Medicare Your Coverage Options

Your right to buy Medigap coverage

Written by Diane Archer

People with Medicare have the right to switch Medicare plans, from a Medicare Advantage plan to traditional Medicare or vice versa, every year during the Fall open enrollment period. But, inexplicably, people do not have a right to buy Medigap coverage, supplemental coverage to fill gaps in Medicare, whenever they sign up for traditional Medicare. Without supplemental coverage, either Medigap, Medicaid or retiree coverage, you have no protection against catastrophic costs in traditional Medicare. A new Kaiser Family Foundation brief explains the issue in detail.

Under federal law, only people first enrolling in traditional Medicare at 65 or later have the right to buy a Medigap policy. People under 65 with disabilities enrolled in Medicare do not have that right. In fact, only five percent of them have a Medigap policy. (Even though insurers do not have to sell them a policy, some do.) Most (46 percent) have Medicaid. And, 17 percent have employer coverage to fill gaps.

People in a Medicare Advantage plan who want to switch to traditional Medicare also have no guaranteed right to buy a Medigap policy under federal law. Curiously, Congress gives these people the right to switch to traditional Medicare during the Fall Open Enrollment period but no limit on their out-of-pocket costs in traditional Medicare and no right to buy coverage to protect themselves against catastrophic costs.

States have the right to guarantee their residents broader Medigap protections than the federal government. But, most states have never been good at protecting consumers in the health insurance marketplace. So, in most states, you should not assume you can get a Medigap policy if you do not get it when you first enroll in Medicare at 65 or later. Though, twenty-eight states do guarantee people the right to buy a Medigap policy if their employer retiree benefits change.

If you want to sign up for traditional Medicare during the fall open enrollment season, keep in mind that some insurers are willing to sell people Medigap coverage even though they are not required to do so. AARP plans are often available to people. Contact your state health insurance assistance program or SHIP at 1-800-677-1116 for free advice on whether there are Medigap companies in your state that will sell you coverage.

Four states give people the guaranteed right to buy a Medigap policy, regardless of their health status. Connecticut, Massachusetts, Maine and New York protect people with Medicare. In these states insurers must sell you a Medigap policy even if you have a pre-existing condition. These states also require “community rating” of Medigap policies so that regardless of your age or health, everyone pays the same premium.

Congress imposed a catastrophic out-of-pocket limit in Medicare Advantage plans, of no more than $6,700, in recognition of the need to give people enrolled in these plans some health and financial security. Congress should impose an out-of-pocket limit in traditional Medicare–or, better still, eliminate deductibles and coinsurance–to protect people in traditional Medicare. Congress should also require Medigap plans in all states to guarantee coverage to everyone during the Fall open Enrollment period and charge everyone the same amount. After all traditional Medicare and Medicare Advantage plans are all community rated–everyone pays the same premium for their policy.

Here’s more from Just Care:

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