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Medicare Supplement Insurance (Medigap) covers gaps in Medicare Parts A and B like copayments and deductibles. Costs vary by plan, location, age, insurer, underwriting, and smoking status, ranging from $32 to $346 monthly for a 65-year-old non-smoker in California. To save, compare quotes, enroll during the open enrollment period for guaranteed acceptance, and ask about discounts. Medigap helps with out-of-pocket costs but may not be worth it for healthy individuals. Premiums may be tax-deductible if medical expenses exceed 7.5% of income.

In 2026, Medicare presents several costly pitfalls for retirees. Missing the initial Part B enrollment can lead to permanent 10% penalties per year delayed. Medicare Advantage plans have reduced networks, risking high out-of-pocket costs. Income-related surcharges (IRMAA) can sharply increase premiums based on 2024 income. New prior authorization rules may delay care and cause out-of-pocket expenses. The $2,100 Part D drug cap excludes non-formulary drugs, risking high costs. Active management of benefits is essential to avoid these financial traps.

Most U.S. citizens 65+ qualify for free Medicare Part A but pay deductibles and coinsurance. Part B averages $203/month, varying by income. Medicare Advantage (Part C) costs vary, often with $0 premiums plus Part B premium, and have annual out-of-pocket limits up to $9,250. Part D prescription costs vary with income and penalties for late enrollment. Medigap supplements cover some out-of-pocket costs, with prices depending on insurer and enrollment timing.

Medicare Supplement Insurance (Medigap) fills gaps in Original Medicare by covering copays, coinsurance, and deductibles. There are 10 standardized plans, with Plans F, G, and N covering 85% of beneficiaries. Plan F offers the highest coverage for those eligible before 2020; Plan G is the top option for later enrollees. Enrollment is best during the six-month Medigap open enrollment period starting at age 65 with Part B.

Medicare Advantage plans vary yearly in benefits, costs, and provider networks. Review the Annual Notice of Change to avoid surprises. Understand your out-of-pocket costs, with a 2026 maximum limit of $8,850 for in-network services. Plans often require using network providers, and some need referrals for specialists. If unsatisfied, you can switch plans or return to Original Medicare during designated enrollment periods.

Medicare Part D users can reduce prescription costs by using Special Enrollment Periods to switch plans after life changes, appealing coverage denials, and requesting formulary exceptions for necessary drugs. Comparing pharmacy prices, exploring patient assistance programs, applying for the Low-Income Subsidy, and choosing generics or paying cash when cheaper also help lower expenses without sacrificing medication access.