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, yet it leaves enrollees exposed to significant out-of-pocket costs. Deductibles, copays, and coinsurance accumulate quickly on a fixed retirement budget, and there is no annual cap on what you can spend. A serious illness or a string of specialist visits could generate thousands of dollars in unexpected bills. The standard Medicare Part B premium alone runs $202.90 per month in 2026, up nearly 10% from $185.00 the year before, and that figure covers only a portion of what many retirees ultimately owe for their care.

That’s where Medigap comes in.

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

Plan G offers broader coverage. Plan N offers lower monthly premiums. Choosing wisely between the two can save thousands of dollars over time, while choosing poorly could cost a retiree roughly $36,000 across a 20-year 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 neither plan covers is the Part B deductible. For 2026, that deductible is $283, up $26 from the prior year. It adjusts annually alongside Medicare’s actuarial rates, so enrollees should build in room for modest increases over time.

Despite that shared foundation, Plan G and Plan N diverge in two important ways.

First, Plan G covers Part B excess charges. These are amounts that certain providers may bill above Medicare-approved rates when they do not accept Medicare assignment, with a legal ceiling of 15% above the Medicare-approved rate. Plan N provides no protection against those charges. According to KFF data, more than 98% of Medicare providers do accept assignment, so excess charges are relatively uncommon. They can be substantial when they occur, particularly with certain specialists. It is also worth noting that eight states prohibit excess charges entirely: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. Enrollees in those states gain nothing from Plan G’s excess charge protection, making Plan N’s gap on that point essentially irrelevant for them.

Second, Plan G covers your full Part B coinsurance once the annual deductible is met, so 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. For a 65-year-old enrolling at the national average, Plan G runs roughly $220 per month while Plan N runs roughly $171 per month, a gap of about $49. That spread is meaningful, but the savings erode quickly 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 rapidly cancel out Plan N’s premium advantage. 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 structure 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, whose providers all accept Medicare assignment, and who are comfortable with modest copays may find Plan N saves them meaningful money each year. Neither answer is universally correct, which is why running the numbers for your own situation matters before committing to a plan letter.

A third option is worth putting on the comparison list: High-Deductible Plan G. It carries the same broad coverage as standard Plan G, but pairs it with a significantly lower monthly premium in exchange for a high deductible you must meet before the plan begins paying. For 2026, the CMS-set deductible for High-Deductible Plan G is $2,950, up from $2,870 in 2025. CMS has already announced the figure will rise again to $3,050 in 2027. For healthy enrollees who can absorb a difficult year financially and want protection against catastrophic costs at a lower ongoing premium, this option deserves a look alongside Plans G and N.

The once-popular Plan F covered the Part B deductible in addition to all the benefits Plan G provides today, but it 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, which largely explains why it has become the dominant choice in the market.

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

Editor’s note: This pass corrected the list of states that prohibit Medicare Part B excess charges from “eight states plus Washington, D.C.” to eight states only (Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont), reflecting CMS rules and multiple authoritative sources. It also added that the High-Deductible Plan G deductible rises to $3,050 in 2027, per CMS, and incorporated the 2025-to-2026 Part B premium increase of $17.90 per month as context.

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