Close the Medigap Act of 2025
The Close the Medigap Act of 2025 would overhaul how Medicare supplement (Medigap) policies are issued, priced, and presented to consumers. The core changes create stronger consumer protections: requiring guaranteed issue (no health underwriting) for most Medicare Part A and Part B enrollees; tightening pricing practices to prevent discrimination by health status, age, or geography; raising and tying medical-loss-ratio (MLR) requirements to NAIC guidance; expanding consumer information and decision-support on the Medicare Plan Finder website; restoring first-dollar Medigap coverage by removing a current restriction; and adding new broker transparency rules. The package is designed to make Medigap options easier to obtain, more predictable in cost, and better explained to consumers, though it also signals potential shifts in premium levels and market dynamics as underwriting is reduced and coverage standards broaden. Key provisions are phased in, with most changes applying to policies effective on or after January 1, 2026, and a phased implementation period up to January 1, 2031 to minimize disruption for current enrollees. The bill also requires outreach and consumer-testing activities to help consumers understand changes to Medigap options and costs.
Key Points
- 1Guaranteed issue and broader non-discrimination in Medigap: Insurers may not deny issuance, impose waiting or preexisting-condition periods, or price differently based on health status, health care received, medical conditions, or genetic information for individuals entitled to Medicare Part A and enrolled in Part B. There are limited exceptions (e.g., certain Part A eligibility scenarios) and protections against applying these rules to other underwriting scenarios.
- 2Phase-in and effective date: The guaranteed-issue provisions would apply to Medigap policies effective on or after January 1, 2026, with the Secretary able to phase in the changes over up to five years, full implementation by January 1, 2031.
- 3Medical Loss Ratio (MLR) adjustments: The bill keeps the existing pre-2026 MLR floors (75% for group policies, 65% for individual policies) for periods before 2026. For periods on or after 2026, the required MLR would be at least the earlier floors and also at least the NAIC-recommended minimum, if such a recommendation would be higher.
- 4Pricing standards and NAIC role: The Secretary would work with the National Association of Insurance Commissioners (NAIC) to revise pricing standards for all Medigap benefit packages to prevent age-based discrimination, discrimination based on eligibility for certain Medicare categories, and location-based pricing within counties. These revised standards would apply to new enrollees on or after January 1, 2026.
- 5Plan Finder enhancements and consumer information: The CMS Plan Finder website would be required to provide (1) access to provider networks and cost implications; (2) detailed out-of-pocket cost estimates; and (3) state-specific guaranteed-issue information (and explanations where such rules do not exist), with ongoing reviews and updates to present information clearly and in consumer-friendly language. The website would also undergo consumer testing and public comment processes.
- 6Restoring first-dollar Medigap coverage: The bill would strike a provision (1882(z)) that currently restricts first-dollar coverage, effectively restoring access to Medigap plans that cover the Medicare Part A deductible and other first-dollar costs.
- 7Broker transparency: Medigap insurers would be required to annually report to the Secretary payments or other transfers of value to agents, brokers, and third parties, including recipient details, amounts, dates, and descriptions of payments. The broker-transparency requirements would be integrated with the existing disclosure framework used for other sectors.