13.2 Medicare Supplement (Medigap) Policies

Medicare Supplement insurance, commonly called Medigap, is private coverage that pays the out-of-pocket costs Original Medicare leaves behind: deductibles, copayments, and coinsurance. To buy a Medigap policy, the applicant must be enrolled in both Part A and Part B. Medigap works only alongside Original Medicare; a person enrolled in a Medicare Advantage (Part C) plan generally cannot use a Medigap policy.

Standardization

Federal law standardizes Medigap into lettered plans (Plan A, B, C, D, F, G, K, L, M, N, etc.). The benefits inside a given letter are identical no matter which insurer sells it; only price and service differ. This lets consumers compare on premium alone.

Trap: Plans C and F (which covered the Part B deductible) are no longer available to people newly eligible for Medicare on or after January 1, 2020. Those already eligible before that date may keep or buy them.

What Medigap Pays

What Medigap Never Covers

• Long-term/custodial care
• Routine dental, vision, and hearing aids
• Private-duty nursing
• Prescription drugs (must buy a separate Part D plan)

Because Medigap pays as a secondary payer, if Medicare does not approve a charge, Medigap pays nothing toward it.

Open Enrollment and Guaranteed Issue

The Medigap Open Enrollment Period is a one-time, 6-month window that starts the first month the applicant is both age 65 or older AND enrolled in Part B. During this window the insurer must issue a policy regardless of health and cannot charge more for pre-existing conditions (though a limited pre-existing condition waiting period may apply if the person lacked prior creditable coverage).

Guaranteed-issue rights also arise in specific situations, such as when a Medicare Advantage plan leaves the service area or when an employer retiree plan ends. Outside these protected windows, insurers may use medical underwriting and decline or surcharge applicants.

Consumer Protections

• A minimum 30-day free-look period to return the policy for a full refund.
• A prohibition on selling a beneficiary a duplicate Medigap policy.
• Required disclosure of the plan letter and a buyer's guide at solicitation.

Renewability and Replacement

Medigap policies are guaranteed renewable: the insurer cannot cancel coverage or refuse to renew because of the insured's health, only for nonpayment of premium or material misrepresentation. Premiums may still rise on a class basis. Three common rating methods affect how premiums change with age:

When replacing one Medigap policy with another, the agent must provide a replacement notice and may not impose a new pre-existing condition waiting period for benefits the prior policy already covered. Stacking or selling a second duplicative Medigap policy is prohibited.

Coordination With Other Coverage

Because Medigap pays as secondary to Original Medicare, claims flow in a fixed order: Medicare adjudicates first and pays its approved share, then the Medigap policy automatically pays its portion of the remaining deductible/coinsurance, often through electronic crossover so the insured files nothing.

Worked example: Suppose a Part B-approved outpatient charge is $1,000 and the annual Part B deductible is already met. Medicare pays 80% ($800), leaving $200 of coinsurance. A Plan G Medigap policy (which covers the Part B 20% coinsurance) pays the full $200, leaving the insured with $0 for that service. Had the insured held only Original Medicare, the $200 would be out of pocket with no annual cap. This dollar-filling behavior is exactly why Medigap is sold as gap protection rather than as standalone insurance.

Standardized Medigap Plans and Enrollment

Medicare Supplement (Medigap) policies are sold by private insurers to fill Original Medicare's gaps (the Part A deductible, Part B 20% coinsurance, etc.). They are standardized into lettered plans (A, B, C, D, F, G, K, L, M, N) so benefits are identical across carriers — only price and service differ.

Medigap does not work with Medicare Advantage — you cannot use a Medigap policy to pay Advantage cost-sharing, and selling one to an Advantage enrollee who is not disenrolling is a prohibited practice. Worked logic: a 67-year-old who enrolled in Part B at 65 and applies for Medigap nine months later has missed the guaranteed-issue window and may be medically underwritten or declined. Plans K and L use cost-sharing percentages with an out-of-pocket cap. Because benefits are standardized, agents must compare on price and the carrier's rating method (issue-age, attained-age, or community rated).