If your childhood was like most, when you made mistakes or something went wrong, you really wanted a do-over—another shot at making the right decision? You’re not a kid anymore, but it’s nice to know there’s still an opportunity for a do-over—a Medicare test drive.
When you’re eligible to sign up for Medicare, if you choose a Medicare Advantage plan, you have a 12-month trial period to see if that form of Medicare is right for you. If not, you get a do-over and you can choose any of the other forms of Medicare coverage, without penalty.
Types of Medicare
Part A Medicare is hospital insurance which covers hospital care, skilled nursing facility care, nursing home care, hospice, and home health services as well as services like lab tests, surgeries, and doctor visits, and supplies such as wheelchairs and walkers if they’re considered medically necessary. There’s generally no cost for Part A, but you do have to pay an inpatient deductible and coinsurance.
Part B Medicare is medical insurance covering outpatient services and doctors’ fees, medically necessary services and supplies, and preventive services. There is a monthly premium for Part B and an annual deductible.
Parts A and B cover approximately 80% of your medical charges and you pay the rest.
Medicare Supplement (Medigap) policies. Depending on the Medigap plan you have, a Medicare Supplement policy pays some or all of the expenses not covered by Parts A and B. There is a monthly premium for Medigap policies. If you enroll in a Medigap plan when you are first eligible for Medicare you can choose any plan available to you at the best price even if you have pre-existing conditions. (More about Medigap later)
Part D Medicare is prescription drug coverage. Part D charges a monthly premium plus a deductible before it begins to pay anything toward your prescription costs.
Medicare Advantage (Part C) plans are referred to as all-in-one plans. They provide the coverage of Parts A, Part B, and often Part D drug, and may also include coverage for vision, dental, and hearing.
The Trial Period
Because the all-in-one option sounds so good, many people enroll in a Medicare Advantage plan when they are first eligible. But a MA plan is not right for everyone, especially if you have lots of health issues or frequent hospital stays. The Medicare Advantage trial period lets you test drive a MA plan and see if it is best for your needs.
The trial period lasts for one year. Anytime during that 12 months, if you decide Medicare Advantage is not right for you, you can leave the plan and purchase a Medigap plan without going through medical underwriting, just as if you had signed up for Medigap when you first became eligible for Medicare. You are guaranteed the right to purchase any Medigap plan available in your area at the best price and will not be charged a higher premium, even if you have health conditions.
There’s a second situation that allows for a trial period. If you own a Medicare Supplement (Medigap) plan and switch to a Medicare Advantage plan for the first time, you get a 12-month window that allows you to go back to Medigap penalty-free.
During that year, if you decide Medicare Advantage isn’t for you, a special enrollment period opens and you can go back to the same Medigap plan you had before you switched. If the plan you had is no longer available, you’ll be able to choose any plan that’s available in your area without going through a medical underwriting process that might normally disqualify you from Medigap coverage because of pre-existing conditions. Permissible actions vary based on your specific situations and state-specific regulations.
Things to Know About Medigap
There are several Medigap plans to choose from, all starting with a letter of the alphabet. Each plan offers different options, so you need to know what’s the best fit for you. Some things you need to know about Medigap:
- You must have Medicare Part A and Part B.
- You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D). If you buy Medigap and a Medicare drug plan from the same company, you may need to make 2 separate premium payments. Contact the company to find out how to pay your premiums.
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you’re switching back to Original Medicare.
Medigap policies don’t cover everything. They don’t cover long-term care, vision, dental care, hearing aids, eyeglasses, or private-duty nursing. And as of January 1, 2020, Medigap plans sold to new people with Medicare aren’t allowed to cover the Part B deductible. Because of this, Plans C and F are not available to people new to Medicare.
The Process of Switching
When you leave the Medicare Advantage plan, you will switch back to Original Medicare (Parts A & B) for your hospital and medical insurance. You will enroll in the Medigap plan you’ve chosen. And if you want drug coverage, you’ll need to purchase a Part D prescription drug plan.
You leave the Medicare Advantage plan by submitting a request to the MA plan or by calling 1-800-MEDICARE (1-800-633-4227).
All the Medicare Advantage and Medicare Supplement commercials on TV can get very confusing. There are so many options. As I’ve worked with clients over the years I’ve discovered that it’s better to deal with a Medicare professional in your area who knows what plans are offered where you live, a person who can explain what it all means, and someone you can look in the eye.