16.3 Medicare Supplement (Medigap) Standardized Plans and Enrollment

Purpose of Medigap

A Medicare Supplement policy — commonly called Medigap — is private insurance that fills the gaps in Original Medicare: the deductibles, coinsurance, and copayments that Parts A and B leave to the beneficiary. Its single biggest value is covering the 20% Part B coinsurance that has no out-of-pocket maximum under Original Medicare.

Core Rules That Define Medigap

• A Medigap policy works only with Original Medicare — never with a Medicare Advantage (Part C) plan.
• It covers one person; spouses each need their own policy.
• Plans are guaranteed renewable as long as premiums are paid.
• Since 2006, Medigap policies cannot include prescription drug coverage — beneficiaries use a separate Part D plan.
• A person should have both Part A and Part B to get the most value, since Medigap pays secondary to Medicare.

Trap: It is illegal to sell a beneficiary a second Medigap policy when they already have one (an unnecessary duplicate), or to sell Medigap to someone in a Medicare Advantage plan.

Standardized Plans

Medigap plans are standardized by the federal government and identified by letters (A through N). Standardization means Plan G from one insurer covers exactly the same benefits as Plan G from any other insurer — only the price and service differ. (Massachusetts, Minnesota, and Wisconsin use their own standardization systems.)

How the Letters Work

Reading a Coverage Grid

Exam point: Because plans are standardized, the only thing a producer can compete on is price and service — identical lettered plans cannot differ in benefits. This is why comparing premiums across insurers matters.

Enrollment and Consumer Protections

The Medigap Open Enrollment Period

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 sell any Medigap plan it offers — guaranteed issue.
• The insurer cannot use medical underwriting, deny coverage, or charge more for health problems.

Outside this window, an applicant can usually be medically underwritten and may be declined or rated — unless a guaranteed-issue (special enrollment) right applies (for example, losing employer or Medicare Advantage coverage).

Free-Look and Replacement

• Free-look period: Medigap policies carry a 30-day free-look — the buyer may return the policy for a full refund within 30 days.
• Replacement: When replacing a Medigap policy, the producer must follow replacement rules, deliver the required notices, and avoid duplication. There is generally no new pre-existing waiting period if the new policy replaces equivalent prior coverage held long enough.

Pre-Existing Conditions

Medigap may impose a pre-existing condition waiting period of up to 6 months, but prior creditable coverage reduces or eliminates it.

Scenario

Maria turns 65 in March and enrolls in Part B effective March 1. Her 6-month Medigap Open Enrollment Period runs March 1 – August 31. If she applies for Plan G in May, the insurer must issue it without underwriting. If she waits until October, she is past the window and can be underwritten or declined — a classic exam consequence of missing the one-time window.

Guaranteed-Issue (Special) Rights

Even outside the open enrollment window, certain events restore guaranteed-issue protection so the insurer cannot underwrite or decline. Common triggers include:

• The beneficiary's Medicare Advantage plan leaves the program or stops serving their area.
• They moved out of the plan's service area.
• Their employer or union group coverage ending.
• A trial right — they tried Medicare Advantage for the first time and switch back to Original Medicare within 12 months.

Rating Methods (Why Premiums Differ)

Because benefits are fixed by letter, premium becomes the comparison point, and insurers use one of three rating methods:

Exam point: An attained-age policy looks cheapest at 65 but climbs every year; an issue-age policy locks the age factor at purchase. Knowing the difference helps a producer explain why the lowest first-year premium is not always the best long-term value.

Why newer enrollees cannot buy Plans C and F

Medigap Plans C and F cover the Part B deductible. Because of the MACRA reform, these two plans are closed to anyone newly eligible for Medicare on or after January 1, 2020; those already eligible before that date may keep or still buy them. The exam tests this cutoff and the resulting popularity of Plan G, which is identical to Plan F except the enrollee pays the Part B deductible out of pocket.

The high-deductible and Plan K/L cost-sharing variants

High-deductible Plan G offers the same benefits after the enrollee meets a high annual deductible, lowering the premium. Plans K and L pay only 50% and 75% of certain cost-sharing items but include an out-of-pocket maximum, after which they pay 100%. Plan N uses small copays for office and ER visits. Across all carriers, a given letter plan covers identical benefits by law, so consumers shop on price and service alone.