Understanding the Medicare Advantage and Medigap Dilemma

The growing enrollment in Medicare Advantage (MA) plans has raised concerns about the challenges beneficiaries who wish to switch between MA and Original Medicare face. Despite the increase in marketing tactics to sell people on MA plans, many MA enrollees feel buyers’ remorse and decide that that they prefer coverage under Original Medicare. But those who wish to switch back to Original Medicare sometimes find that the out-of-pocket costs can be higher because they cannot get Medigap insurance.

Medigaps are health insurance policies that offer standardized benefits to work with Original Medicare (not with MA). They are sold by private insurance companies and pay part or all of certain remaining costs after Original Medicare pays first. Medigaps may cover outstanding deductibles, coinsurance, and copayments and may also cover health care costs that Medicare does not cover at all, like care received when traveling abroad.

But unlike beneficiaries who choose a Medigap when they initially enroll in Original Medicare, those transitioning from MA plans may face barriers to this form of coverage.

There are federally protected times to purchase a Medigap. In most states, people looking to buy a Medigap policy outside this protected enrollment period run into trouble. For instance, insurance companies can refuse to offer this coverage or impose certain medical requirements. If an insurance company does agree to sell a policy, they may charge a higher monthly premium and require a six-month waiting period before the Medigap will cover pre-existing conditions.

In response to these challenges, there are changes that can improve beneficiary protections and access to Medigap coverage. These include:

• Ensuring that beneficiaries who switch from MA to traditional Medicare are guaranteed access to Medigap policies without being subject to waiting periods or increased prices.
• Implementing measures to enhance transparency and consumer education regarding the differences between MA and Original Medicare, as well as the implications for Medigap eligibility.
• Addressing concerns about aggressive sales tactics and misleading coverage claims by MA insurers to better protect beneficiaries making informed enrollment decisions.

At Medicare Rights, we support commonsense changes that give people with Medicare true freedom of choice concerning their coverage options. To learn more, view our factsheet Access to Medicare Supplemental Insurance Policies (Medigaps).