Can I Cancel My Medicare Supplemental Plan Anytime?

Medicare Supplement plans, often called Medigap, are private insurance policies designed to help cover some of the out-of-pocket costs that Original Medicare (Part A and Part B) does not pay. These expenses can include deductibles, copayments, and coinsurance. Many individuals consider these plans to achieve more predictable healthcare costs. A common question arises regarding the flexibility to discontinue these plans. This article will clarify the ability to cancel Medigap policies, the steps involved in the process, and important considerations for coverage afterwards.

Understanding Medigap Plan Cancellation

You can cancel a Medicare Supplement (Medigap) plan at any time. Unlike other Medicare coverage types, there is no specific annual disenrollment period for Medigap plans. However, obtaining new Medigap coverage after cancellation depends on specific circumstances. Cancelling does not guarantee the ability to re-enroll in a similar plan without complications.

The ability to secure new Medigap coverage without medical underwriting is tied to specific enrollment windows or “Guaranteed Issue Rights.” The Medigap Open Enrollment Period is a one-time, six-month window that begins the month you turn 65 and are enrolled in Medicare Part B. During this period, insurers cannot deny coverage or charge higher premiums due to health conditions, regardless of your medical history. This allows you to select a policy without medical underwriting.

Guaranteed Issue Rights allow you to purchase a Medigap policy under certain conditions, even outside your initial Open Enrollment Period. These rights apply in situations like losing employer-sponsored health coverage, moving out of a plan’s service area, or if your Medicare Advantage plan ceases to be offered or you disenroll within a trial period. When Guaranteed Issue Rights apply, insurers must sell you a Medigap policy, cannot use medical underwriting, and cannot impose a waiting period for pre-existing conditions. These periods are time-sensitive, requiring action within 63 days of the qualifying event.

Outside of these specific enrollment periods and Guaranteed Issue Rights, if you cancel your Medigap plan and later wish to purchase a new one, you will be subject to medical underwriting. This process allows insurance companies to evaluate your health history, and they may deny coverage or charge higher premiums based on pre-existing conditions. While cancellation is possible at any time, re-entry into the Medigap market can become challenging and more expensive without these protections.

It is important to distinguish between cancelling a Medigap plan and switching to a Medicare Advantage plan. Medigap plans supplement Original Medicare, while Medicare Advantage plans are an alternative way to receive your Medicare benefits, often bundling Part A, Part B, and sometimes Part D. You cannot have both a Medigap plan and a Medicare Advantage plan simultaneously.

Steps to Cancel Your Medigap Plan

Before canceling your Medigap policy, confirm you have alternative health coverage or fully understand the implications of relying solely on Original Medicare. This ensures continuous coverage and helps avoid unexpected healthcare expenses. It is advisable to have a new plan effective the day your old one terminates.

Contact your current Medigap insurance company to cancel your plan. Their contact information is typically on your policy card or official website. Be prepared to provide your policy number and personal identification details to verify your account.

Inquire about the exact effective date of cancellation to avoid gaps or overlaps in coverage. Ask if you are eligible for any pro-rated premium refunds for unused portions of your coverage, as some insurers offer this. Request written confirmation of your cancellation for your records.

Review your payment arrangements and stop any automatic premium payments to prevent further charges after the cancellation date. This may involve contacting your bank or credit card company in addition to the insurance provider. These steps help ensure a smooth transition when canceling your Medigap policy.

Navigating Coverage After Cancellation

Upon cancellation of your Medigap plan, you will immediately lose coverage for out-of-pocket costs associated with Original Medicare Part A and Part B. You will become solely responsible for deductibles, coinsurance, and copayments, which can accumulate quickly depending on your healthcare needs. For example, Original Medicare Part B covers 80% of approved services, leaving the remaining 20% as your responsibility.

You will then rely exclusively on Original Medicare for your healthcare needs. Original Medicare provides comprehensive hospital and medical insurance, but it does not have an annual out-of-pocket spending limit. This absence of a cap means your financial liability for healthcare services could be substantial.

Considering alternatives is a common next step after Medigap cancellation. One option is purchasing a new Medigap plan, but this can be challenging if you are outside a Guaranteed Issue Right period or your initial Medigap Open Enrollment Period. Medical underwriting will apply, potentially leading to higher premiums or denial of coverage based on your health status.

Another alternative is enrolling in a Medicare Advantage (Part C) plan, which provides an all-in-one alternative to Original Medicare. These plans have lower monthly premiums and often include prescription drug coverage and additional benefits like routine vision or dental care. However, Medicare Advantage plans involve network restrictions, requiring you to use specific doctors and hospitals, and they may have different cost-sharing structures compared to Medigap.

You cannot have both a Medigap plan and a Medicare Advantage plan simultaneously. Changes to Medicare Advantage plans can be made during the Medicare Annual Enrollment Period (AEP), which runs from October 15 to December 7 each year, with new coverage effective January 1.