Understanding Medicare Supplement Enrollment

Time Waits For No Medigap

So you’ve just turned 65, which means you’ve got a choice: do you pick a Medicare Advantage plan, or stick with Original Medicare? If you pick the latter, you might want to pick up Medicare Supplement Insurance, or Medigap, to help manage cost sharing and deductibles, which means you’ll need to sign up during your Medicare Supplement Enrollment period.

So when is that, exactly? Well, Medigap enrollment doesn’t work the same way as Medicare enrollment, and if you’re not aware of the key differences, you might end up paying more for coverage than you should be.

The Medicare Supplement Open Enrollment Period

The month you turn 65, you enter a six-month Medigap Open Enrollment Period. During this time, you may freely enroll in a Medigap plan provided you are already enrolled in Medicare Part B. Note that Medicare Advantage (Part C) is mutually exclusive with Medigap, so you can’t have both. 

Those of you familiar with Medicare enrollment from our previous articles have probably noticed that the naming scheme of this period doesn’t map up with what Medicare normally uses. When you first become eligible for Medicare, you enter an Initial Enrollment Period, not an Open one. What gives?

The difference here is that this is the only mandated enrollment period for Medigap. There is no annual period where you can freely swap plans. At least, not without a big catch.

Can You Enroll in Medicare Supplement Plans at Any Time?

You see, unlike with Medicare plans, there’s no law preventing companies from selling you Medigap insurance year-round. However, many companies choose not to, and those that do aren’t necessarily going to give you the best deal.

It all comes down to risk. Insurance is an industry built upon managing and mitigating risk. The idea is that a group of people combine their money into a fund that can cover certain expenses in an emergency. 

Each person has a certain chance of needing to withdraw from that fund. If a person is more likely to need to withdraw from the fund, then the people managing said fund might require them to pay more or may forbid them from participating in the first place. We see this all the time in property insurance: it’s why your car insurance premiums go up after an accident, and go down if you have a safe driving record. It’s also why it’s so difficult to get homeowners insurance in places prone to natural disasters.

This used to be the case with health insurance as well, a practice called medical underwriting. If you had a pre-existing condition, were a smoker, or were otherwise more likely to get sick, insurance companies would charge you higher premiums or deny you coverage entirely. 

Eventually, people decided that treating people’s lives the same way we treat cars was bad, actually. So, in 2010, the US Government passed the Affordable Care Act (ACA), which included a provision stating that health insurers could not deny people coverage based on risk or pre-existing health conditions, though exceptions existed for certain types of short-term or supplementary insurance.

Medigap exists in a sort of weird liminal space when it comes to the ACA. 99 percent of the time, it’s considered one of the exceptions to the rule forbidding medical underwriting. This means that insurers are free to adjust prices and deny coverage based on your risk factor. However, as a Medicare program, there are periods when insurers cannot legally deny you coverage. One is the Open Enrollment Period when you first become eligible, but there are others. 

Guaranteed Issue Periods

Similar to Special Enrollment Periods in Medicare, a guaranteed issue period allows you to enroll in a Medigap plan at the best possible rate, provided you meet certain eligibility criteria, which you can check here. These include, but are not limited to:

• Losing qualified Medigap coverage through no fault of your own. For instance, if your provider goes bankrupt or has committed fraud. 
• Losing employer-sponsored coverage.
• Enrolling in Medicare Advantage when you first became eligible for Medicare, only to disenroll within the first year.
• Leaving your coverage area, in the event your Medigap plan has a network.

Unfortunately, voluntary disenrollment from Medicare Advantage after the first year does not qualify you for a guaranteed issue period. 

If you’re still trying to decide between Medigap and Medicare Advantage, or are just looking for a Medigap plan at a reasonable cost, we can help. Our licensed insurance agents can help you make the most out of your Medicare plan, guiding you through the hurdles and helping you find a combination of benefits that works for you. Call us today at (800) 950-0608 or enter your zip code into our free plan comparison tool to begin your search today.