13.2 Medicare Supplement (Medigap) Policies

Medicare Supplement insurance — commonly called Medigap — is sold by private insurers to fill the "gaps" in Original Medicare: deductibles, coinsurance, and copayments. Medigap works only alongside Original Medicare (Parts A and B); it does not coordinate with Medicare Advantage (Part C). It is illegal to sell a Medigap policy to someone enrolled in a Medicare Advantage plan unless they are disenrolling.

Medigap plans are standardized by federal law and labeled with letters (A, B, C, D, F, G, K, L, M, N). Every Plan G sold by any insurer offers identical core benefits — insurers compete on price and service, not coverage design. This standardization is a favorite exam topic.

How Medigap Fills the Gaps

Open Enrollment and Guaranteed Issue

The Medigap Open Enrollment Period is the single most tested provision. It is a 6-month window that begins the first month a person is both age 65 or older AND enrolled in Part B. During this window the insurer must issue any Medigap policy it sells on a guaranteed-issue basis — no medical underwriting, no health questions, and no rate-up for pre-existing conditions.

Key Rules

• Pre-existing condition exclusion: An insurer may impose a waiting period of up to 6 months for conditions treated within the 6 months before coverage starts, unless the applicant had prior creditable coverage.
• Outside open enrollment, insurers may medically underwrite and decline applicants (except in specific guaranteed-issue situations such as losing employer coverage).
• 30-day free look: Every Medigap policy must include a 30-day free-look period for a full refund.

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

Guaranteed-Issue Situations, Medigap vs. Medicare Advantage, and Replacement Rules

Outside the one-time 6-month open-enrollment window, several guaranteed-issue ("Medigap protection") situations still force an insurer to issue without underwriting. The most tested: the beneficiary's employer retiree plan ends, a Medicare Advantage plan leaves the service area or the member moves out of it, or the member tried Medicare Advantage for the first time and disenrolls within 12 months (the "trial right"). In these cases the applicant generally has 63 days from the loss of coverage to buy guaranteed-issue.

Medigap and Medicare Advantage are mutually exclusive

A consumer cannot meaningfully use Medigap while enrolled in Medicare Advantage, and selling Medigap to an MA enrollee who is not disenrolling is a prohibited practice. Medigap supplements Original Medicare only.

Replacement and suitability points

Worked guaranteed-issue scenario: A 70-year-old enrolls in a Medicare Advantage HMO at 65, then disenrolls 9 months later under the 12-month trial right. Because the disenrollment is within the trial window, the insurer must issue a Medigap policy on a guaranteed-issue basis with no health questions, provided the application is made within 63 days. After the 12-month trial expires, the same applicant would face medical underwriting outside any other protected situation.

Standardized Plan Highlights

• Plan A: Basic core benefits only (Part A coinsurance, Part B coinsurance, first three pints of blood).
• Plan G: Most comprehensive plan available to new enrollees; covers everything except the Part B deductible.
• Plan N: Covers Part B coinsurance but charges small copays (up to $20 office, $50 ER) and does not cover Part B excess charges.
• Plans K and L: Cost-sharing plans with annual out-of-pocket limits (K = 50% cost-share, L = 75%).

Excess Charges

Providers who do not accept Medicare assignment may charge up to 15% above the approved amount (the "limiting charge"). Only Plans F and G cover these Part B excess charges. Medigap policies are individual — each spouse must buy a separate policy.

Renewability and Coordination Rules

All standardized Medigap policies are guaranteed renewable: the insurer cannot cancel the policy as long as premiums are paid and cannot single out a policyholder for a rate increase based on declining health. Premiums may still rise for an entire class of insureds.

Medigap policies pay after Medicare. When a beneficiary incurs a covered Part A or Part B expense, Medicare pays first, then the Medigap policy pays its share of the remaining deductible or coinsurance. Medigap does not cover services Medicare excludes entirely — such as routine dental, hearing aids, eyeglasses, or long-term custodial care — so it is not a substitute for a long-term care policy.

Rating Methods

Insurers price Medigap using one of three methods, and producers must explain the difference because premiums can diverge sharply over time:

• Issue-age rated: premium based on age at purchase; does not increase simply because the insured grows older.
• Attained-age rated: premium based on current age; rises each year as the insured ages, often the cheapest initially but most expensive long term.
• Community rated (no-age-rated): same premium for all policyholders regardless of age.

Trap: A producer who replaces an existing Medigap policy must complete a replacement notice and cannot stack a second Medigap policy on a client who already owns one — selling duplicate coverage is an unfair trade practice.