16.3 Medicare Supplement (Medigap) Standardized Plans and Enrollment

Medicare Supplement (Medigap) Standardized Plans and Enrollment

Medicare Supplement insurance, commonly called Medigap, is sold by private insurers to pay the deductibles, coinsurance, and copayments that Original Medicare leaves to the beneficiary — most importantly the open-ended Part B 20% coinsurance. Medigap works only alongside Original Medicare (Parts A and B), never with a Medicare Advantage plan. Because Medigap is federally standardized, exam questions test the lettered plans, the guaranteed-issue window, and the consumer-protection rules.

Standardized lettered plans

In most states Medigap plans are standardized by the federal government into lettered plans: A, B, C, D, F, G, K, L, M, and N. Every insurer's Plan G is identical in benefits to every other insurer's Plan G — they compete on price and service, not coverage. Plan A is the core benefit package every insurer offering Medigap must make available.

Two of the most popular plans for the exam:

• Plan F — the most comprehensive (covers the Part B deductible) but is closed to those newly eligible on or after January 1, 2020.
• Plan G — covers nearly everything Plan F does except the Part B deductible; now the top seller for new enrollees.

Sample benefit comparison

Worked example: A Plan G member has $4,000 in Part B-approved charges after the Part B deductible. Original Medicare pays 80% ($3,200); Plan G pays the remaining 20% ($800). The member's only Part B out-of-pocket is the annual deductible Plan G does not cover.

Open Enrollment and guaranteed issue

The Medigap Open Enrollment Period is a one-time, 6-month window that begins the first month a person is both age 65 or older AND enrolled in Part B. During this window the insurer must sell any offered Medigap plan on a guaranteed-issue basis: no medical underwriting, no health-based denial, and no premium surcharge for health.

Trap: outside this window (and outside specific guaranteed-issue events such as losing employer coverage or an MA plan leaving the area), insurers may medically underwrite and decline or surcharge applicants. Missing the 6-month window is a costly, frequently tested mistake.

Pricing methods and core protections

Medigap premiums are rated three ways:

• Community-rated (no-age-rated): same premium regardless of age.
• Issue-age-rated: premium based on age at purchase; does not rise with age.
• Attained-age-rated: premium rises as the insured ages — cheapest early, most expensive later.

Federal protections every producer must honor: a 30-day free-look period, guaranteed renewable coverage, a ban on selling duplicate Medigap coverage, and the suitability/replacement rules requiring proper disclosure when replacing existing coverage. Selling a second Medigap policy to someone who already has one is a prohibited practice.

Replacement and disclosure duties

When replacing Medigap coverage, the producer must deliver the Guide to Health Insurance for People with Medicare and a Medigap replacement notice, and document that the new policy is appropriate for the client's needs.

Prohibited practices that show up on the exam include high-pressure tactics, twisting (misleading a client into replacing coverage), and knowingly selling duplicate or unnecessary policies. A producer who tells a client a Medigap plan covers long-term custodial care is misrepresenting the product — Medigap follows Medicare, which excludes custodial care.

The Six-Month Open Enrollment Window and Post-2020 Rules

The single most-tested Medigap rule is the 6-month open enrollment period that begins the month a beneficiary is age 65 and enrolled in Part B. During this window the insurer must sell any Medigap plan it offers on a guaranteed-issue basis — no medical underwriting, no health-based denial or surcharge. Outside this window (and absent a guaranteed-issue triggering event), the insurer may underwrite and decline.

A post-2020 change frequently tested: beneficiaries newly eligible on or after January 1, 2020 may not buy plans that cover the Part B deductible — so Plans C and F are closed to new enrollees, leaving Plan G as the comprehensive choice for that group.

Trap: Medigap supplements Original Medicare only — a beneficiary cannot use a Medigap policy alongside a Medicare Advantage plan, and it is illegal to sell one to an MA enrollee.