13.2 Medicare Supplement (Medigap) Policies

Purpose of Medigap

Medicare Supplement (Medigap) policies are sold by private insurers to fill the "gaps" left by Original Medicare (Parts A and B) — chiefly the deductibles, the 20% Part B coinsurance, and hospital coinsurance with no out-of-pocket cap. Medigap is not a stand-alone health plan and is not Medicare Advantage. A person enrolled in a Medicare Advantage (Part C) plan cannot be sold a Medigap policy — it is illegal to sell Medigap to someone who already has Part C, a frequently tested compliance trap.

Medigap plans are federally standardized and identified by letters (Plan A through Plan N). Within a given lettered plan, benefits are identical across all insurers by law; only price and service differ. This standardization is the single most-tested Medigap concept.

Standardized Plans and Core Benefits

Every standardized Medigap plan must include the core (basic) benefits, most importantly Part A hospital coinsurance plus 365 additional lifetime hospital days and Part B coinsurance. Higher-letter plans add coverage for deductibles, skilled-nursing coinsurance, and foreign-travel emergencies.

Trap: Plans C and F are no longer available to people newly eligible for Medicare on or after January 1, 2020, because they covered the Part B deductible. Beneficiaries eligible before that date may keep them.

Open Enrollment and Guaranteed Issue

The Medigap Open Enrollment Period is a one-time, 6-month window that begins the first month the person is both age 65 or older AND enrolled in Part B. During this window the insurer must use guaranteed issue — it cannot medically underwrite, deny coverage, or charge more for health status. Pre-existing conditions may be excluded for up to 6 months unless prior creditable coverage reduces it.

Other tested consumer protections:

• Free-look period: at least 30 days to return a Medigap policy for a full refund.
• Replacement: an insurer/producer must furnish a notice and a comparison; stacking two Medigap policies is prohibited.
• Outline of Coverage must be delivered at or before application/delivery.

What Medigap Does NOT Cover

Medigap is designed for Original Medicare gaps only. It generally does not cover:

• Long-term/custodial care (use LTC insurance)
• Vision, dental, hearing aids (unless via separate coverage)
• Prescription drugs — modern Medigap policies cannot include drug coverage; beneficiaries buy a separate Part D plan.
• Private-duty nursing

Worked scenario: A beneficiary has Original Medicare and a $3,000 Part B-approved outpatient bill. After meeting the Part B deductible, Medicare pays 80% ($2,400) and the 20% coinsurance ($600) remains. A Medigap plan covering Part B coinsurance pays that $600, leaving the beneficiary owing $0 of the coinsurance.

Standardized Plans and the Open-Enrollment Guarantee

Medigap policies are federally standardized into lettered plans (A through N, with several letters retired), so a Plan G from one insurer covers exactly the same gaps as a Plan G from another, and competition is on price and service rather than benefits. All plans cover the core Part A coinsurance and hospital costs; richer letters add the Part A deductible, skilled-nursing coinsurance, and foreign-travel emergency coverage. A key tested rule from 2020 forward is that newly eligible beneficiaries can no longer buy plans that cover the Part B deductible (formerly Plans C and F), pushing them toward Plan G or Plan N.

The enrollment guarantee is the most tested Medigap consumer protection. During the six-month Medigap Open Enrollment Period, which begins when the beneficiary is 65 and enrolled in Part B, insurers must sell any plan they offer on a guaranteed-issue basis, cannot medically underwrite, and cannot charge more for health reasons. Apply outside that window without a guaranteed-issue right and the insurer may underwrite and decline or surcharge.

Work a scenario: a healthy 66-year-old who delayed because she kept employer coverage and now retires has a guaranteed-issue right tied to losing that coverage, but a 70-year-old who simply changes his mind has no such right and faces underwriting. Remember the boundaries: Medigap supplements Original Medicare only, never works alongside a Medicare Advantage plan, and never covers long-term custodial care, which is the gap long-term care insurance and Medicaid address.

What Each Standardized Plan Covers and Suitability Rules

Knowing the relative richness of the lettered plans answers the comparison questions. Every Medigap plan covers the core Part A hospital coinsurance and an extra 365 lifetime hospital days, and most cover the Part B 20% coinsurance, the first three pints of blood, and hospice coinsurance. Richer letters add the Part A deductible, skilled-nursing-facility coinsurance, and foreign-travel emergency coverage, while the leanest cover only the core.

Plan G has become the most comprehensive plan available to newly eligible beneficiaries, since plans covering the Part B deductible are closed to those who became eligible in 2020 or later, and Plan N trades a slightly lower premium for small copays. Suitability rules forbid a producer from selling a beneficiary a second Medigap policy that duplicates existing coverage, from selling Medigap to someone enrolled in Medicare Advantage, and from using high-pressure tactics.

A producer must also confirm the applicant is in the open-enrollment or a guaranteed-issue window before assuming no underwriting applies, because outside those windows the insurer may medically underwrite and decline.