13.2 Medicare Supplement (Medigap) Policies

Medicare Supplement insurance — commonly called Medigap — is sold by private insurers to fill the cost-sharing 'gaps' in Original Medicare (Parts A and B): deductibles, coinsurance, and copayments. Medigap does NOT work with Medicare Advantage; a person may not legally hold both a Medigap policy and a Medicare Advantage plan at the same time.

Medigap plans are federally standardized and labeled by letter (Plans A, B, C, D, F, G, K, L, M, N). Every insurer's 'Plan G' must offer identical benefits — companies compete on price and service, not on coverage. This standardization is a frequent exam point.

What Medigap Does and Does Not Cover

• Covers: Part A and Part B coinsurance/copays, Part A deductible, hospice cost-sharing, and (on most plans) the first 3 pints of blood.
• Does NOT cover: prescription drugs (need Part D), long-term care, dental, vision, hearing aids, or private-duty nursing.

Medigap pays only after Original Medicare pays its share, so it is true supplemental coverage rather than primary insurance. Because the policy follows Medicare's approved amounts, a Medigap insured generally faces little or no surprise cost-sharing for Medicare-covered services. Premiums vary by the insurer's rating method — issue-age, attained-age, or community-rated — and the exam expects you to know that attained-age policies rise with the insured's age while community-rated policies charge everyone in the area the same rate.

Standardized Plan Highlights

Key date trap: Plans C and F cover the Part B deductible and are therefore closed to anyone first eligible for Medicare on or after January 1, 2020. People already enrolled may keep them, but new beneficiaries cannot buy them.

Plans K and L stand apart because they share costs with the insured up to an annual out-of-pocket limit, after which the plan pays 100% of covered Part A and B cost-sharing for the rest of the year. Plan N trades a lower premium for modest copays — up to $20 for office visits and up to $50 for emergency-room visits that do not lead to admission. High-deductible versions of Plans F and G also exist, charging a much lower premium until the insured meets a separate high deductible. Knowing which plans cap out-of-pocket spending versus which add copays is a recurring exam distinction.

Open Enrollment and Guaranteed Issue

The Medigap Open Enrollment Period is a one-time 6-month window that begins the month a person is both age 65 or older AND enrolled in Part B. During this window, the applicant has a guaranteed-issue right: the insurer must sell any plan it offers, cannot use medical underwriting, cannot deny coverage, and cannot charge more for health conditions.

Outside this window (and outside specific guaranteed-issue situations such as losing other creditable coverage), insurers MAY medically underwrite, decline applicants, or impose a pre-existing condition waiting period of up to 6 months.

Free-Look and Replacement

Medigap policies carry a 30-day free-look period during which the insured may return the policy for a full premium refund. This is longer than the typical 10-day free-look on many other policies and is a tested distinction.

When replacing Medigap, agents must follow replacement rules and avoid stacking duplicate coverage. Selling a second Medigap policy that duplicates existing coverage is a prohibited practice.

The agent must obtain a signed statement that the new policy will replace, not duplicate, the applicant's existing coverage.

What Medigap Does and Does Not Cover

Medigap fills the gaps in Original Medicare (Parts A and B) — deductibles, coinsurance, and copayments — but it works only with Original Medicare, never with a Medicare Advantage (Part C) plan. It is illegal to sell a Medigap policy to someone enrolled in Medicare Advantage. Medigap also does not add drug coverage (that requires a separate Part D plan), and modern plans cannot cover the Part B deductible for newly eligible beneficiaries.

Plans are standardized and lettered (A through N) so that, for example, Plan G from any insurer offers identical benefits — insurers compete on price and service, not benefit design. This standardization is the reason the exam can ask comparative questions: the only variables among same-letter plans are premium and carrier.

Guaranteed-Issue Rights and Replacement Safeguards

The six-month Medigap Open Enrollment Period begins when the beneficiary is both 65+ and enrolled in Part B. During this window the insurer must issue any plan it offers at the best rate, without medical underwriting and regardless of health. Outside this window, insurers may underwrite and decline, except in specific guaranteed-issue situations (such as losing employer coverage or a Medicare Advantage plan leaving the area).

Replacement rules require a 30-day free-look and prohibit selling a beneficiary a duplicate policy. Agents must use the standardized outline of coverage and the federal "Choosing a Medigap Policy" guide. The exam stresses that the open-enrollment window is the one time underwriting is barred — missing it can leave an unhealthy applicant unable to buy supplemental coverage.