Changing Medigap Supplement Plans

Switching Medicare Supplement Plans After Open Enrollment

For many people, you get one shot at picking the Medigap policy you really want with guaranteed acceptance. That happens during your open enrollment period, which begins the first month you are covered under Medicare Part B and you are at least 65 years old.

Of course, you can delay your enrollment in Medicare Part B, which, in turn, delays your Medigap open enrollment period. Your health status when you first enroll in a Medigap plan can play an important role in which Medigap plan you choose. Your age at the time plays a role in how much you pay for it. However, those factors can change and switching Medigap plans may be in your future.

There are many reasons for switching Medicare supplement plans.

Your current Medigap plan design covers more than necessary

You're in good health and you don't use all of your Medigap benefits. A cheaper plan would work better for you. In this case, you probably won't have any trouble changing Medigap plans. Do some research to find the best plan at the best price in your state. Medigap plans are regulated and all insurance companies must offer the same benefits. So, as long as you're switching Medigap plans, you might as well get the best price as well.

You are paying too much in out-of-pocket costs

You're in poor health and you have your eye on a better Medigap plan design that could help save your budget. Switching Medicare supplement plans may be difficult. If you're not turned down because of your health, you may have to wait six months to be covered for costs associated with a pre-existing condition.

But don't give up. Some states have laws that guarantee certain Medigap plans. Check your state's insurance website to see what's available in your area. Also check around with different insurance companies to see their rules for switching Medigap plans. Some insurers also offer guaranteed-issue plans in certain areas.

You found out a friend is paying less than you for the same Medigap plan design

There are only ten Medigap plan designs (A through N) available (unless you live in Massachusetts, Minnesota or Wisconsin). All insurance companies must offer the same benefits, but they can pick which of the ten plan designs they want to offer and they can price the plans differently. Since you get the same benefits, switching Medigap plans may be a smart move if you're able to do it.

First, find out why your friend pays a different amount. Is she with a different Medigap insurance company? How old is she now? How old was she when she first enrolled? These factors can make a difference.

Insurance companies set their Medigap premiums using one of three age-based methods. They are:

• No-age rated - everyone pays the same at that company for that plan, regardless of age
• Entry-age-rated - your premium is determined by your age when you first enroll
• Attained-age rated - your premium goes up as you get older

Before changing Medigap plans, shop around to see what's available in your area to try to find a cheaper rate. But remember, depending on your health status, changing Medigap plans is not always guaranteed.

You have a Medicare Advantage Plan and want to switch to Original Medicare with Medigap

You don't need Medigap when you have a Medicare Advantage Plan so this is not the same thing as switching Medigap plans. Still, there things you should know.

If you were previously enrolled in Medicare Part B, but switched to Medicare Advantage and now want to switch back, getting the Medigap plan you want depends on the situation.

• If you only had the Medicare Advantage Plan for less than one year, this is your "trial right" period and you can switch back to Medicare Part B with guaranteed issue to the same Medigap plan you had before making the switch.
  • If your previous Medigap plan is no longer available, then you may be able to choose a different plan with guaranteed issue.
  • If you didn't have a Medigap plan before the switch, then you do not have guaranteed issue.
• If you had the Medicare Advantage Plan for more than a year, then you cannot get guaranteed issue under Federal law, but you may be able to find acceptance to a plan by shopping around.

You have an older Medigap policy that has been discontinued

Stop! If this is your reason for switching Medigap plans, think again. You don't have to change plans just because the one you have is no longer offered. Consider your needs first. You may be interested to know that none of the 10 Medigap plans currently offered include coverage for prescription drugs. If your Medigap plan does, then you might want to hang on to it. You may still want to make a change for other reasons, but don't do it just because your plan is no longer offered. You are allowed to keep a discontinued Medigap policy with its original benefits and are not obligated to change it. You are, however, not allowed to newly enroll in a discontinued Medicare supplement plan.

Other points to remember when switching Medicare supplement plans

• When changing Medigap plans, you get a 30-day "free look" period when you can carry both plans in case you change your mind. Don't drop your old plan until you're sure you want the new one. You'll have to pay both premiums during this time.
• You do not need (and cannot be sold) a Medigap plan when you have Medicare Advantage (Part C). That's because Medigap only covers out-of-pocket costs associated with Original Medicare (Parts A and B). But you have the right to keep your existing Medigap plan even if you switch over to Medicare Advantage. While it is best to drop the plan - because you would be paying a premium and getting absolutely no benefits - you do have the right to maintain the policy if you think you'll return to it after the one-year "trial right" period with Medicare Advantage ends. It may be one way to guarantee your acceptance later on.