There may be times when it makes sense to switch or give up your Medigap plan

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If you have a Medicare supplement plan — also known as a Medigap — there may be times when it’s worth making sure it’s still the best for you.

Medigap policies are standardized — namesake plans offer identical benefits regardless of which private insurance company sells them — but premiums vary by plan, insurer, and location. And while some beneficiaries face modest annual price increases, others may experience steeper jumps.

“For some fixed-income beneficiaries, a large premium increase can disrupt their budget,” said Elizabeth Gavino, founder of Lewin & Gavino and independent broker and general agent for Medicare plans.

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About 14.6 million, or 23%, of Medicare’s 63.8 million beneficiaries use Medigap plans alongside Basic Medicare, which consists of Part A (hospital insurance) and Part B (outpatient care). These policies at least partially cover the associated cost-sharing aspects—deductibles, co-payments, and coinsurance—and generally allow you to see any doctor (or other healthcare provider) that accepts Medicare.

They are separate from – and cannot be used in conjunction with – private benefit plans. About 40% of Medicare beneficiaries elect to have Parts A and B delivered through these plans, which typically include Part D prescription drug coverage. They also come with their own co-payments, deductibles, and other co-payments.

Available Medigap policies are labeled A, B, C, D, F, G, K, L, M and N, each offering a different level of coverage. For example, they may pay the full Part A deductible ($1,556 in 2022 for each benefit period) while others do not. The Centers for Medicare & Medicaid Services have a table on their website showing the differences.

However, not every plan is available in all states. And Plans C and F are not available to anyone who is newly eligible for Medicare in 2020 or later.

Medigap plans also don’t cover expenses related to prescription drug coverage (unless the policy may have been issued before 2006), meaning you’ll need to purchase a standalone Part D plan if you want your medication are covered. Nor will they help you pay for services that are generally excluded from Medicare coverage, such as B. dental treatment or visual disturbances.

The amount of the premium depends on various factors, including the insurer and where you live. A 65-year-old woman in Dallas could pay less than $100 a month for Plan G, according to the American Association for Medicare Supplement Insurance, while the same person in New York would pay $278. And generally, these premiums increase over time.

Sometimes they may pay for Cadillac coverage that they don’t use when they may be better off with a high deductible surcharge [Advantage Plan].

Elizabeth Gavin

Founder of Lewin & Gavino

For anyone experiencing an unmanageable increase or otherwise finding that the cost of their policy is more than they can handle, there may be a more suitable option.

You can take out a Medigap policy all year round. Note, however, that while you have six months when you first enroll in Part B to get a Medigap plan without health insurance, that’s not always the case outside of that window.

Depending on your state’s Medigap enrollment laws, “applying to a new carrier can mean answering health questions and going through medical insurance,” said Danielle Roberts, co-founder of insurance company Boomer Benefits. “Therefore, in many states, your approval of the new policy is dependent on your ability to pass the underwriting.”

If that’s not an impediment, you could see if another insurer is offering the same Medigap plan for less, Roberts said.

You may also want to see if a different Medigap policy would be better overall, or if switching to an Advantage plan is warranted.

“Sometimes they might pay for Cadillac insurance that they don’t use when they’re better suited for a high deductible surcharge or a [Advantage Plan]’ Gavino said.

benefit plans

If you’re considering an Advantage plan to replace Medigap, note that you generally need to enroll during the fall enrollment open period (October 15 through December 7), with coverage effective January 1.

When you try an Advantage Plan for the first time, you also get a 12-month trial period. That means if it doesn’t fit, you can generally return to your Medigap policy within that year without worrying about health insurance.

Though Advantage plans often don’t have a monthly fee — though you’d still pay your Part B premium, which is $170.10 for 2022 — they too have some limitations.

These plans generally have much lower premiums, but the trade-off is that there are things like networking and prior approvals to deal with.

Danielle Roberts

Co-founder of Boomer Benefits

“These plans generally have much lower premiums, but the trade-off is there are things like networking and prior approvals that you have to deal with,” Roberts said.

And you pay for things like co-payments and coinsurance as you go.

This means that during years when you don’t use health services frequently, you may spend less than you would with a Medigap plan.

“But in years of regular treatment, you could potentially spend more out of pocket on an Advantage plan than you did on your previous Medigap plan,” Roberts said.

“We see many people who love their Advantage plans while they are healthy, but are less happy later on when they see more frequent doctor visits for a new health condition or begin treatment for something chronic and/or expensive,” said Roberts.

“So read the fine print and make sure you understand your share of the medical costs before signing up,” she said. There may be times when it makes sense to switch or give up your Medigap plan

Gary B. Graves

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