3.2 North Carolina Medicare Supplement (Medigap) Regulations

Medigap Basics

Medicare Supplement (Medigap) insurance fills the "gaps" in Original Medicare — the Part A deductible and hospital coinsurance, the Part B 20% coinsurance, and similar out-of-pocket amounts. A Medigap policy is secondary to Medicare and pays only after Medicare pays. It works only with Original Medicare, never with a Medicare Advantage (Part C) plan; selling Medigap to someone enrolled in Advantage (except during a valid disenrollment) is prohibited.

The 6-Month Open Enrollment Period

The Medigap open enrollment period is a one-time 6-month window that begins on the first day of the month in which the applicant is both age 65 or older AND enrolled in Medicare Part B. During this window the insurer must:

• Guarantee issue any Medigap plan it sells — no health questions that can cause a decline.
• Charge the standard rate regardless of health.
• Waive any pre-existing condition waiting period (subject to creditable-coverage credit for prior coverage).

Exam trap: the trigger is Part B enrollment plus age 65 — not Part A, not retirement, not age 62. A beneficiary who delays Part B has not yet started the clock.

Guaranteed-Issue (Medigap Protection) Rights

Outside open enrollment, North Carolina honors the federal guaranteed-issue events. The applicant generally has 63 days from the loss of prior coverage to buy specified Medigap plans without underwriting:

12-Month Trial Right

Two trial-right scenarios let a beneficiary "test" Medicare Advantage and back out:

• First-time MA enrollee at 65: if they drop MA within 12 months, they may buy any Medigap plan, guaranteed issue.
• Dropped Medigap to try MA: within 12 months they may return to the same Medigap policy (or, if unavailable, Plan A, B, D, G, K, or L) from any insurer.

No Birthday Rule

Unlike California, Oregon, or Washington, North Carolina has no Birthday Rule — there is no annual window to switch Medigap plans of equal or lesser benefits without underwriting. Outside open enrollment or a guaranteed-issue event, NC insurers may medically underwrite, decline, or rate up an applicant.

Standardized Plan Letters

Medigap benefits are standardized by letter under federal rules NC has adopted: a Plan G from any company carries the identical benefit package as a Plan G from any other company — only price, service, and financial strength differ. This is the single most testable Medigap concept: standardization makes the letter, not the carrier, define the coverage.

The 2020 rule: Plans C and F (the two that pay the Part B deductible) are closed to anyone first eligible for Medicare on or after January 1, 2020. Those already eligible before that date may keep or still buy them. New 2020+ enrollees typically choose Plan G or Plan N.

Rate-Filing Methods

Medigap premiums in North Carolina may be priced by one of three methods, and insurers must file rates with NCDOI:

Worked example: Two 65-year-olds buy identical Plan G. One picks an attained-age policy at $130/month; by age 80 it may exceed $250. The other picks an issue-age policy at $150/month that never climbs because of age. The attained-age buyer wins early and loses late — a classic suitability discussion a producer must document.

Pre-Existing Conditions Outside Open Enrollment

When a beneficiary applies after open enrollment and without a guaranteed-issue right, a Medigap insurer may impose a pre-existing condition waiting period of up to 6 months, reduced by months of prior creditable coverage. Inside open enrollment, no such waiting period applies.

Medigap Marketing and Replacement Rules

North Carolina enforces strict producer conduct rules on Medigap sales:

• A producer must deliver the Guide to Health Insurance for People with Medicare and an outline of coverage at or before application.
• Excessive policies — it is an unfair practice to sell a beneficiary a second Medigap policy that duplicates coverage; one Medigap policy per person is the rule.
• Replacement requires a signed replacement notice and a statement that the existing policy will be cancelled only after the new one is in force, preventing a coverage gap.
• High-deductible versions of Plan F and Plan G exist; the insured pays a set deductible before the plan pays, lowering premium.

Suitability example: A producer who replaces a healthy 70-year-old's Plan G with another Plan G solely to earn a new first-year commission, with no benefit improvement, commits churning — an unfair trade practice subject to NCDOI penalties. Replacement must benefit the consumer, and the producer must document the reason.

Exam trap: Medigap is medically underwritten outside open enrollment and guaranteed-issue events; do not assume guaranteed issue applies all year as it does in the ACA individual market.