Medicare Supplement (Medigap) Policies

Filling the Gaps in Original Medicare

Medicare Supplement (Medigap) policies are sold by private insurers to cover the deductibles, copayments, and coinsurance that Original Medicare leaves to the beneficiary — most notably the open-ended Part B 20% coinsurance. Medigap works only with Original Medicare; it does not coordinate with a Medicare Advantage (Part C) plan. In fact, it is illegal for an insurer to knowingly sell a Medigap policy to someone enrolled in Medicare Advantage.

Medigap plans are standardized by federal law and labeled with letters (Plan A through Plan N). Every insurer's "Plan G" provides exactly the same benefits as any other insurer's Plan G — so consumers compare on price and service, not on coverage.

Standardization and Core Benefits

Because benefits are standardized, the exam focuses on the rules rather than memorizing each plan letter. Key points:

• Plan A contains the core/basic benefits that all standardized plans must include.
• Plans C and F (which covered the Part B deductible) are no longer available to newly eligible beneficiaries on or after January 1, 2020; those who were already eligible may keep them.
• A Medigap policy covers one person only — there are no family or joint Medigap policies.

Why Standardization Matters on the Exam

Before standardization, dozens of confusing Medigap designs made comparison shopping nearly impossible and invited abusive sales practices. Federal law (NAIC model adopted nationwide) forced insurers into the lettered framework so that the only legitimate variables are price, the insurer's financial strength, and service quality.

This is why an exam answer that says benefits "vary by company" for the same plan letter is always wrong. A producer who implies a particular insurer's Plan G is "better coverage" than a competitor's Plan G is misrepresenting a standardized product — a prohibited unfair trade practice. The honest pitch is price stability, rating method (issue-age, attained-age, or community rating), and claims service.

Rating Methods (frequently tested)

How an insurer sets and raises Medigap premiums affects long-term cost:

• Issue-age rated: premium is based on the age at purchase and does not rise simply because the insured grows older (though it can rise for inflation/claims).
• Attained-age rated: premium is based on the insured's current age and increases as they age — cheapest early, most expensive late.
• Community rated (no-age rated): everyone pays the same premium regardless of age.

Trap: attained-age policies often look cheapest at age 65 but become the most expensive over time, so the lowest initial premium is not necessarily the best value.

Open Enrollment and Guaranteed Issue

The Medigap Open Enrollment Period is a one-time 6-month window that begins on the first day of the month the beneficiary is both age 65 or older and enrolled in Part B. During this period:

• The insurer must sell any Medigap policy it offers on a guaranteed-issue basis.
• It cannot medically underwrite, deny coverage, or charge more for health reasons.
• Pre-existing conditions: an insurer may impose at most a 6-month waiting period, reduced by months of prior creditable coverage.

Outside this window (or after a guaranteed-issue right ends), insurers may underwrite and decline applicants. Trap: the open-enrollment clock starts at the later of turning 65 or enrolling in Part B — there is no way to restart or extend it.

Consumer Protections and Replacement Rules

Federal law layers strong producer-conduct rules onto Medigap sales:

• A 30-day free-look period applies to Medigap policies.
• Producers must deliver the "Choosing a Medigap Policy" guide.
• It is illegal to sell a beneficiary a duplicate policy — selling a second Medigap when one is already in force, or a policy duplicating benefits the applicant already has.
• High-pressure tactics, twisting, and misrepresentation are prohibited and carry penalties.

When replacing an existing Medigap policy, the producer must furnish a replacement notice the applicant signs, and the new policy must waive any time periods already satisfied under the old policy for benefits of similar coverage — so the insured is not penalized twice for the same pre-existing condition.

Standardized Plans and the Open Enrollment Guarantee

Medigap (Medicare Supplement) policies are sold by private insurers and are federally standardized into lettered plans (A, B, C, D, F, G, K, L, M, N), so Plan G from one insurer covers the same benefits as Plan G from any other — they compete only on price and service. Plans C and F (which covered the Part B deductible) are no longer available to those newly eligible after January 1, 2020; Plan G is now the most comprehensive option for new enrollees.

The strongest consumer protection is the 6-month Medigap Open Enrollment Period beginning when the applicant is age 65 AND enrolled in Part B. During this window coverage is guaranteed issue — no medical underwriting, no pre-existing exclusion beyond a limited look-back — regardless of health. Apply outside this window and the insurer may medically underwrite and decline.

Medigap Rules and Worked Cost Example

Federal rules require that Medigap policies be guaranteed renewable, carry a 30-day free look, and forbid selling a Medigap policy to someone on Medicare Advantage (it would duplicate coverage). Producers must follow strict suitability and replacement rules and may not sell more than one Medigap policy to the same person.

Worked cost example: An insured on Original Medicare incurs $5,000 in Part B-approved charges after meeting the Part B deductible. Medicare pays 80% = $4,000; the insured owes 20% = $1,000 coinsurance with no cap. A Plan G Medigap policy pays that $1,000 coinsurance, leaving the insured responsible only for the annual Part B deductible. This is why Medigap exists — Part B has no out-of-pocket maximum.