Minnesota Medicare Beneficiaries: Is Medigap Right for You?

For most people, Original Medicare (Parts A and B) is the foundation of healthcare coverage after turning 65. While it’s comprehensive, it does not cover everything, and it leaves you responsible for significant out-of-pocket costs:

• Hospital (Part A): a deductible each benefit period for inpatient stays, plus daily copays if your stay extends beyond 60 days.

• Medical (Part B): an annual deductible, followed by 20% coinsurance on most services like doctor visits, outpatient surgery, and diagnostic tests.

• No cap on costs: Unlike Medicare Advantage (MAPD) plans, Original Medicare has no maximum out-of-pocket limit (MOOP). If you need extensive care, there’s no ceiling on what you could pay.

  
  

This is where a Medigap policy comes in. Medigap (also called Medicare Supplement Insurance) works alongside Original Medicare to cover these cost-sharing amounts. When Medicare approves a service:

1. Medicare pays its share first.

2. Your Medigap plan pays its share automatically.

3. You are left with little or nothing to pay out of pocket, depending on the plan you select.

   
   

In Minnesota, Medigap coverage is structured differently than in most other states, with three common choices: Basic Plan, Extended Basic Plan, and Plan N.

First, a Note on the Part B Deductible

For most people, the Medicare Part B deductible will be an out-of-pocket cost even with Medigap. None of Minnesota’s common plans (Basic, Extended Basic, or Plan N) cover it:

• If you were eligible for Medicare before January 1, 2020, you may still purchase a rider on the Basic Plan that covers the Part B deductible.

• If you became eligible after that date, federal law prevents Medigap plans from covering the Part B deductible, so you will always pay it each year (in 2025, the deductible is $257).

The Basic Plan

• Covers many of Medicare’s major cost-sharing gaps.

• Flexible: you can add optional riders for benefits such as the Part A hospital deductible, Part B excess charges, preventive care, and foreign travel emergency.

• Premium range: about $225 – $275/month + riders $20-$50/month.

The Extended Basic Plan

• Includes all the Basic benefits plus more comprehensive coverage built in.

• Automatically covers:

  • Medicare Part A inpatient hospital deductible.

  • Skilled nursing facility coinsurance.

  • Foreign travel emergency (limited benefit).

  • Part B excess charges (amounts billed above Medicare’s approved rate, up to 15%).

• Upside: simplicity and peace of mind: Most costs are covered without needing riders.

• Limitation: higher monthly premium than the Basic Plan or Plan N.

• Premium range: about $275 – $350/month.

  
  

Plan N

• Offers lower monthly premiums than Basic or Extended Basic.

• Includes similar coverage to Basic, but you’ll pay modest cost-sharing:

  • Up to $20 for office visits.

  • Up to $50 for ER visits (waived if admitted).

• Does not cover Part B excess charges.

• Does not cover the Part B deductible.

• Upside: solid coverage at a lower monthly cost, often seen as a good balance between protection and affordability.

• Limitation: less predictable than Extended Basic because of the small copays, and no coverage for excess charges.

• Premium range: about $175 – $225/month.

  
  

Minnesota Medigap Plan Comparison

Feature	Basic Plan	Extended Basic Plan	Plan N
Monthly premium	$225 – $275	$250 – $350	$175 – $225
Cost-sharing	Minimal, varies by riders	Very little; most costs covered	$20 office copay; $50 ER copay (waived if admitted)
Part A hospital deductible	Rider required	Included	Included
Skilled nursing facility coinsurance	Rider required	Included	Included
Part B deductible	Rider available only if eligible before 2020	Not covered	Not covered
Part B excess charges	Rider required	Included	Not covered
Foreign travel emergency	Rider required	Included (limited benefit)	Not covered
Prescription drugs (Part D)	Not included — must purchase separately	Not included — must purchase separately	Not included — must purchase separately

Important Exclusions to Keep in Mind

While Medigap helps cover Medicare’s cost gaps, it does not expand Medicare’s benefit set. That means:

• Annual physicals are not covered (Medicare provides only a “Welcome to Medicare” and Annual Wellness Visit, which are not the same as a full physical).

• Dental, vision, and hearing coverage are not included (separate plans are available).

• Prescription drugs (Part D) are not included; you’ll need to add a standalone plan.

• Foreign travel emergency is included in Extended Basic (and as a rider in Basic), but the benefit is limited.

  • If you travel internationally, it’s wise to purchase a separate travel insurance policy for each trip to ensure you’re fully protected abroad.

• Services Medicare itself doesn’t cover (like cosmetic surgery, acupuncture beyond approved visits, etc.) won’t be paid by Medigap either.

  
  

Carrier “Extras” vs. Standardized Benefits

Although by law, carriers must offer the same standardized Medigap benefits, some companies add perks such as:

• Gym memberships or fitness discounts.

• Allowances toward annual physicals.

• Eyewear or hearing aid discounts.

  
  

These can be valuable, but it’s important to remember they are not part of the standardized Medigap coverage. Your decision should focus first on:

1. Premium cost

2. Rate stability over time 

3. The Medigap plan design (Basic, Extended Basic, or Plan N)

   
   
   
   

The Upside Across All Three Plans

No matter which plan you choose:

• You’ll have the freedom to see any provider nationwide who accepts Medicare, with no network restrictions.

• You won’t deal with prior authorizations or denied claims.  If Medicare covers it, your Medigap plan must pay its share.

• Your benefits are stable year over year; they don’t change annually the way MAPD plans do. However, plan premiums can (and often do) increase.

• Your plan is guaranteed renewable for life as long as you pay the premium.

  
  

The Bottom Line

Minnesota’s Medigap system may look different than other states, but the value is the same: predictable coverage, freedom to see any Medicare provider, and benefits that don’t change year after year.

Premiums generally range between $175 and $350/month depending on plan type, and most people should expect 3–5% increases annually. That’s why it’s important to consider not only today’s cost, but how your plan may fit your budget in the years ahead.

And remember: if Medigap ever becomes less desirable for you, whether because of cost or personal preference, you are not locked in for life. You can always choose to move to a Medicare Advantage (MAPD) plan during the Annual Enrollment Period (October 15–December 7). In fact, for many people, Medicare Advantage is a strong and appropriate choice in Medicare Health Care Coverage. (Read more about MAPD vs Medigap here.)

Why Work With an Independent Agent?

Choosing between Medigap and MAPD, and then deciding what plan is right for you, involves weighing your health needs, budget, and lifestyle. This is where working with an independent agent who specializes in Medicare makes all the difference. A Medicare-focused agent can:

• Compare multiple carriers side by side.

• Explain the long-term implications of your choices.

• Find coverage most appropriate for your health, budget, lifestyle, preferences and concerns, and lists of prescriptions and providers.

• Ensure that you have continuous coverage without lapses or gaps.

• Provide ongoing support year after year.

  
  

The result? Confidence and peace of mind that you have the coverage that truly fits you.

And best of all, when you work with a licensed, independent agent, there is no cost to you! Visit Milestone Medicare online or contact us to learn more.