Can Medical Insurance Companies Drop Your Medicare Coverage?

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 10/21/2018

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When you are enrolled in the Medicare program, you have certain rights and protections under federal law. You may have Original Medicare (Part A and Part B) or a Medicare Advantage plan. Regardless, if you meet eligibility requirements, you have the right to enroll in Medicare, even if you have pre-existing health conditions. However, there are certain instances in which you can lose your coverage. Here’s what you need to know.

Can I lose my Original Medicare benefits?

Most people have their Medicare Part B premiums deducted from their retirement benefits. However, if you pay them yourself and you miss one or more payments, you could be in danger of losing your Medicare benefits.

  • Your premium notice usually has a due date of the 25th of the month. If you miss the payment, you’ll receive a “Second Notice,” notifying you of the delinquency.
  • If you still don’t pay after the Second Notice, you’ll receive a “Delinquency Notice” with a specific date your coverage will terminate if you don’t pay. This is considered your termination notice.
  • If you haven’t caught up with your premiums by the specified date, you’ll receive a letter informing you of your coverage termination. This usually arrives about 30 days after the termination date, or about four months after the first unpaid bill. Once this happens, in most cases you cannot re-enroll until the next Open Enrollment Period and you may pay permanent late penalties. In some cases, you might qualify for a Special Enrollment Period, when you may be able to enroll without paying a penalty.

What about Medicare Advantage plans or Medicare Prescription Drug Plans?

Medicare Advantage plans and Medicare Prescription Drug Plans (Medicare Part D) are offered by private medical insurance companies contracted with the Medicare program. A Medicare Advantage plan is an alternative way to receive your Original Medicare (Part A and B) benefits (except for hospice care, which is still covered by Part A). You’ll usually still have to pay your Part B premium with a Medicare Advantage plan. Medicare Prescription Drug Plans are stand-alone plans that help pay for prescription drugs.

Medicare Advantage plans and Medicare Prescription Drug Plans may cancel your coverage if you don’t make your premium payments on time. Medicare and private insurance companies may have different systems for notifying you of your payment delinquency, however, so it’s important to check your plan documents to make sure you understand when and how to pay your premium each month.

You may also lose your coverage under your current plan in other ways, for example:

  • If you move out of your plan’s service area
  • If Medicare chooses to cancel or not renew its contract with your plan
  • If the medical insurance companies that contract with Medicare choose to discontinue offering your plan
  • If you are enrolled in a Medicare Advantage Special Needs Plan (SNP) and you no longer qualify under the plan’s enrollment requirements

It’s important to note, however, that if one of these situations applies to you, you are usually eligible for a Special Election Period that lets you select a new Medicare plan. In most situations, the Special Election Period begins two full months before you lose your coverage and ends one month after the termination date.

Can I lose my Medigap coverage?

If you have Original Medicare, you may have supplemental coverage through a Medicare Supplemental plan (Medigap), offered by a private insurance company, to help you pay for out-of-pocket costs for services covered under Original Medicare.

In most cases, medical insurance companies cannot drop your Medigap coverage.

There are a few major exceptions, however, where these protections do not apply:

  • If you stop paying your premiums according to the plan’s terms, your coverage can be terminated.
  • If you were untruthful about your health conditions and history on your Medigap application (perhaps in an attempt to lower your premiums), and it is later discovered, medical insurance companies can terminate your Medigap coverage.
  • If the company providing your Medigap benefits goes bankrupt or becomes financially insolvent, you can lose your coverage.

Under certain situations you may have certain rights known as guaranteed-issue rights. In these circumstances, medical insurance companies must sell you a Medigap policy:

  • You are currently enrolled in a Medicare Advantage plan and your plan stops providing services or you move out of the plan’s service area. (You only have this right if you are going back to Original Medicare rather than enrolling in another Medicare Advantage plan).
  • You have coverage through an employer that pays after Original Medicare pays, and that coverage is ending.
  • You enrolled in a Medicare Advantage plan as soon as you were eligible, and you decide within the first year to switch to Original Medicare. (This is known as a trial right).
  • You dropped your Medigap coverage to enroll in a Medicare Advantage plan and decided within the first year that you want to switch back (a trial right).
  • Your Medicare Advantage plan misled you or isn’t following the rules and you want to switch to Original Medicare.

In these cases, you may need to prove your guaranteed-issue right, so it’s important to keep any letters, notices, or claims from your Medicare Advantage plan or employer or union health plan to demonstrate you had coverage that met the guaranteed-issue requirements. These protections ensure that medical insurance companies can’t charge you a higher premium because of your current health or pre-existing condition.

If you need help understanding your rights and protections under the Medicare program, or the coverage options you may be eligible for, I’d like to answer your questions. I can also send you information via email, if you prefer, or you can schedule a phone call at your convenience by clicking one of the links below. You can view some plans in your area you may qualify for by clicking the Compare Plans or Find Plans buttons. You can find out more about me by clicking the “View profile” link.

The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program.

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