Medicare Supplement (Medigap)

Full Definition

Medicare Supplement Insurance (Medigap) is private insurance that supplements Original Medicare (Parts A and B) by paying some or all of the copays, coinsurance, and deductibles Original Medicare leaves to the beneficiary. Plans are standardized by CMS into letter designations (A, B, C, D, F, G, K, L, M, N) — Plan G and Plan N are the highest-volume plans for new enrollees since Plan F was closed to those newly eligible after January 1, 2020. Medigap is sold by private carriers but benefits are identical across carriers for the same letter plan; price and customer service are the only differentiators. Medigap commissions are not CMS-capped (unlike MA) and typically run 20–25% first-year on premium with 20–25% renewals for 5–6 years. Medigap is the primary alternative to Medicare Advantage for 65+ consumers.

Example

A T65 consumer in Texas chooses Plan G at $135/month. The agent earns 22% FYC = ~$356 first-year, with renewals at 22% for 6 years — a $2,100+ lifetime commission if the client persists.

Common Misconceptions

Medigap cannot be sold alongside Medicare Advantage. A beneficiary can only have one or the other. Cross-selling Medigap to an existing MA enrollee requires disenrolling them from MA first.

Related Terms

• Medicare Advantage (Part C) — Private insurance plans that deliver Medicare Part A and B benefits (and usually Part D) as an alternative to Original Medicare.
• Part D (Prescription Drug Plan) — Optional Medicare prescription drug coverage, offered as a standalone PDP or bundled into Medicare Advantage (MA-PD).
• T65 (Turning 65) — Marketing shorthand for consumers approaching their 65th birthday who are entering their Medicare Initial Enrollment Period.
• AEP (Annual Enrollment Period) — The October 15 – December 7 annual window during which Medicare beneficiaries can enroll in, switch, or drop Medicare Advantage and Part D plans.

Where This Applies on InsureLeads

• Medicare Leads
• Final Expense Leads
• ACA / Health Leads
• IUL Leads