13.2 Medicare Supplement (Medigap) Policies

Medicare Supplement (Medigap) Policies

Medicare Supplement insurance - commonly called Medigap - is private coverage that pays the deductibles, coinsurance, and copayments that Original Medicare leaves to the beneficiary. Medigap only works alongside Original Medicare (Parts A and B); it does not coordinate with Medicare Advantage. In fact, it is illegal for an agent 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: Plan A, B, C, D, F, G, K, L, M, and N. Every insurer's Plan G, for example, must offer identical core benefits, so consumers compare on price and service rather than benefit design. Plans C and F (which covered the Part B deductible) are closed to people newly eligible on or after January 1, 2020; those eligible before that date may still buy them.

The Open Enrollment Period

The single most-tested Medigap rule is the 6-month Medigap Open Enrollment Period (OEP). It 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 plan it sells with guaranteed issue - no medical underwriting, no rate-up, and no exclusion for pre-existing conditions beyond a limited look-back. Outside this window, insurers may underwrite and decline.

What Medigap covers vs. excludes

A Medigap policy covers only ONE person; a married couple needs two separate policies. Standardized plans guarantee renewable - the insurer cannot cancel as long as premiums are paid and no material misrepresentation occurred.

Pre-existing conditions and look-back

During guaranteed-issue periods, an insurer may impose at most a 6-month pre-existing condition waiting period, and only for conditions treated or diagnosed within 6 months before the policy's effective date. Prior creditable coverage reduces this waiting period day-for-day. A free-look period of at least 30 days lets the buyer return the policy for a full refund.

Rating methods (worked comparison)

Medigap premiums are priced three ways, and the exam tests the long-run cost difference:

• Issue-age rated: premium is based on your age when you buy; it does not increase merely because you grow older. Example - buy at 65, the base never rises with age.
• Attained-age rated: premium starts low but rises as you age. Cheapest early, most expensive over time.
• Community (no-age) rated: everyone in the area pays the same regardless of age.

Worked trap: Two applicants both want lifetime value. An attained-age plan may quote $130/month at 65 versus an issue-age plan at $160. By age 80 the attained-age plan can exceed $300, while the issue-age plan stays near $160 plus inflation. The lowest opening quote is not the lowest lifetime cost.

Common traps

• Medigap pairs with Original Medicare ONLY - never with Medicare Advantage.
• Plans C and F are closed to those newly eligible on/after 1/1/2020.
• Medigap covers ONE person; no family policies.
• It does NOT include drugs (Part D), dental, vision, or long-term care.

Open Enrollment, Guaranteed Issue, and Switching

The Medigap Open Enrollment Period is the single best-tested timing rule: it is a 6-month window that begins the month the beneficiary is age 65 AND enrolled in Part B. During it, insurers must sell any Medigap plan on a guaranteed-issue basis at the best rate, ignoring health. Miss this window and, outside limited guaranteed-issue situations, the insurer may medically underwrite and decline or surcharge the applicant.

Standardized Plan Lettering

Medigap plans are standardized by letter (A, B, C, D, F, G, K, L, M, N) so that Plan G from any insurer offers identical benefits - only price and service differ. Plan A is the core benefit set every insurer must offer.

Worked trap: a healthy 70-year-old who delayed Part B for three years and now enrolls is generally past the guaranteed-issue Medigap window, so the carrier may underwrite. Compare this to the 65-year-old just enrolling in Part B, who has full guaranteed-issue rights regardless of conditions.

Core Benefits, the Part A Coinsurance, and What Medigap Excludes

Every standardized Medigap plan (A through N) must cover a set of core benefits, including Part A hospital coinsurance plus coverage for an additional 365 days after Medicare benefits end, and Part B coinsurance/copayment. Higher-lettered plans add the Part A deductible, skilled-nursing coinsurance, and foreign-travel emergency benefits.

Worked trap: Medigap supplements Original Medicare only - it pays the gaps (deductibles, coinsurance), it does not add prescription-drug coverage (that is Part D) and does not pair with Medicare Advantage. It also excludes dental, vision, hearing, and long-term custodial care.