A Medigap policy (also known as Medicare Supplement Insurance) is extra health insurance coverage that pays for expenses that Original Medicare does not, such as copayments and deductibles.
Reasons for Switching Medigap Policies
After you buy this type of policy, there are four typical reasons you may want to change from one Medigap policy to another.
- If you are paying for benefits that you just don’t need now (and you probably won’t ever need in the future).
- If you find that you need more benefits than you previously needed when you bought the policy.
- You want to switch insurance companies, perhaps because you’re not happy with the current company.
- You want to pay less for a Medigap policy than you’re currently paying.
However, in most cases, you can’t switch your Medigap policy, unless:
Check Your Eligibility
- you’re within the six-month open enrollment period for Medigap, or
- you have guaranteed issue rights.
What Are Guaranteed Issue Rights?
Guaranteed issue rights are when you are subject to certain circumstances and, as a result, insurance companies can’t turn you down for a Medigap policy, can’t place conditions on the policy, or charge you more for the policy due to your health. Under federal law, if you have a guaranteed issue right, you can buy a Medigap policy. In some cases, you might have more than one guaranteed issue right.
Even if federal law doesn’t give you the right to switch policies due to a guaranteed issue right, some states have more generous rules that may allow you to change policies outside of the open enrollment period. Also, some insurance companies might voluntarily agree to sell you a new Medigap policy even if the open enrollment period has passed. On the downside, you might end up paying more for the policy.
The Free-Look Period
If you do switch Medigap policies and it turns out that you don’t like the new one, you can change your mind and cancel the new policy—so long as you do so within the first 30 days. This time frame is called a “free-look” period, which starts when you get the new policy.
When you apply for the new policy, you will have to agree that you’ll cancel the first Medigap policy. But, in most cases, it makes sense to keep your initial Medigap policy until you figure out whether or not you like the new one, even though you’ll have to pay both premiums for one month.