Medigap plans, also known as Medicare Supplement plans, help cover many out-of-pocket expenses for Medicare recipients. The scope of these plans is determined in part by Medicare legislation and what private insurers want to offer. Because of this, Medigap plans are standardized to offer a select list of benefits at different price points.
Changes in legislation can render some plans obsolete, and some plans can be discontinued or phased out due to new requirements. For example, Medigap plans C and F will no longer be available to new Medicare recipients after January 1st, 2020. Private insurers can decide to stop offering some Medigap plans as well, even if legislation related to those plans has not changed.
Discontinued Plans Do Not Always Necessitate a Change
When legislation changes which plans can be offered by private Medicare insurance carriers, it does not mean that those plans are discontinued entirely for existing enrollees. In many cases, existing enrollees may continue to enjoy their current coverage. However, special rules may impact an enrollee’s options if they choose to change their coverage plans once the discontinuation goes into effect.
These rules usually mean that if the Medicare recipient chooses another Medigap plan, a Medicare Advantage plan or reverts back to Original Medicare coverage, they may not be able to return to their now-discontinued Medigap plan. This can be especially frustrating in cases where a discontinued Medigap plan’s premium is raised, which prompts an enrollee to look for more affordable options — but at a later date, the original Medigap plan’s premium is lowered again.
Medicare recipients who are already enrolled in a Medigap plan that will be discontinued should carefully evaluate their choices before they make a change. These plan changes usually mean unique benefits are no longer allowed to be offered by any other plan, so comparable coverage may not be available at an affordable price.
Before recipients cancel their existing Medigap policy, they can enroll in a new one and still have a 30-day grace period to return to a discontinued plan if their experience with a different plan is unfavorable. With this option, recipients are expected to pay both the premium for the discontinued Medigap coverage and the new plan.
Enrollment Periods after a Medigap Plan is Discontinued
Open enrollment for Medigap, which prevents insurers from charging higher premiums or denying coverage, is a 6-month period that begins the month a Medicare recipient turns 65 and requires the recipient to be enrolled in Part B Medicare coverage. If a recipient does not enroll in a Medigap plan during this time, they may be prohibited from enrolling in any Medigap plan or face higher premiums and delays in coverage unless they meet certain requirements that exempt them from these potential penalties.
In most cases, the discontinuation of a Medigap plan does not trigger guaranteed issue rights, so recipients are not protected from denials, premium increases or coverage delays for pre-existing conditions if they want to switch Medigap policies. If the insurance carrier for that Medigap plan goes bankrupt or becomes insolvent, then guaranteed issue rights go into effect and a recipient can change Medigap plans without facing the issues that crop up outside of the open enrollment period. This guarantee also applies if the Medigap carrier leaves your coverage area.
Although Medigap plans are standardized in such a way that recipients can experience the same type of coverage no matter which insurer carries the plan or what state they live in, some states may have special regulations in addition to what the federal legislation determines for these types of plans. A representative for your Medigap plan or your local Medicare agency can help you understand if any other special rights may be available to you when it comes to your Medicare insurance choices and discontinued Medicare Supplement plans.