16.3 Medicare Supplement (Medigap) Standardized Plans and Enrollment

Medicare Supplement (Medigap)

A Medicare Supplement policy, commonly called Medigap, is private insurance designed to pay the deductibles, coinsurance, and copayments that Original Medicare leaves to the beneficiary. Because Original Medicare has no out-of-pocket maximum, Medigap protects retirees from the open-ended 20% Part B coinsurance and per-benefit-period Part A deductibles.

Medigap works only alongside Original Medicare. It does not coordinate with Medicare Advantage (Part C), and it does not provide prescription drug coverage; drug coverage requires a separate Part D plan. Selling Medigap to someone enrolled in an Advantage plan is a prohibited practice.

Think of the relationship as layered. Original Medicare pays first; the Medigap policy then automatically pays the patient's share (the Part A deductible, the Part B 20% coinsurance, and so on) according to the plan letter purchased. Because claims flow automatically through Medicare's crossover system, the insured usually has little paperwork. This automatic, predictable cost-sharing fill is the reason Medigap remains popular with retirees who want budget certainty rather than network restrictions.

Standardization of Plans

Under federal law, Medigap benefits are standardized into lettered plans. Every insurer that sells a given letter must provide the identical core benefits, so a buyer can compare on price and service alone.

Trap: Because Plan F and Plan C are the only plans that pay the Part B deductible, federal law (MACRA) closed them to anyone newly eligible for Medicare on or after January 1, 2020. People eligible before that date may keep or still buy them.

Why Standardization Matters on the Exam

The key tested idea is uniformity of benefits. If two insurers both sell Plan G, the covered benefits are exactly the same; only the premium and the company's service differ.

• Plan F (where still available) is the most comprehensive, covering both the Part A and Part B deductibles.
• Plan G is identical to Plan F except it does not pay the Part B deductible, which is why it became the go-to plan for those eligible after 2020.
• Plans K and L introduce consumer cost sharing in exchange for an annual out-of-pocket limit, after which the plan pays 100%.

Scenario: A new 65-year-old wants the most complete Medigap available to them. Because they became eligible after 1/1/2020, Plan F is closed, so the best available comprehensive option is Plan G.

A high-deductible version exists for Plans F and G: the insured pays a higher annual deductible in exchange for a lower premium, after which the plan pays like the standard version. Plan N trades a lower premium for modest copays (for example a small charge for some office visits and emergency-room visits that do not lead to admission) and does not cover Part B excess charges. Matching a client's budget and risk tolerance to the right letter, rather than defaulting to the richest plan, is the suitability skill these questions test.

Medigap Open Enrollment and Guaranteed Issue

The most important consumer protection is the Medigap Open Enrollment Period (OEP): a one-time, 6-month window that begins the first month a person is age 65 and enrolled in Part B.

Trap: Outside this window (and outside specific guaranteed-issue events such as losing employer coverage), an insurer may medically underwrite and can charge more or decline. A healthy applicant who waits past the 6 months gives up the guaranteed-issue right.

Renewability, Free Look, and One-Policy Rule

Medigap policies carry standard consumer-protection provisions tested on the national exam.

• Guaranteed renewable: the insurer must renew as long as premiums are paid and may not cancel for health changes.
• Free-look period: at least 30 days to review the policy and obtain a full refund if returned.
• One policy at a time: it is illegal to sell a person a second Medigap policy when they already have one in force, unless they are replacing the first.
• Replacement: when replacing a Medigap policy, the producer must follow replacement rules and the applicant signs a statement acknowledging the replacement.

Scenario: A producer suggests adding a second Medigap policy 'for extra coverage.' This violates the one-policy rule and is a prohibited practice; the correct path is replacement, not duplication.

Producers must also avoid high-pressure tactics, must deliver the official Guide to Health Insurance for People with Medicare, and must not use misleading statements implying a government endorsement. When replacing coverage, the agent completes a replacement notice so the buyer understands they are giving up the old policy and may face new underwriting if they later want a different plan. These conduct rules appear repeatedly on the national portion, often paired with the standardization and open-enrollment concepts above.