13.2 Medicare Supplement (Medigap) Policies

What Medigap Does

Medicare Supplement insurance — "Medigap" — is sold by private insurers to pay the deductibles, coinsurance, and copayments that Original Medicare (Parts A and B) leaves to the beneficiary. Because Part B imposes unlimited 20% coinsurance, Medigap exists primarily to close that gap. Medigap supplements Original Medicare only; it does not work with Medicare Advantage (Part C), and it is illegal to sell a Medigap policy to someone enrolled in a Part C plan.

Standardized Plans

Federal law standardizes Medigap into lettered plans (A, B, C, D, F, G, K, L, M, N), each defining a fixed package of benefits. Plan A is the core benefit set every insurer offering Medigap must make available. Because plans are standardized, a Plan G from one carrier covers exactly the same benefits as a Plan G from another — only price and service differ.

Important rule: Plans C and F (which cover the Part B deductible) are no longer available to people newly eligible for Medicare on or after January 1, 2020. Those already enrolled may keep them.

Comparing common plans

Worked example: A beneficiary incurs $10,000 in Part B-approved charges. Original Medicare pays 80% ($8,000); the 20% coinsurance is $2,000. A Plan G policy pays that $2,000 coinsurance, leaving the beneficiary only the annual Part B deductible to satisfy.

The Open Enrollment Period and Guaranteed Issue

The Medigap Open Enrollment Period is a one-time 6-month window that begins the month a beneficiary is both age 65 or older AND enrolled in Part B. During this window the insurer must use guaranteed issue: it cannot deny coverage, charge more, or impose a waiting period based on health. Outside this window, insurers may medically underwrite applicants (except in certain guaranteed-issue "trial right" situations). This is a heavily tested concept — the protection is tied to enrolling during that 6-month window.

How Medigap premiums are rated

Candidates should distinguish the three pricing methods carriers use. Community-rated (no-age-rated) charges every policyholder the same premium regardless of age. Issue-age-rated bases the premium on the age at purchase and does not rise with age thereafter. Attained-age-rated starts lower but increases as the insured grows older. An attained-age policy can look cheaper at 65 yet become the most expensive over time — a common suitability discussion point and a likely exam distractor.

Trial rights and free-look

"Trial right" guaranteed-issue situations protect a beneficiary who tries Medicare Advantage and wants to return to Original Medicare with Medigap — for example, dropping a first-time Advantage plan within 12 months. Every Medigap policy also carries a 30-day free-look period: the applicant may return the policy for a full premium refund. These consumer safeguards, together with the mandatory delivery of the official Medicare guide, reflect Medigap's tightly regulated, replacement-sensitive nature.

Required Provisions and Marketing Rules

Medigap policies must be guaranteed renewable — the insurer cannot cancel except for nonpayment or material misrepresentation. Replacement of one Medigap policy with another requires a 30-day free-look period and disclosure. Pre-existing conditions may be excluded for up to 6 months, but prior creditable coverage reduces that look-back. Producers must deliver the "Guide to Health Insurance for People with Medicare," and it is an unfair trade practice to sell duplicate Medigap coverage to a person who already has one.

Putting the rules together

The exam tends to bundle Medigap facts into a single fact pattern, so anchor on these non-negotiables: Medigap works only with Original Medicare; the standardized lettered plans are identical benefit-for-benefit across carriers; the 6-month Open Enrollment Period (age 65 + Part B) is the only guaranteed-issue window most people get; Plans C and F are closed to those newly eligible in 2020 or later; and every policy is guaranteed renewable with a 30-day free-look.

When a question describes a healthy 67-year-old who delayed Part B and now wants Medigap outside any trial right, the correct answer is that the carrier may medically underwrite and could decline the applicant — the open-enrollment protection has lapsed.

A standardized-benefits table to memorize

Plan G has become the most popular choice for new enrollees precisely because Plan F closed to the 2020 cohort; G mirrors F except it leaves the modest Part B deductible to the insured. Plans K and L are the cost-sharing designs that trade lower premiums for partial benefits offset by an annual out-of-pocket maximum — a feature no other lettered plan offers.

Suitability and replacement cautions

Because Medigap premiums can be community-rated, issue-age-rated, or attained-age-rated, a producer must illustrate the long-run cost, not just the entry premium, when recommending a plan to a 65-year-old who will likely hold it for decades. Replacing an existing Medigap policy restarts the 30-day free-look and triggers a fresh disclosure requirement, and selling a second, duplicative Medigap policy is an explicit unfair trade practice. The producer must also confirm the applicant is enrolled in both Part A and Part B before a Medigap sale, since the supplement exists to fill Original Medicare's gaps and cannot stand alone.