Concerned About a Medicare Supplement Rate Increase? Know the Rules & Options BEFORE Changing Plans.

Herbert Fuld

Sep 4

5 min read

If the premium for your Medicare Supplement—or Medigap—policy has increased, you may be wondering whether another plan could provide similar coverage at a lower cost.

It may be worth exploring. But changing coverage isn’t always as simple as selecting a less expensive plan. Before making a change, it’s important to understand your options and protect the coverage you already have.

You can explore Medicare Supplement options throughout the year

Medicare Supplement policies don’t follow Medicare’s Annual Enrollment Period of October 15 through December 7 like Medicare Advantage plans do. You can generally apply for a different Medicare Supplement policy at any time during the year.

But... that doesn’t necessarily mean the insurance company must accept your application.

Your six-month Medicare Supplement Open Enrollment Period generally begins when you’re 65 or older and enrolled in Medicare Part B. During this period, insurance companies generally can’t deny you a Medicare Supplement policy because of your health.

After that protected period ends, changing policies may require medical underwriting unless you have a guaranteed-issue right or another applicable protection.

What is medical underwriting?

Medical underwriting is the process an insurance company may use to review your health history before deciding whether to issue a policy.

Depending on the carrier’s rules and your circumstances, the company may:

Ask you to answer health questions.
Review information about your medical history.
Approve your application.
Charge a different premium when permitted.
Postpone or decline your application.

Underwriting requirements and eligibility questions can vary among insurance companies. A person who qualifies with one carrier may not necessarily qualify with another.

What if you stay with the same insurance company?

It’s easy to assume that changing plans within the same insurance company will avoid underwriting. That isn’t always the case.

For example, suppose you have Plan G and want to move to Plan N with the same carrier to reduce your monthly premium. The company may allow that as an internal plan change—but it may instead treat it as a new application and require medical underwriting.

Moving to a plan with more benefits will also commonly require underwriting outside a protected enrollment period.

The carrier’s current rules must be checked before assuming that an internal change will be approved without health questions.

A lower premium isn’t the only consideration

Price is certainly important, especially when premiums continue to increase. But the lowest available premium isn’t automatically the best choice.

Before changing Medicare Supplement coverage, consider:

Whether medical underwriting will be required.
How the new policy’s benefits compare with your current benefits.
Whether changing to another lettered plan will increase your out-of-pocket costs.
Whether household or other discounts apply.
When the new coverage would begin.
Whether giving up your current policy could make it difficult to obtain similar coverage later.

Medicare Supplement plans with the same letter provide the same standardized medical benefits regardless of which insurance company sells them. However, premiums, discounts, underwriting requirements, customer service, and rate histories can differ.

Could Medicare Advantage be another option?

A Medicare Supplement rate increase may also lead you to wonder whether Medicare Advantage would be a better fit.

During Medicare’s Annual Enrollment Period, which runs from October 15 through December 7, someone with Original Medicare and a Medicare Supplement policy may enroll in a Medicare Advantage plan for coverage beginning January 1.

This is more than simply changing Medicare Supplement policies. It means choosing a different way to receive your Medicare Part A and Part B benefits.

Many Medicare Advantage plans have low or no additional monthly plan premiums and may include Part D prescription drug coverage, dental, vision, hearing, fitness, or other benefits. However, these plans may also have provider networks, copays, prior-authorization requirements, prescription formularies, and other rules that don’t apply to a Medicare Supplement policy in the same way.

Before moving from Medigap to Medicare Advantage, carefully review:

Whether your doctors and hospitals participate in the plan.
How your prescriptions are covered.
Which pharmacies provide the most favorable costs.
The plan’s copays, deductibles, and maximum out-of-pocket limit.
Referral and prior-authorization requirements.
Coverage when traveling or living outside the plan’s service area.
Whether you could obtain Medicare Supplement coverage again if you later changed your mind.

Some people may have a protected Medicare Advantage “trial right” that allows them to return to certain Medicare Supplement coverage during a limited period.

Others could face medical underwriting if they later wanted to return to Medigap.

That possibility should be investigated before giving up an existing Medicare Supplement policy.

Don’t cancel your current coverage too soon!

This may be the most important point: Don’t cancel your existing Medicare Supplement policy simply because you’ve applied for other coverage.

If you’re applying for another Medicare Supplement policy, wait until:

Your application has been formally approved.
You know the exact premium.
You have confirmed the effective date.
You have received and reviewed the new policy.
You’re comfortable keeping the replacement coverage.

Medicare provides a 30-day “free look” period when replacing one Medicare Supplement policy with another. During that period, you may temporarily pay premiums for both policies. That added expense may be inconvenient, but it gives you time to review the new policy before permanently giving up your existing coverage.

If you’re moving to Medicare Advantage, make sure the new plan enrollment and effective date have been confirmed before arranging to end the Medicare Supplement policy.

If you also have a separate Part D prescription drug plan, confirm how the Medicare Advantage enrollment will affect it before taking any separate cancellation action.

Once an existing Medicare Supplement policy has been cancelled, you may not be able to get it back.

A review doesn’t automatically mean making a change

A rate increase is a reasonable reason to review your coverage, but it doesn’t mean changing policies—or moving to Medicare Advantage—will always be your best option.

After reviewing the alternatives, you may discover that:

Your current premium remains competitive.
Another Medicare Supplement carrier offers a lower rate.
Your current carrier permits an internal plan change.
A lower-premium Medigap plan would require more out-of-pocket responsibility.
Medical underwriting limits your alternatives.
Medicare Advantage better fits your healthcare needs and budget.
Keeping your present coverage is the safest choice.

Sometimes a change can produce meaningful savings. At other times, the coverage you already have may remain your best option.

At BeneCentric, we’ll help you explore your Medicare Supplement and Medicare Advantage options, understand the potential advantages and risks, and determine what questions should be answered before you make a change.

Our guidance and support are always provided at no cost to you—and protecting the coverage you already have is just as important as considering something new.