Health Advice



Medicare enrollment blitz doesn't include options to move into Medigap

Harris Meyer, Kaiser Health News on

Published in Health & Fitness

While Medigap plans typically carry higher premiums than Medicare Advantage plans, the more expensive ones offer greater out-of-pocket cost protection.

After a beneficiary’s initial six-month window, federal law does not prohibit Medigap insurers from rejecting applicants or charging a very high premium if they have a preexisting medical condition, unlike in the Affordable Care Act insurance market for people under 65. Only four states require insurers to offer Medigap coverage to applicants regardless of age or health. Medigap covers nearly 13 million beneficiaries.

In contrast, federal rules require Medicare Advantage plans to accept all applicants and charge the same premium regardless of their health. Out-of-pocket costs in Medicare Advantage plans are capped at $7,550 this year for in-network care, not counting prescription drugs. Traditional Medicare has no cost cap, but some of the Medigap plans cover the vast majority of those expenses that otherwise would be out-of-pocket.

At least partly because of these unequal consumer protections, 17% of the 33 million people in traditional Medicare have no supplemental insurance, according to Tricia Neuman, executive director for Medicare policy at KFF. Their out-of-pocket costs can reach tens of thousands of dollars a year for serious conditions like cancer or kidney disease.

Linda Ginsburg of Jacksonville, Florida, unknowingly missed her chance to buy a Medigap policy last year when she turned 65.

Because she has cancer, the retired medical office manager qualified for Medicare through Social Security Disability Insurance before turning 65, and she enrolled in a Medicare Advantage plan. She was paying a $385 monthly premium — $4,620 a year — and facing $7,000 a year in out-of-pocket costs, not counting her big prescription drug bills. So last year before her birthday, she called two insurance brokers about switching to traditional Medicare and getting a Medigap plan, which she thought would offer better, cheaper coverage. Medicare rules offer a Medigap open enrollment opportunity for disabled beneficiaries when they turn 65.


Both brokers told her, inaccurately, that she couldn’t switch because she has cancer. “They said insurers aren’t going to take you, you should stay where you are,” Ginsburg recalled. “They absolutely were unaware that was a period when I could have gotten in without being asked about my cancer.”

Now she’s stuck — and angry. “I thought screening for preexisting conditions is against the law,” she lamented. “But it’s not true when you hit Medicare age.”

Part of the confusion is due to states’ very different rules governing Medigap policies. Connecticut, Maine, Massachusetts and New York require insurers to accept any applicant regardless of age or medical history, according to KFF.

In other states, people over 65 receive federally guaranteed access to a Medigap plan only under limited circumstances, such as if they move or switch out of a Medicare Advantage plan in their first year of Medicare. Twenty-eight states ensure people access to a Medigap plan if their employer terminates their retiree health benefits.


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