Medigap Plan G or Plan N at 65: Why the Plan Letter Choice Could Cost a Retiree $36,000 Over a 20-Year Retirement

Once you turn 65, you’re generally eligible to enroll in Medicare. But eligibility is just the starting point.

Original Medicare provides real health coverage, but it leaves enrollees exposed to significant out-of-pocket costs. Deductibles, copays, and coinsurance can accumulate quickly, straining a fixed retirement budget. There is also no annual cap on what you can spend, so a serious illness or a stretch of specialist visits could generate thousands of dollars in unexpected bills.

That’s where Medigap comes in.

Also known as Medicare supplement insurance, Medigap policies are sold by private insurers and are designed to cover many of the costs that original Medicare leaves behind. Among all available plan letters, Plan G and Plan N are consistently the most popular choices for new enrollees who became eligible after January 1, 2020, and for good reason. Each fills a meaningful gap in original Medicare coverage, but they do it differently, and that difference carries a real dollar value.

Plan G offers broader coverage than Plan N. Plan N offers lower monthly premiums. Choosing wisely between the two can save thousands of dollars across a full retirement.

Plan G vs. Plan N: Understanding the similarities and differences

Medigap Plan G and Plan N share a strong foundation of core benefits. Both cover Medicare Part A coinsurance, the Part A hospital inpatient deductible (set at $1,736 per benefit period in 2026), skilled nursing facility coinsurance, the first three pints of blood each year, and foreign travel emergency care up to plan limits.

One cost that neither plan covers is the Part B deductible. For 2026, that deductible is $283, up $26 from $257 in 2025. It adjusts annually alongside Medicare’s actuarial rates, so enrollees should budget for modest increases over time.

Despite their similarities, Plan G and Plan N diverge in two important ways.

First, Plan G covers Part B excess charges. These are amounts that certain providers are legally permitted to bill above Medicare-approved rates when they do not accept Medicare assignment. The legal ceiling on such charges is 15% above the Medicare-approved rate. Plan N provides no protection against those charges. About 98% of providers do accept Medicare assignment, so excess charges are relatively uncommon, but they can be substantial when they occur, particularly with certain specialists.

Second, Plan G covers your full Part B coinsurance once the annual deductible is met, meaning you owe nothing for Medicare-approved outpatient care beyond that one yearly amount. Plan N covers Part B coinsurance for most services, but not all. With Plan N, you could face copays of up to $20 for certain office visits and up to $50 for emergency room visits where you are not admitted to the hospital.

How Plan N could cost you $36,000 more in your lifetime

Because Plan N covers less, its premiums run lower. Depending on your age, gender, and location, Plan N typically costs $20 to $80 less per month than a comparable Plan G policy. That spread can be meaningful, but the savings can evaporate if your actual healthcare usage is high.

Frequent doctor visits, occasional emergency room trips, or care from providers who do not accept Medicare assignment can quickly erode Plan N’s premium advantage. The copays and excess charges accumulate in ways that are easy to underestimate at enrollment. Over a 20-year retirement, those added out-of-pocket costs could total an additional $36,000 compared with the predictable, all-in cost of Plan G.

The decision comes down to two variables: your health history and your tolerance for cost variability.

Frequent healthcare users, people managing chronic conditions, or anyone who values completely predictable bills will generally find Plan G the stronger fit. Enrollees in good health who see the doctor rarely and are comfortable with modest copays may find Plan N saves them real money each year. Neither answer is universally correct, which is why running the math for your own situation matters.

It is also worth knowing that a third option exists for new enrollees: High-Deductible Plan G. It carries the same broad coverage as standard Plan G but comes with a significantly lower monthly premium in exchange for a high deductible that you must meet before the plan begins paying. For 2026, the CMS-set deductible for High-Deductible Plan G is $2,950. For healthy enrollees who want a safety net against catastrophic costs and have enough in savings to absorb a difficult year, it can be worth a look alongside Plans G and N.

The once-popular Plan F, which covered the Part B deductible in addition to all the benefits Plan G provides today, was discontinued for anyone who became eligible for Medicare on or after January 1, 2020. Plan G is now the closest equivalent for new enrollees, and that history explains why it has become the dominant choice in the market.

Your best approach is to compare the full range of available Medigap options in your area, factor in your health history and expected usage, and weigh both premium costs and realistic out-of-pocket exposure before committing to a plan letter.

Editor’s note: This pass corrected the High-Deductible Plan G deductible from $2,870 to $2,950, which is the figure CMS officially set for 2026, and updated the Medicare assignment acceptance rate from approximately 97% to approximately 98%, consistent with the most recent KFF and CMS participation data. The Part A inpatient deductible of $1,736 and the 15% legal ceiling on Part B excess charges were also added for context.

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