Medicare Overhaul: "Close the Medigap Act of 2025" Expands Coverage, Bans Price Discrimination

The "Close the Medigap Act of 2025" aims to significantly overhaul Medicare supplemental insurance (Medigap) policies, bringing some major changes to how these plans operate and who can access them. The core purpose is to make Medigap more accessible, affordable, and transparent for everyone on Medicare.

Guaranteed Coverage and Fair Pricing

This bill tackles two big issues: denial of coverage and price gouging. Starting January 1, 2026, insurance companies must offer Medigap policies to anyone eligible for Medicare, regardless of their health history. That means no more being rejected or charged sky-high premiums because of pre-existing conditions, past illnesses, or even genetic information (Sec. 2). Think of someone who developed a chronic condition after initially enrolling in Medicare – they could be denied a Medigap policy under current rules, leaving them with huge bills. This bill changes that.

Furthermore, the bill puts a stop to discriminatory pricing based on age or location (Sec. 4). Insurers won't be able to jack up your rates just because you turned 70 or live in a particular zip code. The National Association of Insurance Commissioners (NAIC) is tasked with updating standards to ensure pricing is fair and doesn't jeopardize access to the program.

Making Sense of Medigap: Transparency Boost

Choosing a Medigap plan can be a confusing maze. This bill aims to fix that by significantly upgrading the Medicare Plan Finder website (Sec. 5). The upgraded site will provide clearer information on provider networks (so you know which doctors are covered), out-of-pocket costs (deductibles, copays, etc.), and each plan's financial stability. It will also explain state rules on guaranteed issue, crucial for those with pre-existing conditions, until the nationwide guarantee kicks in on January 1, 2026.

There will also be a public comment period starting six months after enactment and annually from December 7, to gather stakeholder input on improving the presentation of Medicare supplemental policy options. The bill requires the Secretary of Health and Human Services (HHS) to consult with the NAIC and do consumer testing before launching the improved website. This helps ensure it's actually user-friendly.

Spending and Broker Transparency

The bill also addresses how insurance companies spend your premium dollars. It requires a periodic review of medical loss ratio policies (Sec. 3). This means insurers must spend a minimum percentage of premiums directly on healthcare costs – at least 75% for group policies and 65% for individual policies, or whatever the NAIC recommends starting in 2026. This ensures more of your money goes to actual care, not administrative overhead.

Finally, the bill shines a light on payments made to insurance brokers (Sec. 7). Starting 12 months after enactment, insurance companies must report all payments and transfers of value to agents, brokers, and other third parties. This adds a layer of transparency, letting you know who's getting paid to sell you a policy.

First-Dollar Coverage

One notable change is the restoration of access to "first-dollar" Medigap coverage (Sec. 6). This means some plans will again cover all out-of-pocket costs from the very first dollar, eliminating deductibles for certain services. This can be a significant benefit for those with frequent medical needs. While the implementation of guaranteed issue can be gradual (fully implemented by January 1, 2031), the core changes aim to make Medigap more equitable and user-friendly.