Medicare Advantage plan termination: guaranteed issue for Medigap

I wrote earlier today about the termination of the Any Any Any Medicare Advantage plan.  The 2,983 Medicare beneficiaries in Arizona who are losing their Advantage plan will have three options going forward:

1) Only Medicare – but beware

They will be moved to Original Medicare and will be automatically enrolled into a Part D plan. They can choose to stay with this coverage – but having only Medicare leaves them with some serious financial risks.  The 20% co-insurance for Part B services has no cap, meaning bills can go on and on.

Having to pay 20% of the cost of chemo and radiation therapy can quickly add up to $10,000 or more.  20% of a $10,000 emergency room bill is $2,000. (Note: Part B services include everything other than hospitalization, skilled nursing facility charges, home health care, and hospice).

2) Enroll in another Advantage plan

They will get a special election period (SEP) to enroll in another Medicare Advantage plan. They get one opportunity to enroll in another Advantage  plan up until May 31st, 2013.

3) Guaranteed issue for Medigap

They can apply for a Medicare supplement no matter what their health condition – and they will be accepted.  This is called “guaranteed issue”.

The letter they receive informing them of their Medicare Advantage plan termination will tell them about this option. A copy of the termination letter must be submitted with the Medicare supplement application.  (Note: “Medigap” is another term for “Medicare supplement” because these plans fill the gaps in Medicare.)

When a Medicare Advantage plan ceases operations, or is terminated, people enrolled in the plan have the right to buy Medigap plan A, B, C, F, K, or L that is sold by any insurance company in the state. (From the CMS publication: Choosing a Medigap Policy, page 22.)

Some Medigap details

**People with limited incomes (but over $950 per month) might consider a Medigap K or L because these plans have fairly low monthly premiums – though they do require co-insurance payments for just about every medical bill. Plan K has a $4,660 annual cap on a person’s out-of-pocket costs, and the plan L cap is $2,330.

When shopping for Medigap, be sure to compare prices from several companies. Paying more than $70 per month for Plan K, or $115 for Plan L is too much.

**Sorry to say, this Medigap guaranteed issue applies only to people on Medicare who are over 65.  Arizona does not require Medigap companies to enroll disabled Medicare beneficiaries who are under 65.

**People with monthly income below $950 probably qualify for Medicaid help with their co-insurance and do not need a Medigap plan.  There is a Medicare Advantage plan in Yuma County for people who are eligible for both Medicare and Medicaid. (AHCCCS is Arizona Medicaid.)


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