Switching Insurance – Supplemental Medicare Plan
A Guide to Switching Medigap Health Care Options
Oct 15, 2009
According to Medicare.gov's "Chosing a Medigap Policy," Federal Law does not provide Medigap owners the right to switch Medigap supplemental insurance policies under normal circumstances. However, if you are "within your six month Medigap open enrollment period or are eligible under a specific circumstance for guaranteed issue rights," there are situations in which you can exchange one Medigap insurance supplemental plan for another.
Additionally, some states have more generous guidelines on exchanging Medigap policies than others, and some private insurance companies may be willing to exchange Medigap supplemental insurance plans.
Caution - Know These Facts Before Switching Medigap Insurance Supplemental Plans
When thinking about switching supplemental Medicare plans, it's important to consider the following points of information:
- If a supplemental Medicare plan was purchased before 1992, it is essential to compare benefits between the old plan and the new Medigap policy being considered, as older plans may offer coverages not included in newer insurance supplemental plans.
- Conversely, supplemental Medicare plans bought before 1992 might not be guaranteed renewable as are newer Medigap plans, and it is necessary to check this status when considering an exchange of insurance supplemental plans. In addition to this, older policies might have larger premium increases than newer Medigap plans. (For information on how current Medigap plans are rated and priced, consult: Medigap Pricing for Insurance Supplemental Plans.)
Remember that, before switching, it is important not cancel the older policy until the you have definitely decided to keep the newer one. Also, keep in mind that those who buy supplemental Medicare health insurance have a 30 day window within which to evaluate a chosen health care option.
Are There Wait Periods When Switching Supplemental Insurance Plans?
Concerning Medigap insurance supplemental plans purchased through private insurers, such as Humana or Aetna, the answer is simple: no. However, Medicare.gov cautions, "You should be aware that if you have had your old Medigap policy for less than six months, the Medigap insurance company may be able to make you wait up to six months for coverage of a pre-existing condition. However, if your old Medigap policy had the same benefits, and you had it for six months or more, the new insurance company can’t exclude your pre-existing condition. If you’ve had your Medigap policy less than six months, the number of months you’ve had your current Medigap policy must be subtracted from the time you must wait before your new Medigap policy covers your pre-existing condition."
It should be noted that if a new supplemental Medicare plan contains a benefit not found in the old policy, health insurance companies may make you wait as long as six months before being covered. (This situation may change under President Obama's proposed health care reform plan.)
Reasons to Switch Medigap Insurance Supplemental Plans
While there could be a variety of reasons one might want to change supplemental Medicare plans, below are some common ones:
- Your Medigap health care costs are higher than necessary because you are paying for benefits you don't need;
- You now need more benefits than you did previously, and thus require a different health care option;
- You are not satisfied with the private insurance company providing your Medigap insurance supplemental plan;
- You want to find an identical plan which costs less from another insurance company.
Note: It is always important to compare the costs of Medigap insurance supplemental plans when thinking or purchasing of switching supplemental Medicare plans.
Switching Medigap Insurance Supplemental Plans When Moving Out-of-State
According to Medicare.gov, "You can keep your current Medigap policy regardless of where you live as long as you are still in Original Medicare."
However, it should be noted that if you have Medicare SELECT and you move to an area which does not support your policy, you can:
- Purchase a "standardized Medigap policy" as your health care option, or
- Purchase Medigap Plan A, B, C, F, K, or L by invoking a guaranteed issue right.
Medicare Advantage Plans and Medigap Insurance Supplemental Plans
According to Medicare.gov, "Medigap policies can’t work with Medicare Advantage Plans. If you decide to keep your Medigap policy, you will have to pay your Medigap policy premium, but the Medigap policy can’t pay any deductibles, copayments, or coinsurance under a Medicare Advantage Plan. So, if you want to join a Medicare Advantage Plan, you may want to drop your Medigap policy."
Keep in mind that once you switch to a Medicare Advantage Plan, it may be difficult to reclaim your supplemental Medicare plan and return to your previous health care option.
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