How Do I Switch from Medicare Advantage to Medigap?

Many people get into a Medicare Advantage plan believing it will cost less than Original Medicare. For some people, it works out that way. For others, it doesn’t.

When it doesn’t, Medigap may be a better solution.

If you have discovered the difference between Medicare Supplements and Medicare Advantage and want to switch, you have two options. You can switch from Medicare Advantage to Medigap if you are within your trial right period. You may also be able to switch during two Medicare enrollment periods.

In this article, we will walk through your trial right, other Medigap protections, and when you can switch from Medicare Advantage to Original Medicare.

Can I Switch from a Medicare Advantage Plan Back to Original Medicare?

Yes. However, there are certain enrollment periods and restrictions.

In most cases, you can only make plan changes during certain times. Medicare has an Open Enrollment Period every fall. During this annual enrollment period, Medicare beneficiaries can join, change, or drop a Medicare Advantage plan. This enrollment period begins October 15 and ends December 7.

There is a second Medicare Advantage Open Enrollment Period from January 1 through March 31. During this period, beneficiaries enrolled in a Medicare Advantage plan can change plans or go back to Original Medicare.

Can I Switch from a Medicare Advantage Plan to a Medigap Plan?

Maybe.

A Medigap policy is not health insurance. It is a form of indemnity insurance that helps pay some of the costs of Original Medicare.

To buy a Medigap policy, you must be enrolled in both Medicare Part A (hospital insurance) and Medicare Part B (medical coverage). Then you can apply for Medigap coverage.

However, private insurance companies may not approve your application. It all depends on three things:

1. Your guaranteed issue rights;
2. Your Medicare Advantage trial right; and
3. Your health history.

What is the Medicare Advantage Trial Right?

The first time you join a Medicare Advantage plan, Medicare gives you a special privilege. It is your “trial right”.

If you join a Medicare Advantage plan and you aren’t happy with the plan, federal law gives you the right to switch plans back to Original Medicare. When you do, you can buy a Medigap policy. However, you must make the switch within the first 12 months of joining the Medicare Advantage plan.

You can do this if you got a Medicare Advantage plan at age 65. You can also do it if you had a Medicare Supplement and then decided to try Medicare Advantage.

If you had a Medicare Supplement plan before your trial right began, you have the right to ask your insurance company to reissue the policy. If not, you can apply for a new policy.

When Do I Have Guaranteed Issue Rights?

When you first sign up for Medicare at age 65, you have certain Medigap protections. The most important protection is your guaranteed right to purchase Medicare Supplement Insurance.

Your guaranteed issue rights start the month you enroll in Medicare Part B and end 6 calendar months later. This is your Medigap Open Enrollment Period. When this open enrollment period is over, so is your right to buy a Medigap policy without medical underwriting.

Can I Be Denied Medigap Coverage?

Yes. When your guaranteed issue rights expire, after your initial enrollment period, you can be turned down for coverage.

A Medigap policy isn’t health insurance, so insurance carriers are not required to follow the same rules. Specifically, you can be denied coverage due to a pre-existing condition.

Unlike Medicare Advantage plans, which cannot deny coverage based on your health conditions, insurance companies that sell Medigap policies can.

Is a Medigap Plan Better Than an Advantage Plan?

Maybe.

Most insurance experts agree that Original Medicare, combined with a Medigap policy and a Medicare prescription drug plan (Part D), is the best coverage you can get. That said, many Medicare Advantage plans offer additional benefits, such as routine dental or vision care, transportation, and other healthcare services.

When “Better” Means More Coverage

Medicare covers about 80% of all major healthcare costs. The remaining costs are paid by the Medicare beneficiary through various deductibles, copays, and coinsurance costs when they use approved healthcare services.

Medicare Advantage plans work the same way. Only, each plan sets its own rules, restrictions, and costs. And, you can’t buy more coverage for Medicare Advantage. A Medigap policy only works with Original Medicare.

If you want more coverage on Medicare’s out-of-pocket costs, you buy a Medigap plan. There are 10 standardized plans (A through N). Each plan covers different costs. The best way to compare what each Medigap plan covers is to look at a chart:

All Medigap plans cover the Part A coinsurance and most plans cover some or all of the $1,632 Part A deductible. This is a benefit period deductible that you pay everytime you have a hospital stay (unless you are readmitted withing 60 days for a related issue).

All Medicare Supplement plans cover some or all of the 20% Medicare Part B coinsurance. And a couple of plans cover Part B excess charges and the Part B deductible.

Medicare’s out-of-pocket costs can easily bankrupt you. Medicare does not have a maximum out-of-pocket limit. That’s why a Medigap policy is so important.

Medicare Advantage plans do have a maximum out-of-pocket limit. The limit applies to Part A and Part B services. This year the out-of-pocket limit on Medicare Advantage plans can be as high as $8,550. That’s unaffordable for most people.

When “Best” Means More Benefits

The advantage most people see in a private Medicare plan is the extra benefits. Most Medicare Advantage plans include prescription drug coverage. And many plans also include routine dental, vision, and hearing care.

To get additional benefits with a Medigap plan you must buy them. For instance, you can get Medicare prescription drug coverage by joining a Part D plan, but you’ll pay an additional monthly premium. You can add a separate dental and vision plan for those benefits, too.

For healthy people, who rarely use their primary healthcare benefits, Medicare Advantage plans are a good value. The monthly premiums are low, and some plans have no additional premium at all.

And, if you rarely see a doctor, outside of your annual wellness visits, you don’t incur big out-of-pocket costs. That’s why these plans are so beneficial to healthy people.

More Medicare Advantage vs. Medigap Issues

If you join a Medicare Advantage plan, it’s important to remember that you must use healthcare providers in the plan’s service area and in the plan’s provider network. Many services may also require prior authorization and/or a referral from your primary care physician.

With Original Medicare and Medigap, you can see any provider that accepts Medicare. And, you never need pre-authorization to receive a Medicare-approved service. In general, there are fewer provider limitations. And, some plans offer coverage in foreign countries.