Medicare Supplement Guaranteed Issue

If your Medicare Advantage plan is being canceled, you can go back to Original Medicare and you get  Medicare supplement guaranteed issue.  This means you cannot be turned down or charged a higher premium because you have health problems.

The Medicare Advantage cancellation letter says you can change to another Advantage plan, or you can get Medicare supplement “guaranteed issue”.  Even if you are 80-years old and in poor health, you will be accepted for a Medicare Supplement from any company you choose.

But don’t wait until the end of the Open Enrollment Period (October 15 – December 7) to apply for a Medigap plan because it will take some time to process your paperwork – even though the insurance company cannot turn you down.

The Medicare Advantage cancellation letter must be sent in with your Medigap application and you should answer the medical questions.

COST

The older you are, the higher your Medigap premium will be.  I was checking on Medigap for an 89-year old client and she will pay $163 for Plan N, or $231 for Plan F.   Plan L might be the best choice for her as its premium is $126 for this plan that fills 75% of the Medicare gaps.  Plan L is not as simple as plan F (as in “full coverage”), but it’s a lot less expensive.  Plus it caps her out-of-pocket costs at $2,470 annually.

PART D

You also need to enroll in a stand-alone Part D plan and premiums range from $15 – $90 per month.  The Part D plan you choose will depend on the prescriptions you take.  You can identify the right Part D plan for your you by going to Medicare.gov and putting in your prescription information.  The Plan Finder will then list the Part D plans in order from the lowest cost for your drugs to the highest cost.

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 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 guaranteed issue.  Without guaranteed issue, these folks might not be able to get out of Medicare Advantage. So they have a one-time opportunity to make a major change to their Medicare coverage.  I have several clients who are going to go this route.