By Bonnie Burns, California Health Advocates
Medicare Supplement Insurance, also known as Medigap, is a commercial health insurance product designed to cover some or all of the standardized cost-sharing obligations for individuals enrolled in Original Medicare. A Medigap policy cannot be used to pay cost-sharing expenses in a Medicare Advantage (MA) plan or a Medicare Part D plan. Federal law prohibits the sale of a Medigap policy to individuals covered by Medicaid, since such coverage would duplicate existing benefits.
This article focuses on certain mandated events when Medicare beneficiaries can purchase a Medigap policy. During these events, insurance companies are prohibited from denying coverage based on an applicant’s current or past health conditions.
Some of these events depend on actions taken by the Centers for Medicare & Medicaid Services (CMS). In certain circumstances, an MA plan is required to issue a formal notice that includes a Special Enrollment Period (SEP) to return to Original Medicare. As part of that SEP notice, beneficiaries may be informed of their right to purchase a Medigap policy without consideration of their health status or medical history. In other cases, federal law provides SEP rights without requiring formal notification. As a result, beneficiaries may not realize that a change in or loss of their current coverage gives them the right to purchase a Medigap policy. Many remain unaware of these rights until their coverage changes or ends.
A formal SEP notice is required when an MA plan contract, cost plan, or PACE program ends, is not renewed, or reduces its service area. In these cases, CMS requires the plan to notify members of their right to enroll in another MA plan or return to Original Medicare with the right to purchase a Medigap policy. When this occurs, insurance companies must issue a Medigap policy to any affected plan member who applies, regardless of health status. See Medicare Managed Care Manual, Chapter 2, Medicare Advantage Enrollment and Disenrollment, 30.4.3 – SEPs for Non-renewals or Terminationsavailable here: CY2021 MA Enrollment and Disenrollment Guidance
A formal notice may not be required if a beneficiary is transferred (cross-walked) from one MA plan to another offered by the same MA organization. In such cases, the member may not be aware of their right to switch to a different MA plan or to return to Original Medicare with the option to buy a Medigap policy. See CMS FAQ, available here: CMS NAIC Q and A And Follow-Ups
A notice is also not required when a beneficiary drops a Medigap plan to enroll in an MA plan for the first time and, within 12 months, decides to return to Original Medicare. In that situation, the beneficiary has the right to reinstate their previous Medigap policy. If that policy is no longer available, they are entitled to purchase any Medigap plan currently offered in their area. This protection is commonly referred to as a “guaranteed issue” right. See §1882(s)(3)(B)(v) of the Social Security Act, available here Social Security Act §1882.
A SEP is generally not required when a provider leaves an MA plan’s network. While the plan or provider may notify affected members, CMS will only grant a SEP if the network becomes inadequate. However, beneficiaries with serious health conditions whose care is disrupted by a provider’s departure can apply to CMS for an individual SEP. However, there is no guarantee that one will be granted and there is no federal guaranteed right to a Medigap policy. See Medicare Managed Care Manual, Chapter 2, Medicare Advantage Enrollment and Disenrollment, 30.4.4 – SEPs for Exceptional Conditions, available here: CY2021 MA Enrollment and Disenrollment Guidance
Between January and March each year, MA plan members may switch to another MA plan or return to Original Medicare. Beneficiaries who return to Original Medicare during this period typically do not have a federal right to a guaranteed issue Medigap policy, unless state law provides such protection. In states without these protections, insurers may deny coverage based on medical history or charge higher premiums to individuals with health conditions. See CMA alert and webinar on enrollment for more information, available here: Medicare Annual Open Enrollment Ends December 7th – Center for Medicare Advocacy
A new SEP will take effect in 2026 for beneficiaries who enroll through the Medicare Plan Finder website and discover—before the end of March 2026—that their provider is not in the plan’s network as shown on Plan Finder. The member may apply for an SEP by contacting 1‑800‑MEDICARE by March 31, 2026. See CMS Memo available here: HPMS Memos for WK 2 September 8-12 | CMS
Medicare beneficiaries can seek assistance with these and other Medicare rights from their State Health Insurance Assistance Program (SHIP). SHIP is a federally funded program that offers one‑on‑one counseling, education, and support to Medicare beneficiaries, their families, and caregivers to help them make informed decisions about their benefits. For more information, visit https://www.shiphelp.org/.