13.2 Medicare Supplement (Medigap) Policies

What Medigap does

A Medicare Supplement (Medigap) policy is private insurance designed to pay the deductibles, coinsurance, and copayments that Original Medicare leaves to the beneficiary. It solves the open-ended 20% Part B coinsurance problem from Section 13.1 by absorbing those gaps. Medigap supplements Original Medicare only — a person cannot use a Medigap policy with a Medicare Advantage (Part C) plan, and it is illegal for an insurer to knowingly sell Medigap to an MA enrollee.

Medigap pays after Medicare. It does not cover long-term custodial care, vision, dental, hearing aids, or private-duty nursing, and modern plans do not include prescription drug coverage (that is Part D).

Standardization

Federal law (OBRA 1990) requires Medigap to be sold as standardized lettered plans: A, B, C, D, F, G, K, L, M, and N. Benefits for a given letter are identical no matter which insurer sells it — only the price and service differ. This is why exam questions stress comparing premium and company strength, not benefit differences, between two insurers offering the same letter.

Trap: Plans C and F cover the Part B deductible and are therefore no longer available to anyone first eligible for Medicare on or after January 1, 2020. People already enrolled may keep them.

Open enrollment and guaranteed issue

The Medigap Open Enrollment Period (OEP) is a one-time 6-month window that begins on the first day of the month the insured is both age 65 or older and enrolled in Part B. During this window the insured has guaranteed-issue rights: the insurer cannot use medical underwriting, deny coverage, or charge more because of health. After this window, an applicant may face underwriting unless a separate guaranteed-issue right applies (for example, loss of employer coverage).

Required consumer protections

• Free-look period: at least 30 days to review the policy and return it for a full refund.
• Replacement rules: producers must deliver a 'Guide to Health Insurance for People with Medicare' and a replacement notice; duplicate Medigap sales are prohibited.
• Pre-existing condition limitation: can be excluded for up to 6 months, but creditable prior coverage reduces or eliminates this look-back.
• Guaranteed renewable: Medigap policies must be guaranteed renewable; the insurer cannot cancel for health changes, only for nonpayment or material misrepresentation.

How Medigap fills a gap — worked example

A beneficiary has Plan G and incurs the $400 Part B coinsurance from Section 13.1's example. Plan G pays the 20% coinsurance in full, so the beneficiary's only remaining cost for the year is the Part B deductible (which Plan G does not cover). Compare this to Original Medicare alone, where the same charge keeps adding up with no cap. That contrast is the heart of Medigap exam questions.

Pricing methods and disclosure

Medigap premiums are not standardized even though benefits are. Insurers use one of three rating methods, and the exam tests the difference:

• Issue-age rated (entry-age): premium is based on the age when the policy is purchased and does not rise simply because the insured grows older.
• Attained-age rated: premium is based on the insured's current age and increases as the insured ages, so it often starts cheap but climbs.
• Community rated (no-age-rated): everyone in the area pays the same base premium regardless of age.

All three can still rise for inflation and overall claims experience. The trap is assuming attained-age is 'cheapest' — it is cheapest only at the start, and over time an attained-age policy commonly becomes the most expensive because its premium climbs with the insured's age while an issue-age premium stays anchored to the purchase age.

Suitability and prohibited sales

Producers face specific Medigap conduct rules. It is illegal to sell a beneficiary a duplicate Medigap policy, to sell Medigap to someone enrolled in Medicaid (with limited exceptions) or Medicare Advantage, or to use high-pressure tactics. Producers must complete a needs/suitability review and deliver the official disclosure materials. Twisting (misrepresenting facts to induce a replacement) and churning (replacing a policy for commission without benefit to the client) are explicitly prohibited.

Guaranteed-issue events outside open enrollment

Even after the one-time 6-month OEP closes, certain guaranteed-issue (trial-right) events let an insured buy Medigap without underwriting: losing employer or union coverage that supplemented Medicare, a Medicare Advantage plan leaving the service area, or the insured exercising a 12-month trial right to drop a first-time Medicare Advantage plan and return to Original Medicare.

Recognizing these events is a frequent question because they reopen guaranteed coverage that the applicant otherwise lost. Outside both the OEP and a guaranteed-issue event, the insurer may underwrite, decline, or surcharge based on health, and may apply a pre-existing condition look-back. The practical takeaway for producers: enroll clients during the initial OEP whenever possible, and treat the trial-right events as the only reliable second chance at guaranteed coverage.