Medicare supplement insurance (Medigap) automatically renews on a yearly basis. However, some insurers in certain states may decline renewal for policies that a person purchased before 1992.
Medicare Supplement insurance, also called Medigap, can help an individual pay their out-of-pocket costs for Original Medicare. It is a separate plan that private insurers provide. However, these insurers must stick to Medicare guidelines, and coverage is similar between providers despite costs being different.
This article explains how Medigap renewal works.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
- Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
As long as they pay their premium, an individual’s Medigap policy renews automatically every year. Coverage is continuous unless the following situations develop:
- A person does not pay their premium.
- A person knowingly provides untrue information on their plan application.
- The insurance company goes out of business.
Many types of Medigap policies are available, including A, B, C, D, F, G, K, L, M, and N. Every policy with the same letter offers the same benefits, even if it comes from a different insurer. Parts E, H, I, and J are no longer available.
Insurers must renew discontinued Medigap policies for people who bought them before June 1, 2010, should the individual wish to keep them. However, an insurance company has the right to refuse renewal if a person’s policy started before 1992. The insurer will need the state’s approval before canceling the policy.
A person is under no obligation to continue their Medigap plan. However, if they wish to cancel the plan before it automatically renews, they will need to do so within the Medicare Enrollment period.
People who cancel their Medigap policy may not be able to open another Medigap plan or reopen the same one later.
Medicare enrollment periods are fixed time windows in which a person can join, drop, or change a policy. The only time a person can change their Medigap policy is during the 6-month Medigap open enrollment period.
Unlike enrollment periods for other types of Medicare plans, Medigap open enrollment is a one-time window. It starts in the first month a person has Medicare Part B and is 65 years of age and ends 6 months later.
After this window, a person may not be able to buy Medigap, and if they can, the plan may cost more. The insurer may also be able to deny coverage based on preexisting conditions. People who buy Medigap during this time have 30 days to decide whether to stick with their plan or find another. This is known as a 30-day free-look period.
Federal law protects a person’s right to buy Medigap outside of open enrollment through a rule called a guaranteed issue right. Circumstances in which an individual has a right to buy outside of open enrollment may include:
- a beneficiary moving out of a Medicare Advantage plan’s service area
- a Medicare Advantage or Medicare SELECT plan no longer providing care locally
- an individual wanting to switch from Medicare Advantage to Original Medicare
- a person dropping Medigap to join Medicare Advantage for the first time and wishing to rejoin within a year
- the insurance provider not following regulations or misleading a beneficiary
Usually, a person needs to apply for a new Medigap plan 60 days before the end of their current coverage or a maximum of 63 days after coverage finishes. State law may provide additional protections. An individual’s local State Department office can provide more information, and a directory is available online.
People who switch to a new Medigap plan should avoid canceling their previous plan until they know they want to hold on to the new one. They will need to promise to cancel the existing plan on the application for the new policy.
Learn more about Medigap plans, enrollment, and exclusions.
Most Medicare plans issue an Annual Notice of Change (ANOC) every September ahead of renewal. This gives beneficiaries a picture of upcoming changes to the plan’s cost and coverage from January of the following year.
An ANOC can help an individual decide whether a plan is suitable for their needs ahead of renewal and work out whether to keep the policy or make a change.
However, Medigap plans do not need to send out an ANOC because they are standardized, meaning the benefits will be the same every year.
Read about Medigap vs. Medicare Advantage.
If a Medigap plan is no longer part of the Medicare program, the insurer must send a beneficiary a nonrenewal notice in November informing them they will need to choose a new plan in the following year.
People have guaranteed issue rights if a plan is set to leave Medicare, which means a new Medigap provider cannot refuse them coverage outside of open enrollment.
Read about switching from Medicare Advantage to Medigap.
People may wish to review their Medigap plan if they:
- find that they pay a premium for benefits they do not receive
- need benefits over and above what their current plan gives them
- wish to change to a different insurer or find a cheaper policy
If a person leaves a plan more than 6 months in, the new Medigap policy will cover preexisting conditions. People wanting to switch to another plan before this may need to wait for a new plan to approve coverage for preexisting conditions.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Medicare supplement plans renew automatically, but insurers may cancel a policy that started before 1992 with their state’s permission. People can drop or change Medigap during their open enrollment window when they first have Medicare Part B and are 65 years of age or under a guaranteed issue right during set circumstances.
If a company no longer offers the product, it may issue a notice of nonrenewal. However, the company must continue to renew discontinued parts of Medigap E, H, I, and J plans if the beneficiary wishes to continue. People who wish to cancel may not be able to get the policy back or start another Medigap plan.