Can my Insurance Company Cancel my Medicare Supplement (Medigap) Plan?
This article was updated on: 09/16/2018
Usually, Medicare Supplement (also called Medigap) plans are guaranteed renewable – that is, the insurance plan can’t cancel your plan, except in certain cases.
Medicare Supplement plans are offered by private insurance companies and may help you pay out-of-pocket costs for services covered under Medicare Part A (hospital insurance) and Part B (medical insurance). While Medicare Supplement plans are not provided by the federal government or the Medicare program, companies selling Medicare Supplement plans must comply with certain laws that govern this type of insurance. One such consumer protection law is commonly referred to as the guaranteed right to renewal. If you purchased your Medicare Supplement plan in 1992 or thereafter, your insurance company cannot drop your coverage except in very limited circumstances.
Medicare Supplement plans generally can’t cancel your policy
Typically the insurance company that provides your Medicare Supplement plan cannot cancel your Medicare Supplement plan. In some cases, however, your plan may be cancelled.
Exceptions to a Medicare Supplement plan’s renewal guarantee
Here are some situations when an insurance company may cancel your Medicare Supplement plan.
- You provide inaccurate or misleading information on your Medicare Supplement plan application.
Sometimes in an attempt to secure coverage or to get a lower premium, a Medicare beneficiary might not answer truthfully or might withhold health information in response to specific questions on the Medicare Supplement policy application. If the insurance company finds out that you provided inaccurate information during the application, the company may cancel your Medicare Supplement policy.
So, you may want to carefully review your responses to the Medicare Supplement plan application before submitting it to the insurance company. You may need to check your records to confirm dates of treatment or diagnoses if you are unsure. If you don’t understand a question on the application, ask the insurance company for clarification.
Remember, also, if you apply for a Medicare Supplement plan during the Medicare Supplement Open Enrollment Period, you cannot be turned down, charged a higher premium, or made to wait for coverage because of a health condition. For most people this Open Enrollment Period is the 6-month time period that begins the month you are age 65 or older and enrolled in Medicare Part B.
- You fail to pay your Medicare Supplement plan premium.
If you don’t pay your premium, the insurance company has the right to cancel your policy. Insurance companies might mail a delinquency notice to alert you of a missed payment and the possible consequences. To avoid Medicare Supplement plan cancellation resulting from failure to pay the premium, make sure you pay your premiums on time. Contact the insurance company promptly if you receive a delinquent premium notice to let them know you’re sending a payment, or if you have payment-related questions or problems.
- The insurance company providing your Medicare Supplement plan becomes insolvent or declares bankruptcy.
If your insurance company cancels your Medicare Supplement plan because the company files for bankruptcy or goes out of business, you may be protected by a guaranteed-issue right to buy certain Medicare Supplement plans from other insurance companies who sell them in your state. You typically need to apply for the new policy no later than 63 days after your coverage from the cancelled policy ends.
A guaranteed-issue right means that you cannot be turned down by insurance companies offering certain Medicare Supplement plans. If you qualify for a guaranteed-issue right because of a company bankruptcy, you can buy a new Medicare Supplement plan without undergoing medical underwriting. If you had a Medicare Supplement plan that included creditable prescription drug coverage, you can also enroll in a stand-alone Medicare Part D Prescription Drug Plan at the time you lose your Medicare Supplement plan. Medicare Supplement plans sold today don’t include prescription drug coverage.
- You bought your Medicare Supplement plan before 1992, and the insurance company cancels your plan.
If you acquired your Medicare Supplement plan before 1992, it might not have a guaranteed renewal provision. The insurer can usually cancel your Medicare Supplement plan as long as it has the state’s approval to do so. You have the right to enroll in any of several Medicare Supplement plans available in your state if this happens. You typically need to apply for the new policy no later than 63 days after your coverage from the cancelled policy ends.
You can generally cancel a Medicare Supplement plan at any time of the year and continue to have Medicare Part A and Part B coverage. You can apply for a new Medicare Supplement plan without prescription coverage at any time of the year, but you might not get accepted into the plan if you have health problems. Also, medical underwriting may be required to qualify for a Medicare Supplement plan, unless your situation qualifies you for guaranteed-issue rights.
Also, keep in mind that if you cancel a Medicare Supplement plan with creditable prescription drug benefits, you can generally enroll in a stand-alone Medicare Part D Prescription Drug Plan during the Annual Election Period, October 15 – December 7 each year. If you were enrolled in a Medicare Part D Prescription Drug Plan when you cancelled the Medicare Supplement plan, your Medicare prescription drug coverage would be unaffected by your decision to cancel your Medicare Supplement plan.
To learn more about Medicare Supplement plans and other Medicare coverage options available where you live, feel free to contact me.
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- If you want to compare plans right now, use the Find Plans or Compare Plans button on this page.
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