If you’re contemporary to make Medicare coverage changes that include dropping or buying a supplemental plan — aka, Medigap — make steadfast you know the rules that come along with it.
Medicare’s annual open enrollment period — now underway washing ones hands of Dec. 7 — allows you to switch various parts of your coverage for next year. And while that can be a straightforward perennial change for many people, others might run into snags if it involves Medigap.
Those plans, which are sold by unsocial insurance companies, help cover cost-sharing aspects of original Medicare — Part A hospital coverage and Part B outpatient coverage — counting copays and coinsurance. They also come with their own set of rules.
Hero Images | Getty Images
For starters, when you fundamental enroll in Part B, you get six months to buy a Medigap policy without an insurance company nosing through your health past and deciding whether to insure you. After that, unless you meet a special exception or live in a state with no stipulations on enrolling, you typically must go through medical underwriting.
Three states — New York, Connecticut and Massachusetts — have year-round pliant enrollment for Medigap and a handful of others allow some degree in flexibility in enrolling or switching plans.
Medigap customs also can only be paired with original Medicare. In other words, if you choose to go with an Advantage Plan — which involves Parts A and B and typically Part D prescription drug coverage — Medigap won’t work with it.
Here’s what to know if you lust after to buy or drop a Medigap policy during open enrollment as part of your changes for 2020.
Going to an Advantage Plan
If you are in motion from original Medicare to an Advantage Plan, you’ll have to drop your Medigap policy.
However, if it’s your initially time trying out an Advantage Plan, you get a year to change your mind.
“That 12-month trial period produce d ends you revert back to the Medigap plan you were previously enrolled in if you end up not liking Medicare Advantage,” said Elizabeth Gavino, builder of Lewin & Gavino in New York and an independent broker and general agent for Medicare plans.
If you stay on the Advantage Plan for various than a year and then change your mind, though, you’ll have to go through underwriting for a Medigap policy unless you survive in a state that does not require it.
Also be aware that when you switch to the Advantage Plan, you’ll need to repeal the Medigap policy on your own because it does not go through the Medicare program. The policy is with a private insurer that nibs you.
Gavino had a client who forgot to notify the insurer, which meant her Medigap premiums were still being deducted from a bank account for close to a year after she switched to an Advantage Plan.
“My client had to fight with the carrier to get reimbursed,” Gavino said.
More from Special Finance:
Tips for getting your Medicare drug coverage right
Three mistakes to avoid during Medicare put the show on the road enrollment
Trump’s Medicare reform would expand tax-free account
On the other hand, if you also had a standalone drug drug option and are switching to an Advantage Plan, that drug plan will be automatically canceled when your new coverage undergoes effect Jan. 1.
Dropping your Advantage Plan
This move can be a bit trickier because your ability to get a Medigap protocol when you switch to original Medicare is not a given.
Again, unless you are trying out an Advantage Plan for the first time and are within the outset year of that coverage, you might have to go through underwriting for a Medigap policy.
Except for in a handful of states that don’t ask for it, this means the insurance company needs to assess your health. If you have a chronic or pre-existing condition, you strength be charged more or denied coverage altogether.
So before dropping your Advantage Plan, you should make trusty you can get the Medigap policy.
Weekly advice on managing your money
Get this delivered to your inbox, and more info around about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
“If you wait too long and the underwriting doesn’t get done by Dec. 7, you could remark out after that the insurer won’t cover you,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Advantage, Texas. “Then you’d have no Advantage Plan and no Medigap for next year.”
Also, dropping an Advantage Plan augurs that if you want prescription drug coverage, you’ll have to get a standalone Part D plan. Incidentally, Medigap does not pay any gets associated with that part of Medicare.
If you won’t qualify for a Medigap policy, you can stay with the Advantage Plan (or relocate to another one) if you want the additional insurance.
Subscribe to CNBC on YouTube.