Medicare Supplement

How Medigap's Standardized Letter Plans Really Work

AURORA, Ill. — If you've started shopping for a Medicare Supplement policy, you've probably noticed something odd: the plans are named with letters. Plan A, Plan G, Plan N, and a handful of others. It can feel like alphabet soup, especially when two different insurance companies seem to be selling the "same" letter for very different prices.

Here's the good news. Those letters aren't marketing labels. They're standardized by federal law, and once you understand how the system works, comparing Medigap policies gets a lot easier.

What Medigap actually does

Medicare Supplement Insurance — usually called Medigap — is private insurance that helps pay some of the out-of-pocket costs Original Medicare (Part A and Part B) leaves behind. Think coinsurance, copayments, and in some cases the Part A hospital deductible.

Medigap works with Original Medicare, not instead of it. Medicare pays its share of an approved service first, and then your Medigap policy pays its share. You keep your red, white, and blue Medicare card, and you can generally see any doctor or hospital in the country that accepts Medicare.

A few things Medigap does not do:

• It does not cover prescription drugs. For that, you'd need a separate Part D plan.
• It does not work with Medicare Advantage. You can't use a Medigap policy to pay Advantage plan copays, and in most cases it's illegal for someone to sell you one if you're on Advantage.
• It does not typically cover dental, vision, hearing aids, or long-term care.

Why the letters exist

Before the 1990s, Medigap was a confusing marketplace with wildly different policies. Congress stepped in and told insurers: if you want to sell Medicare Supplement insurance, you have to sell one of a set of standardized plans, each identified by a letter.

Today, in most states, there are 10 standardized Medigap plans: A, B, C, D, F, G, K, L, M, and N. (Massachusetts, Minnesota, and Wisconsin standardize their plans a little differently.)

The key thing to understand: the benefits inside each lettered plan are identical from one company to the next. A Plan G sold by one insurer covers the same Medicare gaps as a Plan G sold by another insurer. What can differ is the premium, the company's customer service, and how they handle rate increases over time.

What changed for newer enrollees

If you became eligible for Medicare on or after January 1, 2020, you cannot buy Plan C or Plan F. That's because those plans covered the Part B deductible, and federal law no longer allows new Medigap plans to do that.

For people in that group, Plan G and Plan N are the closest equivalents and are commonly discussed as replacements. If you were already eligible for Medicare before 2020, you can still buy C or F if a company in your area sells them.

How to think through which letter fits

Since the benefits are set by law, choosing a letter really comes down to how much risk you want to carry yourself versus how much you'd rather pay in monthly premium.

A few questions worth asking:

• How often do you see doctors? If you use care frequently, a plan with fuller coverage may feel worth a higher premium.
• How steady is your budget? Some people prefer predictable monthly costs; others don't mind paying a deductible now and then in exchange for a lower premium.
• Do you travel? Some Medigap letters include limited foreign travel emergency coverage.
• When did you become eligible for Medicare? That determines which letters are even on the table for you.

Aurora is in Kane County, and Illinois residents have a range of Medigap carriers to choose from. Because premiums for the same letter can vary meaningfully between companies, it's worth getting quotes from more than one insurer before you decide.

The enrollment window that matters most

The single most important thing to know about Medigap is the Medigap Open Enrollment Period. It's a one-time, six-month window that starts the month you're 65 or older and enrolled in Part B.

During that window, insurers must sell you any Medigap policy they offer, at their best available rate, regardless of your health. Outside that window, in most states, insurers can use medical underwriting — meaning they can charge you more or turn you down based on your health history. Illinois follows the federal rule here.

This is different from the Medicare Annual Enrollment Period (Oct. 15 – Dec. 7), which is for Part D and Medicare Advantage, not Medigap.