13.2 Medicare Supplement (Medigap) Policies

Purpose of Medicare Supplement insurance

Medicare Supplement (Medigap) policies are sold by private insurers to pay the deductibles, coinsurance, and copayments that Original Medicare leaves to the insured — the "gaps." A Medigap policy works only alongside Original Medicare (Parts A and B); it does not work with Medicare Advantage. It is illegal to sell a Medigap policy to someone enrolled in a Medicare Advantage plan.

Medigap plans are standardized by federal law into lettered plans (A, B, C, D, F, G, K, L, M, N). Every insurer's Plan G, for example, must offer the identical core benefits; companies compete only on price and service, not benefit design. Plans C and F (which cover the Part B deductible) are closed to people newly eligible on or after January 1, 2020.

Standardized benefits and the core

All Medigap plans must cover the basic (core) benefits, including Part A coinsurance plus 365 extra hospital days after Medicare ends, and Part B coinsurance/copayment. Higher-lettered plans add deductibles, skilled-nursing coinsurance, and foreign travel emergency coverage.

Medigap covers one person per policy — spouses each need their own.

Open enrollment and guaranteed issue

The Medigap Open Enrollment Period is the 6-month window beginning the first month the person is both age 65 or older AND enrolled in Part B. During this period the insurer must use guaranteed issue — it cannot deny coverage, charge more, or impose a waiting period due to health. This is the single most-tested Medigap fact.

Outside open enrollment, insurers may medically underwrite unless a guaranteed-issue right applies (e.g., losing employer coverage, an MA plan leaving the area). For pre-existing conditions, an insurer may impose up to a 6-month look-back waiting period, but this is waived or shortened if the applicant had prior creditable coverage.

Required protections and replacement

Federal and NAIC model rules give Medigap buyers strong protections:

• A 30-day free-look period to return the policy for a full refund.
• A Guide to Health Insurance for People with Medicare and an Outline of Coverage delivered at or before application.
• Suitability/appropriateness: agents must not sell duplicate coverage; selling a second Medigap policy to someone who already has one is prohibited.
• On replacement, the agent completes a replacement notice, and the new policy must waive any new waiting period to the extent the old policy already satisfied it.

A common trap: Medigap does not cover long-term custodial care, vision, dental, hearing aids, or private-duty nursing.

Renewability, pricing, and marketing rules

Medicare Supplement policies must be guaranteed renewable — the insurer cannot cancel for health changes and must renew as long as premiums are paid; rates change only by class, not for an individual's claims. Medigap is priced three ways, and the exam expects you to recognize them:

• Issue-age rated: premium based on the age at purchase and does not rise with age.
• Attained-age rated: premium based on current age, rising each year.
• Community rated (no-age-rated): everyone pays the same regardless of age.

Federal marketing rules prohibit high-pressure tactics, cold-lead advertising disguised as government mail, and the sale of more than one Medigap policy to the same person. An agent must obtain a signed statement on existing coverage and may face penalties for knowingly selling duplicate or unnecessary coverage. These protections, paired with the standardized lettered benefits, let consumers comparison-shop on price with confidence that benefits are identical across insurers.

Suitability, SELECT plans, and common pitfalls

Medicare SELECT is a type of Medigap that costs less in exchange for using a network of hospitals and providers; out-of-network non-emergency care is not fully covered. Buyers of SELECT must have the right to convert to a standard Medigap plan if they move out of the service area.

When recommending Medigap, the producer must complete a suitability review confirming the applicant is not already adequately covered. Improperly replacing a policy that gives the client fewer benefits, or stacking coverage, can constitute twisting or churning and trigger discipline.

Work through these tested distinctions carefully:

• Medigap pays after Medicare, never instead of it.
• A person on Medicaid generally should not buy Medigap, since Medicaid already covers cost-sharing.
• High-deductible versions of Plans F and G exist; the insured pays a set deductible before the plan begins paying gaps.

Getting these scenarios right separates a passing score from a fail, because the exam loves to pair a vulnerable buyer with an inappropriate sale and ask what the producer should do.

The Two Plans Sold Since 2020 and the Part B Deductible Bar

Since January 1, 2020, newly eligible beneficiaries cannot buy Medigap Plans C and F, because those plans covered the Part B deductible and Congress barred first-dollar Part B coverage for new enrollees. The two most comprehensive plans now available to new enrollees are Plan G (covers everything F did except the Part B deductible) and the lower-premium Plan N.

Six-Month Open Enrollment and Guaranteed Issue

The Medigap open-enrollment period is the six months beginning when the beneficiary is age 65 and enrolled in Part B; during it, insurers must issue any offered plan without medical underwriting. Outside that window, guaranteed-issue rights arise only on specific triggers (losing employer coverage, a Medicare Advantage plan leaving the area). The exam stresses that buying Medigap late, after the open-enrollment window closes, usually exposes the applicant to underwriting and possible denial.