medicare standards. If it is, you may be able to delay Part B and your Medigap Open Enrollment Period without penalty.

If you are retiring at 65, enroll in Medicare Part A and Part B approximately three months before your birth month. Once you receive your red, white, and blue Medicare card with your official Part B effective date, your six-month Medigap Open Enrollment clock is visible.

Because Medigap pricing structures, household discount rules, and underwriting guidelines vary significantly between carriers, working with an independent, licensed insurance broker is highly recommended. A broker can pull quotes from the major carriers operating in Maryland, verify whether your preferred doctors accept Medicare assignment, and ensure you do not accidentally miss your critical Guaranteed Issue window.

Frequently Asked Questions