Seniors enrolled in a Medicare Advantage plan who move to a new state (or sometimes another county), can get a Medicare supplement with “guaranteed issue”. Medicare supplements are also knows as “Medigap” plans because they fill the gaps in Medicare.
Medicare says that when people are required to change their Advantage plan because of a move, they can apply for a Medicare supplement and not have to worry about the medical questions. And they cannot be rejected, or charged a higher premium because of serious health problems. This is called “guaranteed issue”.
I got a call recently from a woman whose in-laws are moving from Phoenix to Tucson to be closer to their family. The in-laws are in their 90’s and have lots of health problems. They are currently enrolled in a Medicare Advantage plan, so I explained their two options for their Medicare coverage when they move to Tucson.
1) They could enroll in a Medicare Advantage plan in Tucson. But they must find a primary care physician (PCP) whose name must be put on the Advantage plan application. This is because just about all of the Medicare Advantage plans in Tucson are HMOs and require PCPs to get referrals to see specialists.
2) They can enroll in a Medicare supplement and a stand-alone Part D plan. They cannot be refused the Medicare supplement or be charged a higher premium than is standard for their age. They won’t need to have a Primary Care Physician because Medicare does not require referrals to see specialists (or prior authorization for tests and procedures).
When the Medigap application is submitted, they must already have a cancellation letter from their Medicare Advantage plan, so they should get moving early in the month before they need their new coverage to begin.
Medicare Advantage plans in Tucson have $0 premium and include Part D, so they look like a really good deal compared to paying $231 per month for a Plan F Medicare supplement. But Plan F fills every gap in Medicare, so if the in-laws need lots of medical care each month, they might be better off paying this higher price.
These folks will also need to enroll in a stand-alone Part D plan, and premiums range from $15 – $90 per month. The Part D plan they choose will depend on the prescriptions they take.
PAY-IN-ADVANCE vs PAY-AS-YOU-GO
I call Medicare supplements the pay-in-advance” system. You pay a premium each month and then have few co-pays (or no co-pays) when you need medical care.
I say Medicare Advantage is a pay-as-you-go system because you may not have a monthly premium, but you pay as you go to the doctor, or go for lab work. You pay when you end up in the hospital, and you seriously pay if you need cancer treatment.
For some people, their Medicare Advantage cancellation will turn out to be a very good thing because they can go back to Original Medicare and get Medicare supplement with guaranteed issue. Without guaranteed issue, these folks might not be able to get a Medicare supplement. So they have a one-time opportunity to make a major change to their Medicare coverage.
NOTE: Some states have rules that require insurance companies to “guarantee issue” for Medicare supplements no matter how old a person is, or what their health situation is. I know California and Connecticut have such rules. But Arizona allows insurance companies to reject people who apply for a Medigap plan outside their initial enrollment period when they turn 65 or first get Medicare Part B.
For a better understanding of Medicare supplements and Medicare Advantage, see my video: Intro To Your Medicare Choices