If you have original Medicare, you know your out-of-pocket costs can really add up throughout the year. Medigap is one solution to lessen the strain on your wallet. This is supplemental insurance sold by private companies to help cover Medicare’s out-of-pocket costs.
Already have a Medigap policy? You may wonder whether you can—or should—switch to another policy. Reasons to switch plans might include high out-of-pocket costs, paying for benefits you don't need, or changes in your health that require additional coverage options.
How difficult is it to change Medigap plans? Can you cancel Medigap at any time? In most cases, you cannot change your Medigap coverage outside the Medigap Open Enrollment Period—the 6-month period that starts the first month you have Medicare Part B and you’re 65 or older. However, there are certain exceptions when you have what’s called a “guaranteed issue right.”
What is a guaranteed issue right?
Some situations permit you to buy a Medigap policy outside of your Medigap Open Enrollment Period. These situations are called “guaranteed issue rights,” or “Medigap protections.” Contact your state insurance department to learn more about your options. Also, Medicare.gov offers an online tool to help you find out if you have a legal right to switch or drop Medigap policies.
Suspending Medigap coverage if employed
If you have Medicare and you’re under age 65, you can suspend (put on hold) your Medigap policy at any time without penalty when you have employer-sponsored health insurance coverage (whether on your own or through a spouse). Be sure to contact your Medigap insurance carrier and notify them that you would like a suspension.
If you lose your employer group coverage, you can get your Medigap policy reinstated as long as you notify the carrier within 90 days. Your Medigap coverage will begin the day group coverage is lost.
Suspending Medigap if you're new to Medicaid
Medigap policies can be put on hold, or suspended, within 90 days of getting Medicaid benefits. To request a suspension, you must send the policy issuer a letter. Your insurance carrier can provide more information on exactly what you should put in the letter and where you should send it
Medigap policies can be suspended for up to two years. Some people choose to keep their Medigap policy active so they can see doctors who do not accept Medicaid. This can be expensive and should be considered carefully.
If you already receive Medicaid benefits, an insurance carrier cannot by law sell you a Medigap policy unless:
- Medicaid pays the Medigap premium.
- Medicaid only pays all or part of the Medicare Part B premium.
Switching from Medigap to a Medicare Advantage plan
Medigap policies cannot work with Medicare Advantage (Part C) plans. A Medigap policy cannot be used to pay Medicare Advantage copayments, deductibles, and premiums. It is best to drop your Medigap policy if you're enrolling in a Medicare Advantage plan.
If you switch from a Medicare Advantage plan back to Medigap in the future, returning to the same (or any) policy may not be possible without a guaranteed issue right. Generally, these rights are only applicable during the first 12 months of enrollment in a Medicare Advantage plan.
Changing Medigap policies
Once you know you are eligible to switch you can apply for a new Medigap policy from the insurance company you’ve chosen. When your application is accepted and you have new coverage, you’ll want to contact your current insurance provider and request to end your coverage.
By law, when you buy a Medigap policy, there is a 30-day “free look” or trial period. You can cancel your plan, and receive a refund, if you’re unsatisfied with your policy during this 30-day period. This is a good opportunity to make sure you’re comfortable with the coverages and costs.
