Want to Switch From Medicare Advantage to Medigap? Avoid These Mistakes

You can switch from a Medicare Advantage plan to Original Medicare with Medigap (also known as Medicare Supplement Insurance), but plan changes usually are only allowed at certain times of the year. However, exceptions are made under several special circumstances. Follow this guide to avoid making mistakes that could see you denied coverage or cost you more for it.

Key Takeaways

• Switching from Medicare Advantage to Original Medicare with a Medigap plan is possible—but you may pay a higher price or be denied coverage.
• You can switch during the Medicare open enrollment and Medicare Advantage open enrollment periods.
• Plan switches are also allowed if you qualify for a special enrollment period. 
• It’s best to enroll in Medigap when you qualify for a guaranteed issue without medical underwriting. 

When Can You Switch From Medicare Advantage to Medigap?

If you have a Medicare Advantage (MA) plan, it’s illegal for anyone to sell you a Medigap policy. However, if you disenroll from your MA plan and switch back to Original Medicare, you could be eligible for one of the many types of Medigap policies. Here are times when you can switch. 

Open Enrollment Periods

When you first become eligible for Medicare at age 65, the Medigap open enrollment period begins. During this once-only period, you can enroll in any Medigap policy sold in your state without undergoing medical underwriting (answering questions about your health). This is called “guaranteed issue.” So, even if you signed up for Medicare Advantage, you could switch back out in the first few months. 

After the initial enrollment period, Medicare Supplement providers can perform medical underwriting and generally aren’t required to issue you coverage. As a result, some insurers may decline to offer you Medigap coverage or charge you much higher costs for coverage. However, there are important exceptions in the first year, which we’ll talk about later in this article. 

Note

Some states also allow you to enroll in Medigap beyond the typical initial six-month window for open enrollment: New York, Connecticut, Maine, and Massachusetts. 

First-Year Trial Right Periods

There are two other periods that you could use to switch without underwriting (and potentially higher costs) under a category called “trial rights:”

• First-Year Trial Rights: You sign up for Medicare Advantage upon becoming eligible for Medicare. But within the first 12 months of the MA plan, you decide you want to switch to Original Medicare. You can also add any Medigap plan available in your state, but you have a limited timeframe.
• Later Trial Rights: Upon becoming eligible for Medicare, you signed up for Original Medicare and a Medigap policy. You switch to a Medicare Advantage Plan for the first time. If you’re unhappy with your Medicare Advantage plan, you have one 12-month period (your trial right period) to return to your Medigap plan plus Original Medicare. However, you can only return to the same plan if the insurance company still offers it. 

Special Enrollment Periods (SEPs)

You may also be able to switch to Original Medicare and a Medicare Supplement plan if a life situation qualifies you for a special enrollment period (SEP), such as if:

• You move out of your Medicare Advantage plan’s service area
• You lose your current coverage
• You become eligible for new coverage
• Your MA plan changes its contract with Medicare

However, the ability to switch depends on your situation and state. For example, if you move to a new service address that isn’t in your current Medicare Advantage plan’s service area, you’ll have two months from the date you report your move to switch plans. 

Why You Might Want to Switch

A few key differences exist between Medicare Advantage and Original Medicare plans with Medigap that could make you want to switch. Remember that Medigap plans vary by letter, but providers must all offer the same coverage for any given letter. 

You Want a Broader Provider Network

Most Medicare Advantage plans are health maintenance organizations (HMOs) or preferred provider organizations (PPOs), which limit the providers you can use or require you to pay more to see out-of-network providers. 

Original Medicare and Medicare Supplement Plans do not restrict you to a particular provider network. You can use any provider that accepts Medicare, which is most of them, and you typically don’t need referrals to see specialists. 

“This can be a bonus for snowbirds who spend winter in one part of the country and summer in another,” said Bob Rees, eHealth chief sales officer and VP of Medicare sales, by email.

You Want Lower Out-of-Pocket Costs

Depending on which Medigap plan you choose, the plan can cover up to 100% of many out-of-pocket Medicare expenses, such as:

• Part A and B coinsurance or copayments
• Hospital costs (up to an additional 365 days)
• Blood (up to three pints)
• Part A deductible
• Part B excess charges

“If you qualify for a Medigap plan—and can afford it—you’ll find that some Medigap plans (plans F and G, for example) provide you with very generous benefits to fill in your Original Medicare coverage gaps,” Rees said. “When you receive medical care, your out-of-pocket costs may be lower than they were with your Medicare Advantage plan.”

You Don’t Want to Wait for Approvals

Original Medicare with Medigap doesn’t typically require you to request a referral for the medical services and supplies you need. Medicare Advantage plan specialists typically may require referrals, leading to delays in getting care and possible misunderstandings around what’s covered. 

You Qualify for Guaranteed Issue With No Medical Underwriting

If you currently qualify for the guaranteed issue period of Medigap coverage without underwriting, it can make sense to take advantage and sign up. 

Can I Be Denied for a Medicare Supplement Plan?

In most states, you can be denied a Medicare Supplement Plan if you have preexisting health conditions and your open enrollment period has passed. Or you may be approved, but the cost will be higher. Or you may only be approved for some Medicare Supplement plans, but not others. 

Pros & Cons of Switching to Original Medicare With Medigap

Pros

• No provider networks

• Can cover up to 100% of most out-of-pocket expenses

• Referrals not required to see specialists

• Few to no approvals are needed for services and supplies

Cons

• Premiums will likely be more expensive

• You may face higher costs or denial after the initial enrollment period

• You won’t have Medicare Advantage benefits such as vision, hearing, and dental coverage

• Part D drug coverage isn’t included

Switching to the Original Medicare plan with Medigap comes with various benefits. Once you switch, you can use pretty much any provider in the U.S. accepting Medicare and won’t need a primary care physician to refer you to specialists. 

On the downside, a higher level of coverage on the backend often means you’ll pay a higher Medicare Supplement premium upfront.

“Monthly premiums for Medigap are typically much higher than for Medicare Advantage,” Rees said. “You could reasonably expect to pay about $200 monthly for Medigap coverage. By contrast, many people enroll in Medicare Advantage plans with no monthly premium.” 

Original Medicare plans also don’t come with extra benefits and Part D coverage built in, so you’ll have to purchase those separately if you want them. 

“If you’re on Medigap and want prescription drug coverage, you’ll need to buy a separate Part D prescription drug plan as well, which often has a monthly premium of $30 to $50,” said Rees, “Late enrollment penalties may also apply for Part D plans.”

Frequently Asked Questions (FAQs)

Can I Switch From Medicare Advantage to Medigap Without Underwriting?

It depends on the timing. You have a guaranteed issue right to buy any Medigap policy sold in your state if you signed up for Medicare Advantage and want to switch to Original Medicare in the first year of coverage. After the one-year trial period, you can be subject to medical underwriting and denials. You also get a one-year trial if you switch from Medigap to Medicare Advantage and decide to return to your old plan letter.

Can I Switch From Medicare Advantage to Medigap Without Penalty?

While there’s no penalty for switching from Medicare Advantage to Medigap, you may face higher Medigap premiums due to preexisting conditions if you enroll outside of the initial enrollment period. You could also face a penalty if you add Part D coverage. 

Can I Switch From Medicare Advantage to Medigap During Open Enrollment?

Yes, you can attempt to switch from Medicare Advantage to Medigap during open enrollment, but you may face denials or higher costs compared to Medicare Advantage costs. You must disenroll in Medicare Advantage, enroll in Original Medicare, and apply for Medigap. The new plan will go into effect on January 1 of the following year. 

The Bottom Line

It’s possible to switch from Medicare Advantage to Original Medicare with Medigap. It can be a cost-saving move in the long run. While Medicare Advantage plans can be enticing due to low premiums and extra benefits, the annual out-of-pocket costs can negate those benefits if you need expensive medical services. 

If you’re currently in your Medigap open enrollment period or your first year with a Medicare Advantage plan, you may want to switch while you can get guaranteed approval without medical underwriting. However, you’ll need to weigh both options’ pros and cons to determine what’s best for your budget and situation. 

Read the original article on Investopedia.