The Rules for Making a Medigap Switch
You want to find the best Medicare medigap plan for your budget. Sometimes that means changing things up. Here's some guidance.
![Medicare Medigap Puzzle: Puzzle Pieces with Alphabetical Plan Letters](https://cdn.mos.cms.futurecdn.net/CsX3aRXDTem5NBz6yrgUh6-415-80.jpg)
If you're on traditional Medicare, you already know the importance of having a medigap plan. Medigap is private supplemental insurance that helps fill gaping holes in traditional Medicare's government- administered coverage, like the $1,556 Part A deductible for hospital care or Part B coinsurance for doctor services, typically 20% in addition to this year's $233 Part B deductible.
There are 10 types of medigap plans, each labeled by a letter from A to N, and every plan with the same letter has identical benefits, even if the insurer is different. But the monthly premiums can be worlds apart. Depending on the insurer, a 70-year-old male in South Carolina could pay anywhere from $95.92 to $353.45 a month for medigap Plan G, even though the coverage is identical, says John Hill, president and CEO of Gateway Retirement in Rock Hill, S.C.
That price differential is why it pays to periodically test the market. "I'd say about 50% of people are paying too much for their medigap plans," says Kelly Maxwell, owner of the insurance brokerage Seniors Mutual in Pflugerville, Texas. Hill says insurers often offer attractive, teaser rates to lure newcomers, who have just turned 65 and joined Medicare, before hiking those premiums later on. But just how easy is it to switch medigap plans, and are you still guaranteed coverage the way you were during your initial enrollment?
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Rules and Restrictions
The good news is you can switch medigap plans any time and not just during Medicare's annual open enrollment from Oct. 15 to Dec. 7. The bad news is you aren't guaranteed to qualify for a different plan, including one with the same letter. That guaranteed acceptance, regardless of your health, only lasts for the six months after you turn 65 and first sign up for Medicare Part B.
After that, medical underwiting applies. Most applicants are "likely to qualify for a new plan, unless they have something serious like diabetes or a heart condition," Hill says. The decision will vary by insurer. You could be denied coverage outright, accepted but charged a higher premium, or face a waiting period of up to six months after you enroll before a preexisting condition is covered. During that time, only Parts A and B would cover the condition, leaving you to foot the bill for any coverage gaps.
A few states, such as California, Massachusetts and New York, make it easier to switch plans and still qualify for coverage. But even these states "usually have limits to ensure that people can only switch to equal or lesser coverage, not to upgrade their coverage," says Louise Norris, an author with medicareresources.org.
You are also guaranteed coverage if you must switch medigap plans through no fault of your own -- for instance, if your insurer goes bankrupt. Otherwise, acceptance isn't guaranteed, so don't cancel an existing policy until you're sure you've qualified for a new one.
Medicare Advantage Exceptions
The same medigap underwriting restrictions also apply if you switch to traditional Medicare from its private insurance alternative, a Medicare Advantage plan, also known as Part C, with three notable exceptions.
If you signed up for an Advantage plan right after joining Medicare, you have a 12-month trial window, and the same is true if you have a medigap plan and drop it to join Medicare Advantage for the very first time. During that trial window "you can leave your Advantage plan, switch to original Medicare, and you'll have limited guaranteed-issue access to medigap," says Norris. You'll be allowed to switch back to your previous medigap plan, or if you didn't have one before, sign up for any medigap plan in your area.
If you move to a place not covered by your Advantage plan or the insurer stops providing coverage, you get another medigap guaranteed-issue period. But medigap enrollees who move to another region don't because medigap plans offer nationwide coverage.
Outside of these exceptions, Advantage plan members who switch to traditional Medicare and want a medigap plan will face underwriting. What's more, Advantage policyholders will only be allowed to switch at set times: during traditional Medicare's open enrollment each fall and Medicare Advantage's annual open enrollment from Jan. 1 to March 31.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
By Joey Solitro Published
-
Another Analyst Moves to the Sidelines on Tesla Stock After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
By Joey Solitro Published
-
What Does Medicare Not Cover? Seven Things You Should Know
Healthy Living on a Budget Medicare Part A and Part B leave gaps in your health care coverage. But Medicare Advantage has problems, too.
By Donna LeValley Published
-
13 Smart Estate Planning Moves
retirement Follow this estate planning checklist for you (and your heirs) to hold on to more of your hard-earned money.
By Janet Kidd Stewart Published
-
Medicare Basics: 11 Things You Need to Know
Medicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
By Catherine Siskos Last updated
-
Six of the Worst Assets to Inherit
inheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
By David Rodeck Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Last updated
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Last updated
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The SIMPLE IRA contribution limit increased by $500 for 2024 and workers at small businesses can contribute up to $16,000 or $19,500 if 50 or over.
By Jackie Stewart Last updated