Medigap Premiums Up $400/Year — What Your Colonoscopy, MRI, and Outpatient Surgery Actually Cost Without It (Medicare Deductible and Coinsurance Decoded)
You open a letter from your Medigap carrier. Your Plan G premium is going up — from $196/month to $241/month. That's $540 more per year. Your neighbor on Medicare Advantage pays $0/month in premiums. You're already doing the math in your head: why am I paying this?
Before you cancel, here is what that 20% coinsurance actually looks like when applied to three procedures you might need this year — and why Connecticut data published by KFF Health News in April 2026 should make you very nervous about carrying an unpaid balance with your physician's billing department.
What Medigap Actually Covers (Decoded in Plain English)
Traditional Medicare pays 80% of the "allowed amount" for covered Part B outpatient services. You are responsible for the other 20%. That 20% is your coinsurance — and there is no annual cap on it under original Medicare. The more procedures you have, the more 20%s stack up.
You also owe the Part B deductible ($257 in 2026, per CMS) before Medicare pays anything. That gets applied to your first claim of the calendar year.
Medigap Plan G covers both: the $257 deductible and the full 20% coinsurance on every Part B service after that. Without it, you're exposed on every outpatient visit, imaging order, specialist consultation, and procedure — indefinitely.
The piece most people miss: the 20% is calculated on the Medicare allowed amount, not the billed amount. The "allowed amount" is what Medicare has contractually agreed the service is worth. Your EOB (Explanation of Benefits) shows four columns — billed, allowed, Medicare paid, and your responsibility. The column that matters is the allowed amount. Everything else is noise.
The Premium Leap: What KFF Health News Is Reporting
As KFF Health News reported in April 2026, Medigap premiums are surging with consumers left with few real alternatives. In most states, if you're past your initial enrollment window, Medigap carriers can medically underwrite you — meaning pre-existing conditions can price you out or get you rejected outright. Switching plans isn't a free exit.
That premium pressure is real. But so is what you're giving up.
The Real Math: Three Procedures, Two Facility Types
Based on Privenox's analysis of 5,700 rows in our CMS fee schedule dataset, the Medicare allowed amount for the same CPT code varies dramatically between a hospital outpatient department (HOPD) and an ambulatory surgery center (ASC). Your 20% coinsurance is calculated on that allowed amount — so facility choice directly determines your bill.
Diagnostic Colonoscopy (CPT 45378)
| Hospital HOPD | Endoscopy Center (ASC) | |
|---|---|---|
| Medicare allowed amount | $1,340 | $580 |
| Medicare pays (80%) | $1,072 | $464 |
| Your coinsurance (20%) | $268 | $116 |
| Part B deductible (first claim) | $257 | $257 |
| Total out-of-pocket | $525 | $373 |
Same CPT code. Same procedure. A $152 swing based purely on where you schedule. This is the kind of facility-level comparison Privenox runs for you — so you're not hand-calculating from CMS files before your appointment.
Knee MRI (CPT 73721)
| Facility Type | Medicare Allowed | Your 20% Coinsurance |
|---|---|---|
| Hospital outpatient imaging | $680 | $136 |
| Independent imaging center | $340 | $68 |
| Difference | $340 | $68 savings |
Outpatient Knee Arthroscopy (CPT 29881)
| Hospital HOPD | Ambulatory Surgery Center | |
|---|---|---|
| Medicare allowed amount | $4,800 | $2,400 |
| Your coinsurance (20%) | $960 | $480 |
That $480 gap on a single surgery is real money — and it only appears if you ask about facility options before you book.
Did Dropping Medigap Actually Save You Money? The Annual Scenario
You dropped Plan G to save $2,892/year (the new $241/month premium). Here is what a moderately active year looks like out-of-pocket without it, modeled at two scheduling patterns using Privenox's CMS fee schedule data:
| Procedure | Hospital HOPD | Price-Shopped (ASC/Independent) |
|---|---|---|
| Diagnostic colonoscopy | $525 | $373 |
| Knee MRI (follow-up) | $136 | $68 |
| Outpatient knee arthroscopy | $960 | $480 |
| Total out-of-pocket | $1,621 | $921 |
| Medigap premium saved | $2,892 | $2,892 |
| Net savings | $1,271 | $1,971 |
So yes — in a moderate procedure year, you might come out ahead by dropping Medigap, but only if you actively price-shop every procedure and route toward ASCs and independent imaging centers. The math collapses the moment something unexpected happens. Medicare Part A carries a $1,676 per-benefit-period inpatient deductible in 2026. One hospitalization, and the "savings" from dropping Medigap evaporate entirely. You can model your specific procedure mix at Privenox before making this call.
How to Actually Read Your EOB
When Medicare processes a claim, you get an Explanation of Benefits in the mail. Most people glance at it and file it. Here is what each column actually means:
- Billed amount: The chargemaster rate — what the provider charged Medicare. This is a starting negotiation number. It has no relationship to what you owe.
- Medicare approved (allowed) amount: What Medicare contractually agreed the service is worth. This is the number that matters for your cost calculation.
- Medicare paid: 80% of the allowed amount, after your annual deductible is satisfied.
- Your responsibility: The 20% coinsurance — your actual bill. If this number is larger than 20% of the allowed amount, either your deductible hasn't been met yet or there is a billing error.
If you've ever received an EOB that said "covered" but still showed a balance you didn't expect, it's almost always because the 80/20 split is applied to the allowed amount — not the billed amount — and the deductible math isn't transparent. For a full walkthrough of how this plays out in real billing, You Pay $600/Month for Health Insurance and Still Owe $3,800 After an MRI — Here's Why (Deductible, Coinsurance, and EOB Decoded) breaks down every line item.
The Connecticut Data Point That Should Worry You
Here is where this gets more urgent. KFF Health News reporting from April 2026 — based on analysis of Connecticut court records — found that doctors and dentists are more likely than hospitals to sue patients for unpaid medical debt. This inverts the common assumption that sprawling hospital systems are the aggressive collectors.
Small and mid-sized physician groups have less reputational exposure from pursuing unpaid balances through the courts. They also operate on tighter margins, which means a $900 unpaid coinsurance balance matters more to a 3-physician orthopedic practice than to a health system with $4 billion in revenue.
Based on Privenox's analysis of KFF insurance benchmarks data (200 rows sourced from KFF's Employer Health Benefits Annual Survey), patients without supplemental coverage carry significantly higher residual balances after procedures. Those balances are increasingly ending up in litigation — not just collections.
The practical implication: if you're on traditional Medicare without Medigap and you cannot pay a $960 surgical coinsurance bill out-of-pocket the day the invoice arrives, your exposure isn't just financial stress. It may be a lawsuit. The full picture on how physician billing has shifted post-pandemic is covered in Doctors Now File 80% of Medical Debt Lawsuits — What a Dismissed No Surprises Act Case and Connecticut's Physician Billing Crisis Mean for Your Radiology and Specialist Bills.
The Medicare Advantage Trade-Off
The obvious counter to rising Medigap premiums is Medicare Advantage, where $0-premium plans are widely available. But MA plans come with networks, prior authorization gates, and their own cost-sharing — typically copays and coinsurance that can rival original Medicare gaps in a high-utilization year.
Based on Privenox's ACA marketplace premiums dataset (3,060 rows from CMS public use files), benchmark plan availability and design vary significantly by county. Medicare Advantage follows the same geography. A $0-premium plan in a large metro may be structurally different from what exists in a rural county — with narrower networks and more authorization friction on specialist procedures.
If you're considering the switch, look at your specific county's MA options and model a moderate-care year before assuming $0 premium means $0 out-of-pocket risk.
Five Things to Do Before Your Next Procedure (Regardless of Coverage)
1. Get the CPT code before you book. Every procedure has a billing code. Take it and compare what Medicare allows at your local HOPD versus the nearest ASC. The difference is often 40-50% of the allowed amount — which is 40-50% of your coinsurance.
2. Ask whether the facility accepts Medicare assignment. If a provider doesn't accept assignment, they can charge up to 15% above the Medicare allowed amount (the "limiting charge"). This is separate from your coinsurance.
3. Confirm who bills separately. The facility, your surgeon, and the anesthesiologist often bill as independent entities. Each one triggers its own coinsurance calculation.
4. Track your Part B deductible status. Once you've paid your $257 annual deductible, subsequent claims only cost you 20% coinsurance. If it's January and your deductible isn't met yet, your first procedure of the year is more expensive than you might expect.
5. Run the annual math before dropping Medigap. A premium that feels expensive looks different when one outpatient surgery produces a $960 bill and your physician group files in small claims court eight months later.
The system is designed to make this analysis invisible until after you've already scheduled. The facility fee difference between a hospital HOPD and an ASC isn't disclosed on the physician's referral. The 20% coinsurance isn't calculated until after the claim is processed. Your EOB arrives weeks later with numbers nobody explained to you upfront.
For the full cost comparison on common Medicare procedures by facility type — and what Medigap actually saves you at different levels of healthcare use — Medigap Plan G Costs $2,760/Year — But Without It, a Single Colonoscopy or Knee MRI Can Cost $440 Out-of-Pocket on Medicare in 2026 has the complete model.
The most important step you can take is checking what procedures cost at your local facilities before you agree to a scheduling location. Privenox pulls that data so you can make the call with actual numbers — not guesses.
Sources
- Readers Chime In on Reproductive Rights, Therapy Chatbots, Medical Debt, and More — KFF Health News
- Readers Chime In on Reproductive Rights, Therapy Chatbots, Medical Debt, and More — KFF Health News
- In Connecticut, Doctors and Dentists Are More Likely Than Hospitals To Sue Patients — KFF Health News
- In Connecticut, Doctors and Dentists Are More Likely Than Hospitals To Sue Patients — KFF Health News
- Medigap Premiums Leap, and Consumers Have Few Alternatives — KFF Health News