16.3 Medicare Supplement (Medigap) Standardized Plans and Enrollment
Key Takeaways
- Medigap pays the gaps (deductibles, copays, coinsurance) in Original Medicare only and requires enrollment in both Part A and Part B.
- Plans are federally standardized by letter (A-N): identical benefits per letter, so insurers compete on price and service only.
- Plans F and C are closed to people first eligible on or after January 1, 2020; Plan G is the popular replacement, and Medicare SELECT uses a network for lower premiums.
- Premiums use community-rated, issue-age, or attained-age methods; attained-age starts cheap but rises with age. MA, MN, and WI standardize differently.
- The one-time 6-month Medigap Open Enrollment Period (65+ and Part B) bars medical underwriting; outside it, and absent narrow guaranteed-issue events, insurers may underwrite or decline.
Purpose of Medicare Supplement (Medigap)
Medicare Supplement insurance, commonly called Medigap, is private coverage that pays the "gaps" in Original Medicare — the deductibles, copays, and coinsurance the beneficiary would otherwise pay out of pocket. Because Original Medicare has no annual out-of-pocket maximum, a Medigap policy is the primary tool used to make those costs predictable.
Core rules the exam tests:
- To buy Medigap, the applicant must be enrolled in both Part A and Part B.
- Medigap works only with Original Medicare — never with Medicare Advantage.
- A Medigap policy covers only the policyholder (one person per policy); spouses each need their own.
- Medigap does NOT cover long-term care, routine dental/vision/hearing, eyeglasses, or private-duty nursing, and modern Medigap plans do not include prescription drug coverage (that requires Part D).
Standardized Plans A through N
Medigap plans are federally standardized by letter. A plan with a given letter offers identical benefits regardless of which company sells it — so a Plan G from one insurer covers exactly what a Plan G from any other insurer covers. Carriers compete only on price and service, not benefits.
| Plan Letter | Role |
|---|---|
| Plan A | Core/basic benefits only (the benchmark) |
| Plan F | Covers the Part B deductible; closed to those newly eligible on or after 1/1/2020 |
| Plan G | Like F but the insured pays the Part B deductible; most popular for new enrollees |
| Plan N | Lower premium; small copays for some office and ER visits |
| Plans K, L, M | Cost-sharing designs (partial coverage, out-of-pocket limits for K and L) |
Trap: Plan F and Plan C are closed to people first eligible for Medicare on or after January 1, 2020, because they covered the Part B deductible. Someone newly eligible cannot buy a brand-new Plan F. Medicare SELECT is a Medigap policy that uses a provider network in exchange for a lower premium.
Pricing Methods and State Exceptions
Medigap premiums are calculated by one of three rating methods. Recognizing how each behaves with age is a common calculation/scenario question.
| Rating Method | How Premium Behaves |
|---|---|
| Community-rated | Same premium for everyone regardless of age |
| Issue-age-rated | Based on age at purchase; does not rise due to aging |
| Attained-age-rated | Based on current age; rises as the insured gets older |
Worked example: Two buyers purchase the same plan at age 65 for $150/month. Under an attained-age policy, by 80 the premium may climb well above $150 as the insured ages. Under an issue-age policy, the premium stays anchored to the age-65 rate (subject only to general increases), so attained-age policies start cheaper but can become the most expensive over time.
State exception: Massachusetts, Minnesota, and Wisconsin standardize Medigap differently from the federal letter system — a frequently tested exception.
Open Enrollment and Guaranteed Issue
The Medigap Open Enrollment Period (OEP) is a one-time, 6-month window that begins the first month the beneficiary is both age 65 or older AND enrolled in Part B. During this window the insurer must sell any Medigap plan it offers, cannot use medical underwriting, and cannot charge more or deny coverage based on health.
| Right | What It Means |
|---|---|
| Medigap OEP | 6 months from Part B enrollment at 65+; no underwriting |
| Guaranteed issue | Limited triggering events (e.g., losing employer or MA coverage) force acceptance |
| Outside these windows | Insurer may medically underwrite, raise rates, or decline |
Scenario: A 67-year-old who delayed Part B and just enrolled gets a fresh 6-month Medigap OEP with no underwriting. By contrast, a healthy person who waits 18 months after their OEP closes — with no guaranteed-issue trigger — can be underwritten or declined.
Trap: Guaranteed-issue rights are narrow and event-driven; simply changing your mind later does not grant guaranteed issue. Missing the OEP is the costliest Medigap timing mistake.
Replacement, Free Look, and Suitability
Medigap sales carry strong consumer-protection rules an agent must apply. Every Medigap policy includes a 30-day free-look period: the buyer may return the policy within 30 days for a full premium refund, no questions asked.
- Agents must deliver the Guide to Health Insurance for People with Medicare (the official Outline of Coverage) at or before application.
- When replacing an existing Medigap policy, the agent completes a replacement notice and must avoid creating duplicate coverage — selling a beneficiary a second Medigap policy is prohibited.
- An agent must reasonably believe the policy is suitable and that the applicant does not already have coverage that makes the new policy unnecessary.
Scenario: An agent learns the applicant already owns an in-force Medigap plan. The agent must treat the sale as a replacement (not a new add-on), provide the replacement notice, and ensure the old policy is surrendered — stacking two Medigap policies is an illegal duplicate sale.
A client compares Plan G policies from three different insurers. Two of the policies have the same letter but different premiums. What explains the price difference?
When does a beneficiary's one-time Medigap Open Enrollment Period begin, during which insurers cannot use medical underwriting?