Laws and Regulations



In 1990 Congress passed a law requiring all states to comply with certain standards for Medigap insurance which supplements Medicare's coverage. The new law protects consumers by restricting certain sales practices of insurance agents and companies.  It also simplifies policies by limiting the types of plans that can be sold and by specifying exactly what benefits each plan must contain.

  • You only need one Medigap policy.  Agents must ask if you have other coverage and must indicate on the application that you intend to replace your old policy (if you have one) with the new policy.

  • If you have an existing Medigap policy, the agent must make a fair and accurate comparison of the policies.  It is unlawful to make an inaccurate or misleading comparison to sell new coverage.

  • Agents must give you an outline of coverage that summarizes the features of the policy.

  • Agents cannot pressure you to buy a policy by using high-pressure tactics such as frightening you about your present company or policy, or about changes in Medicare.

  • When you apply for a Medigap policy, agents must ask if you are eligible for Medicaid.  If you are eligible for Medicaid, you may not need a Medigap policy.

  • Companies must provide an open enrollment period of six months beginning with the first day of the first month in which the person enrolls in Medicare Part B. This applies to individuals 65 and older as well as those under age 65 who are eligible for Medicare because of a disability.

  • During the open enrollment period, the company must make available all plans it sells.

  • During this initial six-month period, companies cannot refuse to cover you because of your health conditions. However, if you have a medical condition that existed six months before you purchased your medigap policy, this condition may not be covered during the first six months of your coverage unless you had prior creditable coverage such as group health insurance, individual health insurance, Medicare or Medicaid .

  • Under the Balanced Budget Act of 1997, the Federal Government created the Medicare+Choice Program to expand the options of medicare eligible individuals beyond basic Medicare and HMO's. The new law requires companies to issue certain Medigap policies on a guaranteed basis (guaranteed issue) to individuals disenrolling from Medicare+Choice plans under certain circumstances.

  • If you enroll in a Medicare+Choice Health Plan when you first become eligible for Medicare and you decide to return to the original Medicare within 12 months, you are guaranteed the right to purchase any Medigap policy offered by any company that sells Medigap insurance in Pennsylvania.

  • You are guaranteed the right to buy Medigap Plans, A, B, C & F when the following conditions apply:  1) the Medicare+Choice Health Plan that you are enrolled in decides not to serve Medicare beneficiaries in your county, 2) you move to an area where your Medicare+Choice Health plan does not offer coverage or 3) your current Medigap insurance company decides not to offer Medigap insurance.

  • You are guaranteed the right to re-purchase your Medigap policy if you disenroll from the original Medicare program, you enroll in a Medicare+Choice Health Plan for the first time and then decide to disenroll from the Medicare+Choice Health Plan and return to original Medicare within 12 months.

  • Medigap policies can require a maximum waiting period of six months for pre-existing conditions.  However, if you are replacing a Medigap policy and you have met your pre-existing condition requirement, the new company must waive the waiting period for pre-existing conditions for any replacement policy.  You no longer have to pay premiums for two policies to have continuous coverage.

  • You have 30 days from the date you received the policy to review the policy.  If you return the policy within this time period, the company must refund in full the premium you paid.

  • The Balanced Budget Act of 1997 created a new option for Medigap insureds, a high deductible option.  The high deductible option will be offered only with Plan F or Plan J. This high deductible plan will pay the same benefits as provided under Plan F and J after the out of pocket deductible has been meet each year.  The deductible amount for 1998 and 1999 is $1,500.  In subsequent years this amount will be increased by the Consumer Price Index.  Out of pocket expenses, including Part A and Part B deductible, which would normally be paid by the policy, are subject to the high deductibles for theses plans.  For the prescription drug and foreign travel benefits, the high deductible requirements and the specific benefit deductible must be met before the insurer will reimburse an insured for expenses for either of these benefits.

  • Insureds will not be required to choose this high deductible option if they purchase Plan F or J since both plans will remain available without the high deductible option.