Switching from Medicare Supplement Insurance (Medigap) policy to a Medicare Advantage plan

Individuals may find their existing Medicare coverage is no longer the best option for their needs as medical and health needs change. Navigating health insurance changes can feel confusing. But with a little preparation, individuals can make coverage changes that suit them better.

Why do you need more than just Medicare? 

When a person becomes eligible for Medicare, they have two main ways to get it. There’s Original Medicare, which the government provides. And there’s Medicare Advantage (Part C) plans. Part C plans are offered by private insurance companies that must follow rules set by Medicare.

Original Medicare includes the Medicare Part A (hospital insurance) and Part B (medical insurance). Members can join a separate Medicare drug plan to get Medicare drug coverage (Part D). They pay a separate monthly plan premium for it. Original Medicare members can use any doctor or hospital that takes Medicare anywhere in the U.S. And to help pay out-of-pocket costs (like the 20% Part B coinsurance), members can also shop for and buy a Medicare Supplement Insurance (Medigap) policy. Medigap policies also include a separate monthly premium payment. These policies help patients handle the financial burden of coinsurance and other out-of-pocket costs. Medigap policies can only be used with Original Medicare. They cannot be used with any Medicare Advantage plans. A downside of Original Medicare is there’s no yearly limit on what a member may pay out-of-pocket in a given year. So, if a person has a serious health issue, they’ll continue to pay for as long as they need treatment.

Can I switch from Medigap to Medicare Advantage? 

Some people who currently have Medigap, or Medicare Supplement Insurance, are looking for a more flexible and economical option. They can make the switch from Original Medicare and a Medigap policy to Medicare Advantage. Medicare Advantage can be a better choice and provide the best mix of coverage in some instances. So, it could be a good idea to make the switch. However, there are a few things to consider when doing so.

When can I switch from Original Medicare and Medigap to Medicare Advantage (MA)? 

If a person’s financial situation or health condition changes, it may be time to switch from Original Medicare and a Medigap policy to an MA plan. However, this can only be done at certain times. The Annual Enrollment Period, (every October 15 to December 7), a person can join, switch, or drop their Medicare health and prescription drug coverage. Decide before the Annual Enrollment Period, so there’s time to gather all necessary information and become familiar with the changes. 

Why switch from Original Medicare and Medigap to Medicare Advantage (MA)? 

Cost is often a driving factor for people thinking about switching their coverage. Medigap provides a larger network. But often their monthly premiums are higher than many MA plans.

Coverage is another factor. Medigap policies do not cover everything. So, a member still has to pay out of pocket for things like dental care, vision care and long-term care.

Is Medicare Advantage better than Original Medicare and Medigap? 

The answer is — it depends.

MA plans place a yearly limit on Part A and Part B out-of-pocket costs. But different plans offer different limits. Most MA plans include prescription drug coverage. This allows a member to manage all their health care needs with a single insurer. Finally, there’s dental and vision costs. Many MA plans include added benefits that Original Medicare doesn’t include like hearing, dental, vision and over-the-counter items. And Medigap doesn’t include coverage for such items either.

Downsides of MA plans: most use a network of health care providers and facilities. Some plans do offer out-of-network services, but the member pays a higher cost. And members may need to get a referral to use a specialist.

So, whether a person should switch to a Medicare Advantage plan from Original Medicare and Medigap depends on what a person needs and wants from a plan.

Are all Medicare Advantage Plans the same? 

MA plans are standardized and approved by the government. But each plan may offer different provider networks. If an individual is seeing a specific doctor or specialist, they must examine MA plan networks to find a plan that covers them. And each MA plan may cover care in different hospitals and facilities.

MA plans also offer different types of plans. An HMO type has lower monthly premiums and lower out of pocket costs. But the member is locked into the plan’s network of providers and facilities. And often must get a referral to see a specialist. Members have no coverage if they go out of network.

Members have coverage for in and out-of-network providers with a PPO type plan. Although members pay more of a deductible for out-of-network providers, there’s more flexibility and a larger choice of providers. And many PPO plans allow members to see a specialist without a referral. But members pay more for PPOs.

Things to consider when switching Medicare coverage 

If a person takes several medications, they must check potential plan choices for what drugs the plans covers. Prescription could be expensive to pay for them out-of-pocket. Or the new plan may cover prescriptions but may require prior authorization. Also, if it’s important, an individual must check if the providers they see are in a new plan’s network.

If a person decides to switch back to a Medigap policy from an MA plan, they can only do so easily if they qualify for guaranteed-issue rights. If it’s the first time a person is switching from a Medigap policy to an MA plan, they can test things out to make sure they’re making the right choice. If the person decides they prefer Medigap, they can change back within 12 months. (If a person is in an MA plan, they have guaranteed-issue rights to buy a Medigap policy in certain situations. These rights require private insurers to sell a policy without a health screening. And the insurer can’t deny a policy or charge a higher monthly premium due to the member’s current health or history.) 

Normally, a person can be denied a Medigap policy. But it depends on where they live, if they’re replacing certain coverage, and whether they’re currently within their Medigap Open Enrollment Period.

There’s a lot to consider when making a Medicare health care coverage change. Take the time and educate yourself about the pros and cons of each plan. That way you’ll feel confident you’re getting the coverage you need and want. Using an online digital Medicare advisor can recommend the type of plan that may fit your lifestyle and medical needs.