Switching Medigap Plans: The Birthday Rule, Anniversary Rules, and Guaranteed Issue Rights

A Medigap plan helps pay your share of costs in Original Medicare. You may want to switch plans for a lower price or a better fit. The hard part is not picking a plan. The hard part is your right to buy one. At some times, a company must sell you a plan. At other times, it can ask about your health and can say no. This guide explains the federal rules that set those times. Our Medicare Supplement section holds more guides on plan letters and plan rules.

What a switch means

Medigap is also called Medicare Supplement. It works with Original Medicare. Medicare pays its share first. Your Medigap plan then pays its set share of the rest.

Plan letters are set by federal law. A plan with the same letter covers the same base benefits, no matter which company sells it. Price and service can still differ by company. That is why many people want to switch to the same letter at a lower price, or to a new letter with a new mix of cover.

If you look at other letters, read our guide on Medigap Plans K and L and their out-of-pocket limits and our guide on Medigap foreign travel emergency coverage before you choose. A cheap plan that drops a benefit you need is not a good deal.

A switch is not like a switch of a Medicare Advantage plan. There is no fall window each year when any Medigap member can change plans with no health check. Your right to switch rests on the windows and rights in this guide, plus any extra rule your state gives you.

Your first window to buy

The safest time to buy a Medigap plan is your Medigap open enrollment window. It lasts six months. It starts when you are 65 or older and you first sign up for Part B.

In that window, a company cannot refuse to sell you a plan it offers. It cannot charge you more for the plan due to a health problem. It cannot make you wait for cover for a health problem you already have, with one key caveat.

If you did not have creditable coverage before that window, the company may use a wait of up to six months for a health problem you already had. Creditable coverage means prior health cover that counts under the rule. Keep proof of any prior cover. Show it when you apply. With that proof, the wait may be cut or may not apply at all.

If you miss this window, you do not get it back. Later buys rest on other rights or on passing a health check. That is why this first window matters so much.

Buys outside those rights

Outside the first window and outside a guaranteed issue right, the rules change. A company may ask you health questions on the form. It may look at your health past. It may charge you more due to your health. It may turn you down.

This is called medical underwriting. It is the norm for late switches in most cases. Good health at the time you apply can help you pass. Poor health can block a switch, even if you have held a Medigap plan for years.

Do not drop your old plan before a new plan accepts you in writing. If the new company says no and you have dropped the old plan, you may have no Medigap cover at all. Keep the old plan in force until the new plan is firm.

Guaranteed issue rights

In set cases, federal law gives you a guaranteed issue right. That means a company must sell you a plan. It cannot turn you down due to your health. It cannot charge you more due to your health for that sale.

The main cases are these:

Other set cases exist in federal law. A letter from your plan that ends or moves your cover is key proof. Keep that letter. You will need to show it when you apply for the new plan.

The new plan in these cases is drawn from the set of plans the right lets you buy. Ask which letters the right covers before you pick. Do not assume it covers each letter sold in your state.

• Your plan ends. For instance, the company stops the plan or the plan leaves the market.
• Your plan leaves Medicare. This covers cases where a plan stops taking part in the program.
• You move out of your plan service area, so the plan can no longer serve you where you live.
• You have a trial right. You tried a Medicare Advantage plan for the first time and you leave it in the time the trial rule allows, to go back to Original Medicare with a Medigap plan.

The 63 day clock

Most guaranteed issue rights run on a short clock. In most cases, you must apply no later than 63 days after your old coverage ends. Some rights start the clock on the date you get a notice from your plan. Read that notice with care and note the date your cover ends.

Act well before the last day. You will need to pick a plan, fill in the form, and send proof of your right. If you miss the clock, the right can lapse. The company can then treat your form as a late buy and ask health questions.

Keep copies of all forms and letters. Write down the date you sent each form and how you sent it. Proof of a date on time can save the right if a file is lost.

Birthday rules and anniversary rules

Some states give you one more way to switch. These state rules go by names such as the birthday rule and anniversary rules.

Under this kind of rule, you get a set time each year when you can switch to a like plan, or to a plan with the same or less cover, with no health questions. The exact form of the rule is set by the state, not by federal law.

These rules exist in some states only. They vary by state. They do not exist in each state. The start date, the length of the window, and the plans you can move to all differ from state to state. This guide does not name states or window lengths for these rules, as a wrong state detail could mislead you.

To learn if your state has such a rule, check with your state insurance department. You can also ask your local State Health Insurance Assistance Program, called SHIP. SHIP help is free. Counselors there do not sell plans. Ask if your state has a birthday rule or an anniversary rule, when it runs, and which plans it lets you pick.

Steps before you switch

Price matters, but the right to buy comes first. A low quote has no value if the company will not accept you. Settle the right, then shop the price for the letters your right covers.

• Name your right first. Is it the first six month window, a guaranteed issue right, a state rule, or a buy with a health check?
• Get the end date of your old cover in writing, and work out your last day to apply.
• List the doctors and care you use. Check that the new route still fits that care under Original Medicare.
• Ask each company which plan letters your right lets you buy.
• Apply early and keep proof of the date and of your right.
• Do not end the old plan until the new plan accepts you in writing.

Who pays for what

No premium amount is stated in this guide. The federal government does not set Medigap premiums. Each company sets its own price. Get quotes in writing from the company or a licensed agent for your state.

• Original Medicare pays its share of covered care first.
• Your Medigap plan pays its set share of the rest, under the plan letter you hold.
• You pay the Part B premium and the Medigap premium set by the company that sells your plan.
• You pay costs that neither Medicare nor your plan covers.
• Medicaid can help with costs for people who qualify through their state.
• Private pay covers care and costs that no plan covers.

Sample situation

Marta is 71 and has held a Medigap plan for five years. She moves to a new home. Her new home is outside the service area of her plan, so her plan tells her in writing that her cover will end. That move gives her a guaranteed issue right. Marta keeps the letter from her plan. She calls her SHIP office to check the steps. She picks a new plan from the letters her right covers. She sends her form and a copy of the letter well within 63 days after her old cover ends. The new company must sell her the plan. It cannot turn her down due to her health. Marta keeps her old plan in force until the new plan start date, so she has no gap in cover.

Questions to ask before you sign

Write down each reply, with the name of the person who gave it and the date. If a reply on your right does not match this guide, check with your state insurance department or SHIP before you act.

• What right lets me buy this plan, and what proof do you need from me?
• What is my last day to apply under that right?
• Which plan letters does my right cover?
• Will you ask health questions in my case? If so, why?
• When will the new plan start, and when should I end the old plan?
• How has the price for this plan risen in past years for people my age?

Sources

• https://www.medicare.gov/health-drug-plans/medigap