Changing to Another Medigap Policy

By Patricia Barry

Copyright © 2015 AARP

Medigap is the private supplemental insurance you can buy to cover many of your out-of-pocket costs in traditional Medicare. If you already have a Medigap policy, you might be wondering whether you can or should switch to another and what you should know to avoid making a costly mistake.

Consumer advocates normally advise people who are about to buy Medigap for the first time to choose the best policy they can afford, just to save the hassle that upgrading to a better policy later on may involve. Still, as the years pass, you may have good reasons for wanting to change, including the following:

  • You’re paying for benefits you don’t really need.

  • You now need a policy with more benefits.

  • You’re not happy with the insurance company that issues your policy.

  • You think another policy or another company may cost you less.

Following are a few misconceptions that sometimes lead people to believe they’ll lose Medigap coverage if they don’t take some kind of action each year. To clarify:

  • Medigap insurance has no annual open enrollment periods of the kind that exist for Medicare drug and health plans, which I describe earlier in this chapter. The six-month time frame after you sign up for Part B — when you can buy Medigap with full federal protections — is sometimes referred to as “Medigap open enrollment,” but it’s actually a one-time opportunity to buy a policy with no fear of being turned down.

  • After you buy a Medigap policy, you have a guaranteed right for it to be renewed every year with no action on your part. Of course, that’s provided that you told the truth on your application and continue to pay the premiums.

  • Your Medigap insurance is good all over the country when you go to doctors and other providers who accept Medicare payment. So you need not buy a new Medigap policy if you move. (The exception is if you have a type of policy known as Medicare SELECT, which limits you to seeing providers within a local service area. But if you move away, you can buy another Medigap policy in your new home area.)

Knowing the consequences of switching Medigap policies

Be aware that federal law doesn’t give you an absolute right to switch from one Medigap policy to another. Nor do you get the same full federal guarantees that probably protected you when you bought Medigap the first time around. This caveat doesn’t mean that changing your policy is impossible. But the viability and ease of switching may depend on where you live (because some states have more consumer-friendly requirements than the feds or other states on this issue) and whether you can persuade your own or another Medigap insurer to sell you a different policy.

Before starting on the process, be aware that under federal law the insurer

  • Can’t exclude preexisting medical conditions from your coverage or require waiting periods before coverage kicks in, provided that your current policy has been in effect for six months or longer

  • Can temporarily deny coverage for any benefits in the new policy that aren’t included in your current one — but for no more than six months after the new policy takes effect

  • Can require you to pay higher premiums based on your current age and state of health

  • Can refuse to sell you a new policy

But some states provide more protections. For example, California and Oregon allow you to switch Medigap policies or insurers during a 30-day window following your birthday each year. To see Medigap rules in your own state, call your state department of insurance or visit its website.

Exploring a change of Medigap coverage

You can use the details on Medicare’s website to compare sets of benefits in different Medigap policies and find contact information for the insurers that sell them in your area. Then do the following:

  1. Decide which policy you prefer from the ten standardized policies (labeled A, B, C, D, F, G, K, L, M, and N) available to you.

  2. Call the insurance company that provides your current policy and explain that you want to switch to another.

    You’ll probably be asked to fill out an application form and answer questions about your health.

  3. If that company turns you down or you prefer to go to another insurer, make a list of others in your area that sell Medigap.

  4. Check to see which rating system each insurer uses.

    If your current policy has an attained age rating — meaning the premium goes up every birthday — note the names of those that use community rating or issue-age rating. Policies that use these systems cost less over time.

  5. Call those insurers to see whether they’d sell you the policy of your choice and, if so, ask them to quote you a price for your premium.

  6. Consider the pros and cons of switching to a new policy or sticking with the one you already have.

Exercising your right to a 30-day free look

When you apply for a new Medigap policy, you have to agree to cancel your old one. However, federal law allows you to delay this cancellation for the first 30 days after your new policy becomes effective. This free look counts as a trial period that serves as a useful consumer protection. You can use it to make sure that you’re comfortable with the new policy; if you have second thoughts, you can cancel the new policy and keep your old one. Still, you have to pay premiums for both policies during that month.