Can you save money by dropping a Medigap policy?
I have a Medicare supplement plan that costs almost $200 a month. I believe that if I drop this plan and switch to Medicare Advantage, I will save money, possibly up to $150 a month. What do you think of that? George
There is little doubt that George would save money on premiums by switching from these two policies to a Medicare Advantage plan that includes prescription drug coverage, known as an MA-PD plan. However, George needs to remember two important points.
One, Medicare Advantage plans are "pay as you go." There can be deductibles, coinsurance, and copayments for medical services. George will write checks until reaching the plan's out-of-pocket maximum. In 2025, the maximum limits allowed by Medicare will be $8,850 for in-network services and $14,000 for in- and out-of-network combined. As long as George stays healthy, he can save money but if he expediences medical issues or has an accident, he could pay more.
Two, depending on where George lives, once he makes the switch, he might not be able to switch back to a Medicare supplement plan, also known as a Medigap policy. If Medicare Advantage does not work out and he wants to go back to a supplement plan, he would most likely have to demonstrate insurability. If George has pre-existing health issues, the Medicare supplement plan could delay his coverage, increase the rates, or deny coverage completely. George must evaluate his options and his health carefully.
Because states can have different rules regarding Medigap policies, check what applies to you. A handful of states offer times when a Medicare beneficiary has a guaranteed right to a Medigap policy.
Last updated: 12-09-2024