How medicare advantage plans work
How Medicare Supplement Plans Work with Medicare Advantage Plans
Medicare Supplement (Medigap or MedSup) plans and Medicare Advantage (Part C or MA) plans offer different coverage benefits at varying costs and cannot not work together. Generally, insurance companies cannot sell Medigap policies to beneficiaries who already have coverage through an MA plan or Medicaid. The major difference between the two is that Medigap coverage works with a beneficiary’s existing benefits and can cover the gaps in Original Medicare coverage, while MA coverage provides beneficiaries with all their benefits and may include Part D prescription drug coverage .
The following are some situations that beneficiaries may find themselves in when deciding between these a Medicare Supplement plan and a Medicare Advantage plan:
1. Age 65 or older and recently enrolled in Part A and B, but not sure which plan to join
When beneficiaries turn 65 and first become enrolled in both parts of Original Medicare, they fall into their six-month Medigap Open Enrollment Period (OEP), which starts the first day of the month they are both age 65 or older and enrolled in Part B. This may be the best time to buy a Medigap policy because if a beneficiary decides to enroll after this time, their options may be limited and they may have to pay more for coverage. At the same time, beneficiaries also fall into their Initial Enrollment Period (IEP), which runs for seven months starting three months before they turn age 65 and lasts until three months afterwards. During this time, beneficiaries can sign up for any MA or Part D plan that contracts in the county and state in which they reside.
Deciding on which plan is right depends on a beneficiary’s own health needs and budget; however, keep in mind that a beneficiary’s Medigap OEP is one of the only times an insurance company cannot refuse to sell any Medigap policies that it offers. Beneficiaries can request Medigap enrollment at any time, but they may be subject to medical underwriting and refused enrollment. On the other hand, outside of the Initial Enrollment Period, beneficiaries can only sign up for MA coverage during the Annual Enrollment Period (AEP) or other Special Enrollment Periods without medical underwriting or a medical exam, as long as they do not have End-Stage Renal Disease (ESRD).
2. Under age 65 and recently enrolled in Part A and B, but not sure which plan to join
Federal law does not require insurance companies to sell Medicare Supplement Insurance
to individuals under the age of 65. However, some states have different requirements and may demand that Medigap insurers offer certain plans to individuals younger than 65 years of age. These states include, but are not limited to, California. Florida. and Texas. Keep in mind that any beneficiary enrolling in a Medigap plan under the age of 65 is subject to medical underwriting and may pay high plan rates. Hence, an MA plan could potentially be a more affordable option until a beneficiary turns age 65 and is able to enroll during their Medigap Open Enrollment Period.
3. Enrolled in a Medicare Advantage plan, but interested in a Medigap policy
While enrolled in an MA plan, beneficiaries cannot use nor be sold a Medicare Supplement Insurance policy, unless they decide to switch back to Original Medicare. Hence, beneficiaries may want to drop their Medigap coverage before joining an MA plan. For those who decide to switch back, they will want to find out what plans are available in their area and compare Medigap plans to find the right plan for them before contacting their MA insurer for disenrollment. They will need to then let their Medigap insurer know the date their MA plan coverage ends.
First-time MA enrollees who are not happy with their coverage have a special guaranteed issue right to buy any Medigap policy only if they decide to switch back within their first year of joining. This special right allows them to buy any Medigap policy sold within their state by any insurance company. Additionally, if they were enrolled in a Medigap policy previously, they may be able to get the same policy back if the company still offers the plan.
4. Enrolled in a Medigap policy, but interested in a Medicare Advantage plan
Generally, these two types of plans cannot work together. Even if a beneficiary were enrolled in both plans, a Medigap policy cannot be used to pay for any out-of-pocket expenses incurred due to MA coverage, such as premiums, deductibles, coinsurance, and copayments. Beneficiaries may want to cancel their Medigap policies by contacting their insurer. However, keep in mind that if a Medigap policy is dropped, they may not be able to get it back afterwards.
For those who are still undecided between a Medicare Advantage plan versus a Medicare Supplement plan, please visit our previous post on how to decide which Medicare plan is right for you .
Which would you choose: a Medicare Supplement plan or a Medicare Advantage plan?
Medicare has neither reviewed nor endorsed this information.Source: blog.planprescriber.com