The Medigap Enrollment Guide
Medigap (also known as Medicare Supplement) is one of two types of supplemental Medicare insurance that help limit the financial risk of healthcare needs for Medicare beneficiaries. Medigap got its name because it helps fill the gaps in costs not covered by Original Medicare. As such, it does an incredible job of mitigating the costs of services covered under Original Medicare.
When can you enroll in a Medicare Supplement plan?
Technically, you can enroll in a Medigap plan anytime—but your application may be denied if you don’t enroll within a guaranteed issue period. Your first guaranteed issue period is during your Medigap Open Enrollment Period, which applies to all new Medicare beneficiaries. Other guaranteed issue periods have specific qualifications. Let’s dive into the details.
Medigap Open Enrollment Period
The Medigap Open Enrollment Period, not to be confused with the Medicare Open Enrollment Period or the Medicare Advantage Open Enrollment Period, is typically the first 6 months that you have Part B coverage. During the Initial Enrollment Period, carriers cannot ask you about your current or historical health, they cannot deny you coverage, and they cannot charge you a different rate based on anything but your tobacco smoking status (and some states even prohibit them from asking about your tobacco use).
At Chapter, we generally recommend signing up for a Medigap plan during your Medigap Open Enrollment Period if you can afford it because it may be your only opportunity to be guaranteed acceptance into a Medigap plan.
Guaranteed Issue Periods
During the Medigap Open Enrollment Period, you are guaranteed acceptance into plans due to your open enrollment right. If you missed your Medigap Open Enrollment Period or decide that you want to enroll in Medigap later on, there are some additional guaranteed issue rights to consider.
| Current Coverage | Guaranteed Issue Right |
|---|---|
| Original Medicare |
|
| Medicare Advantage |
|
| Employer-sponsored supplemental (retiree) coverage |
|
| Medigap |
|
*Trial rights apply when you disenroll from a Medicare Advantage plan within a year of either:
Canceling your Medigap plan to join a Medicare Advantage plan
Enrolling in a Medicare Advantage plan during your first year on Medicare
Anytime, with medical underwriting
As we said at the beginning of this section, technically, you can enroll in or switch your Medigap plan anytime—but there’s a catch. If you apply for a Medigap plan outside a guaranteed issue period, you will need to go through medical underwriting.
During medical underwriting, insurance companies ask questions about your health status to determine whether to offer you coverage, at what price, and with what exclusions or limits. Usually, you’ll be issued a plan if you answer no to all of the underwriting questions and don’t have any drugs on a carrier’s declinable drug list.
One important note for those on a Medicare Advantage plan: You cannot switch to a Medigap plan via underwriting any time you want because you can only drop your Medicare Advantage plan during the Medicare Open Enrollment Period or Medicare Advantage Open Enrollment Period—and you cannot be on an Advantage plan and Medigap plan at the same time.
State-specific enrollment rules
Many guaranteed issue rights are federal, but some states have exceptions that offer more flexibility to enroll in or switch Medigap plans.
Connecticut, Massachusetts, Maine, and New York have continuous or annual guaranteed issue protections. So, in these states, regardless of your medical history, insurance carriers are prohibited from denying a Medigap policy to those on Original Medicare.
The birthday rule allows those on a Medigap plan to switch from one plan to another without medical underwriting. Applicants have to make the switch within a designated period around their birthday (varies by state), and they can only switch to a plan with an equal or lower level of coverage.
The birthday rule is currently applicable in the following states:
Missouri has a Medigap anniversary rule, which works similarly to the birthday rule. Using the anniversary rule, you can switch your carrier 30 days before and 30 days after your policy’s annual anniversary date. During this time, you can switch carriers, but you cannot switch plan types (e.g., if you’re on a Medicare Plan G, you can only switch to a different Plan G with a different carrier).
Why Medigap?
For those who can afford it, we recommend Medigap plans for three key reasons.
Limited costs
Statistically, we’re likely to incur more medical costs as we age. There are 10 different types of Medigap plans, and while each type works a little differently, they all cover a significant portion of the 20% of costs not covered by Original Medicare.
One of my favorite excerpts from our resident Medicare expert, Ari Parker’s book, is a personal example concerning his mother.
My mother’s outpatient knee replacement would have cost $8,000 out of pocket had she not secured Medigap insurance. Instead, on her Plan G, she reached the $233 Part B annual deductible and did not owe a penny more.
If you haven’t read the book, I highly recommend it for a short and sweet explanation of Medicare that helps guide you through three critical Medicare decisions.
No network limitations
93% of healthcare providers accept Original Medicare and, on a Medigap plan, you can see any doctor who accepts Original Medicare without a referral. This makes Medigap even more valuable to people who travel a lot domestically (that includes you, snowbirds!) or have certain specialists they want to see.
Why do many Medicare beneficiaries not choose Medigap?
If Medigap plans are so great, why isn’t everyone on Medigap?
Higher premiums
Medigap plans do an incredible job of limiting beneficiaries’ healthcare costs. Because of this, the cost of premiums for someone on Original Medicare + Medigap is typically higher than for someone on a Medicare Advantage plan. In fact, many people are on premium-free Medicare Advantage plans that help them control their unavoidable monthly costs.
Health status
The younger you are, the lower your medical costs. This is because we are more likely to develop medical conditions that require healthcare services as we age. So, when you’re new to Medicare, you may find it difficult to justify a higher premium when your costs are already limited by your health.
Guaranteed issue periods are limited
In case we haven’t stressed this enough, you may have difficulty enrolling in a Medigap plan outside your Medigap Open Enrollment Period. Some people, who would like to enroll in Medigap plans later in life, are unable to because they don’t have a guaranteed issue right and cannot pass medical underwriting.
How to enroll in a Medigap plan
Comparing Medigap options is important because while all plans of the same type (e.g., all Plan Gs) are required to provide the same exact coverage, their premiums differ based on where you live, insurance carrier pricing, your age and gender, and your smoking status.
If you want to enroll in a Medigap plan, switch to a Medigap plan, or ask questions to help you make a decision about your Medicare coverage, a Chapter Medicare Advisor can help! Our licensed Advisors can answer your questions, compare plan costs, and help you feel confident in the coverage you choose. Mind the gap—schedule an appointment with an Advisor today!