Here’s what you need to know to switch Medicare supplement plans, including why, when and how.
This article is based on reporting that features expert sources.
If you aren’t happy with your current Medicare supplement plan or are feeling overwhelmed by choosing a plan, you’ll find comfort in knowing that it’s possible to switch Medicare supplement plans. You aren’t stuck with your current plan forever. Medicare supplement plans help to cover costs associated with Medicare, the federal government’s health insurance plan for those age 65 and over. Medicare options can get confusing, but it’s worth taking the time to compare prices and benefits of the plans you use, including supplement plans.
Medicare has several parts:
- Part A: Inpatient hospital coverage, skilled nursing facility care, home health care and hospice. There’s a deductible, or an amount of money you must pay, associated with Part A based on the number of days you stay at a hospital or skilled nursing facility.
- Part B: Health care provider visits, imaging and labs. There’s a monthly premium of $164.90 and an annual deductible of $226 associated with Part B. These amounts may change annually. After the deductible is met, Medicare pays 80%, and you pay 20%.
What is a Medicare Supplement Plan?
Medicare supplement plans work hand-in-glove with Medicare parts A and B to cover some or all of the deductibles, copays and coinsurance that consumers must pay.
“These are the gaps in original Medicare coverage, which is why a Medicare supplement is also called a Medigap plan,” says Matthew Claassen, CEO of the insurance agency Medigap Seminars in Jupiter, Florida.
With a Medicare supplement plan, you can see any health care provider in the U.S. that takes Medicare. No referrals are needed.
There are several different Medicare supplement plans, and they each have a lettered name:
A, B, C, D, F, G, K, L, M and N. Plans F, G and N are the most commonly-used supplement plans. Massachusetts, Minnesota and Wisconsin have state-standardized supplement plans instead of the lettered plans.
The benefits of Medicare supplement plans are standardized by law. With the exception of the three states above, all plans of the same type have the same base benefits no matter where you live.
Popular Medicare Supplement Plans
One popular Medicare supplement plan, Plan F, is no longer available to new people signing up for Medicare. However, if you turned 65 before Jan. 1, 2020, and you didn’t sign up for Medicare before now, there is an exception for you. For example, if you are 70 now and previously had health insurance through your job, but are now retired, you can still qualify for Plan F.
“Supplement Plan G is probably the most popular option for newly enrolling beneficiaries today,” says Fran Soistman, CEO of eHealth, an online brokerage for Medicare in Santa Clara, California. “It provides robust coverage, differing from Plan F only in not offering coverage for your original Medicare Part B deductible.”
Here’s an example of the benefits associated with Plan G:
- Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up.
- Part B coinsurance or copayment.
- Blood (first three pints).
- Hospice care coinsurance or copayment.
- Skilled nursing facility care coinsurance.
- Part A deductible.
- Part B excess charge. This refers to a charge from a provider beyond the Medicare-approved amount.
- 80% of the cost of health care costs incurred while traveling in a foreign country, up until your plan’s limits.
The cost for Medicare supplements will vary based on the company you use and the state where you live. One range-of-cost example for Plan G is $170 to $250 a month, according to Marci Hodge, an insurance agent and president of Faithful Financial Health & Life, LLC, in Deland, Florida. Costs differ by company and by state. Expect costs to change year to year.
In lieu of Medicare supplement plans, there are HMO and PPO plans available under Medicare C, also called Medicare Advantage plans. Medicare supplement plans typically cost more than Medicare Advantage, but they also cover more.
Why Might You Change Supplement Plans?
The biggest reason someone would change their Medicare supplement plan is to lower costs, Hodge says. A variety of insurance companies offer Medicare supplement plans, and you may find a plan that’s more affordable from a different company.
Costs also differ by state due to each state’s specific Medicare regulations.
“A 65-year-old in Georgia can get a Plan G for about $100 a month. That exact same plan can cost $250 to $300 in places like south Florida or New York,” Claassen says.
You may also decide to change plans if you would like more benefits or you feel you’re paying for benefits you don’t need.
One downside of changing supplement plans is that the new carrier will likely require you to answer health questions to see if you qualify. This means they could choose not to offer you a plan because of certain health conditions. If you work with an experienced insurance agent to help select a supplement plan, they can forewarn you of a potential denial before you apply.
“When assessing if a plan is still right for you, ask yourself how often you use each benefit, what you find most important and if the plan is still affordable,” advises Jeff Collins, vice president of government programs at MVP Health Care, based in Albany, New York.
When Can You Change Medicare Supplement Plans?
At the beginning of the month when you will turn 65, there’s a six-month Medigap Open Enrollment period. During this time, you can select a Medicare supplement plan as long as you’re also signed up for Medicare Parts A and B. One advantage of enrolling with a supplement plan during this time is that you can apply for a policy without the insurance company asking health questions that would otherwise deny you coverage. The process of asking health questions and reviewing your health history is also called medical underwriting.
Medicare.gov has an interactive tool to help you determine if you can switch your Medigap policy or if or when you qualify to switch from an Advantage plan to a supplement. This information can help you find out when exactly you can change plans.
What Is Guaranteed Issue?
Experts typically advise switching plans only if you have guaranteed issue rights. This means that you can get a new policy and it will cover your pre-existing conditions, such as diabetes or chronic obstructive pulmonary disorder. With guaranteed issue rights, you can’t be denied coverage, and the plan can’t charge you more based on pre-existing conditions.
Here are a few examples of guaranteed issue rights when it comes to the supplement plans:
- When you sign up for a plan during the Medigap Open Enrollment Period.
- If you’re moving outside the current coverage area of your Medicare Advantage or Medicare Select plan.
- If the company you’re currently using for coverage goes bankrupt or ends through no fault of your own.
- When you have a Medicare Advantage plan that will no longer cover people where you live.
Without guaranteed issue, a new supplement carrier could deny coverage or charge a lot for plans. Double check how state laws affect guaranteed issue.
Even though carriers can’t deny you coverage with guaranteed issue rights, there still may be a six-month waiting period before the carrier will cover your pre-existing conditions. This is something to ask about when identifying a new plan and to budget for accordingly as needed.
A Medicare supplement insurer may deny coverage for conditions such as:
- Alzheimer’s disease.
- Chronic heart disease.
- Parkinson’s disease.
- Recent cancer.
- Uncontrolled diabetes.
What You Need to Change Plans
Once you know what plan you want, changing Medicare supplement plans is easy.
As you fill out an application, have the following items with you to apply to change Medicare supplement plans:
- Your Medicare identification number.
- Your Social Security number.
- The date that your Medicare Part A and B plans went into effect.
- Your primary care provider’s name and address.
Once you apply, you’ll likely hear back within a week or two on their decision to accept or decline your application.
Final Tips on Choosing Your Medicare Supplement Plan
1. Start your research early. If possible, look into potential plans before you turn 65, Soistman advises. With some carriers, you can even submit an application 90 days before you turn 65.
2. Be wary of TV ads and other solicitations regarding Medicare supplement and Advantage plans. The amount of marketing geared toward older adults to change their Medicare supplement and Advantage plans is overwhelming, Hodge says. The plans that they advertise may not be right for your specific health needs and your budget.
3. Speak with a trusted insurance agent who works regularly with Medicare. They will know the current options available and any associated pros and cons. There’s no extra cost for working with a licensed agent to select your Medicare supplement plan. Find an agent who offers multiple plan options from competing insurance companies, Soistman advises.
4. Select a supplement plan that you would want to have when you’re sick or injured. That’s because once you are actually sick or injured, you won’t be able to change plans.
5. Take advantage of resources that supplement plans may offer for pre-existing conditions such as diabetes. These include one-on-one support and programs that connect you to meal planning and wellness programs.
6. Inquire about supplement plans in your state if you’re under age 65 but have Medicare due to long-term disability, ALS or end-stage renal disease. Supplement plans could help with your costs, although Claassen cautions that not all states will offer supplement plans to those under age 65. The costs could vary widely as well. Still, it’s worth inquiring.