Medicare can be weird: Sometimes, bad news for beneficiaries can actually be good news. That’s the case for certain people who’ll be shopping for a 2025 Medigap policy during Medicare’s Open Enrollment Period, which ends December 7, 2024.Here’s why:Say you have a private insurer’s Medicare Advantage plan in 2024 and have decided to switch to Original Medicare for 2025. Then, you’ll likely also want to buy a Medicare supplemental policy (aka Medigap) to reduce out-of-pocket costs. That’s where problems can begin.When Medigap applicants get rejectedIn all but four states—Connecticut, Maine, Massachusetts and New York—if apply for a Medigap policy after the first six months of Medicare eligibility, the insurer can reject you due to a pre-existing condition or charge you more because of it. (A pre-existing condition could be anything from high blood pressure to diabetes to Alzheimer’s, according to a recent KFF health research group report.)“A Medigap insurer can generally turn you down for whatever reason they see fit,” says Ryan Ramsey, associate director of health coverage and benefits at the National Council on Aging.That lack of guaranteed Medigap coverage is the bad news.The good news for some Medigap shoppersThe good news, in a bizarre way, is that if your 2024 Medicare Advantage plan won’t be offered in 2025, you’ll be guaranteed acceptance when applying for a Medigap policy. That’s because a Medicare Advantage plan termination is an exception to the Medigap guarantee rules, creating what’s known as a Special Enrollment Period.Plan terminations have become increasingly common lately due to financial pressures on Medicare Advantage insurers.Mutual of Omaha will no longer offer Medicare Advantage next year. Humana won’t sell plans that currently cover 560,000 of its members and will leave 13 markets around the country. Aetna and Centene plan to exit a number of markets, too. People in some counties will have no Medicare Advantage options at all in 2025.“There is a likelihood that if people have Medicare Advantage plans that are no longer going to be offered, they will have this guaranteed-issue rights period with Medigap,” says Ramsey.Not always, though.If your Medicare Advantage plan won’t be offered and you’ve been in what’s called a consolidated plan, “you’re automatically moved into another plan by the same insurer in your area,” says Meredith Freed, senior policy manager for the Program on Medicare Policy at KFF.“In that case, you do not get a Medigap Special Enrollment Period because it’s not actually considered a termination,” Freed says.Which Medicare Advantage plans get cancelledMedicare Advantage plan terminations aren’t uncommon. From 2011 to 2020, about one in five plans were cancelled.They tended to be ones with lower Medicare star ratings, $0 premiums and a greater proportion of black beneficiaries, according to a study by Brown University School of Public Health professors David Meyers and Dr. Amal Trivedi.Trivedi thinks those plans may have been unprofitable for the insurers.“Plans with $0 premiums tend to attract people with lower incomes,” he told me. “With respect to having higher proportions of black beneficiaries, it is possible that the plans where people have more social risk factors [such as low incomes and being in racial ethnic minorities] may have greater than expected costs and been less profitable.”Other ways to be guaranteed a Medigap policyThree other ways Medicare Advantage members can get guaranteed Medigap policies in 2025 when switching to Original Medicare:They move to a new area where they can’t purchase coverage for the plan they had in 2024Their Medicare Advantage insurer will discontinue coverage in their areaTheir employer canceled their retiree health coverageHow a new rule could help Medigap applicantsA little-known Biden administration proposed rule, scheduled to take effect January 1, 2025, could guarantee Medigap coverage to any applicant regardless of health conditions.It’s a revision to a part of the Affordable Care Act known as Section 1557, prohibiting discrimination by insurers receiving federal funding that are principally engaged in health care.“This change, for the first time, would reach some Medigap insurers,” says Lindsey Copeland, Federal Policy Director of the Medicare Rights Center. But, she noted, “there’s a great deal of uncertainty about this.”The proposed rule is being challenged in courts. Even if it takes effect, no one knows how—or if—it will be enforced. And no one knows whether President-elect Trump will put the kibosh on it.So, if you hope to buy a Medigap policy for 2025, it’s best not to count on guaranteed coverage due to Section 1557.Medigap shopping advice for 2025If you want to swap out of Medicare Advantage and into Original Medicare and meet one of the Special Enrollment Period rules guaranteeing Medigap acceptance, start shopping for a 2025 Medigap policy before Open Enrollment ends.Once you’re approved, tell your Medicare Advantage insurer you’ll be moving to Original Medicare next year.The Medicare.gov site’s Plan Finder tool can help you choose among Medigap plans, identified by letters A to N. Each letter describes a different level of coverage and all insurers typically offer the same benefits for the same letter; Plans C and F are only available to people who were eligible for Medicare before January 1, 2020.“Some Medigap plans offer what are called wellness benefits,” says Freed. “So, they might charge a little more because they give you a discount on dental coverage or a fitness benefit that’s not available in a standard Medigap plan.”Each Medigap insurer sets its own premiums, which can range from about $700 a year to more than $6,000, depending on the breadth of your coverage and your deductible.Sometimes, premiums are based on your age. It’s wise to ask a Medigap insurer how much you’ll pay and whether your premiums will rise as you get older.“A community-rated plan, where everyone pays the same premium, is one that historically is going to be the most cost-effective over your lifetime,” says Ramsey.The most popular Medigap planPlan G, the most popular Medigap policy, is also the most comprehensive. But that doesn’t mean it will necessarily be the most expensive choice for you, says Freed.That’s especially true if you’ll buy a high-deductible Plan G whose premiums are dramatically less than for a standard Plan G because of its $2,870 deductible in 2025. Normally, the Plan G deductible will be $590—the deductible for Medicare Part B.You might want to work with a Medigap insurance agent to find the right policy for you. The American Association for Medicare Supplement Insurance has a directory of these agents.
