How do we handle the transition from Medicare Advantage to supplemental insurance?

2 answers | Last updated: Jun 18, 2010
A fellow caregiver asked...

During the course of my father's recent hospitalizations for a broken hip followed by pneumonia (He's 92 and did it bowling!), we discovered more than one disadvantage to the Medicare Advantage Plan my parents have. Our choice of skilled nursing facilities was sorely limited because the preferred facilities flatly refuse to accept the plan. The facility we had to use was "adequate" to be polite. And now, the bills are starting to roll in for the co-pays. More than one social worker told me my parents would be better served by Medicare plus supplemental insurance. I've found a supplemental insurance that looks promising. How do I handle the transition from the HMO to the supplemental insurance? How should I time this? Do we need to wait until all the bills related to his recent hospitalization are submitted to the HMO and paid by them or us (co-pays)?

Expert Answers

You and your father have now seen the side of Medicare Advantage plans that many people discover only after it's too late -- the fact that despite "advantage" in their name, these plans can place serious restrictions on the doctors and other providers (including nursing facilities, as you found out) that a plan member may use. If your father now wants to switch to a Medicare supplemental insurance policy (known as Medigap), the transition will depend on both his current Medicare Advantage insurance plan and on the Medigap policy he wants to buy.

In the first place, your father can only drop his Medicare Advantage plan during the plan's "open enrollment" period, which is the time during each year when the plan enrolls new members regardless of their medical condition. Some plans have an open enrollment period only one month a year, others several months, and some all year round. So, you first need to contact your father's plan directly to find out when the plan has its open enrollment. Whenever it is that your father can drop the plan, he needs to give the insurance company 30 days written notice. BUT YOUR FATHER MUST NOT DROP THE MEDICARE ADVANTAGE PLAN UNTIL HE HAS RECEIVED WRITTEN CONFIRMATION THAT HIS PURCHASE OF A NEW MEDIGAP PLAN HAS BEEN APPROVED AND IS IN FORCE (see below). To the extent that he has bills still coming in from his nursing facility stay, it doesn't matter when he makes the switch. The plan that was in effect at the time of his nursing facility stay determines who pays, regardless of whether he switches coverage before all the bills come in.

Whether your father drops his Medicare Advantage plan depends on whether he can buy a good and affordable Medigap insurance policy to replace it. Because he's not trying to buy a Medigap policy when he first turns 65, and because he's not being dropped by a Medicare Advantage plan, a Medigap insurance company is not obligated to sell him any particular policy. And the insurance company can set whatever terms, conditions, and premiums it chooses (unless the state where your father lives has special rules regarding sales of Medigap policies). So, even though you may have found a plan you feel is "promising," there's no promise from the insurance company that they'll sell it to your father. Because of your father's age and medical history, most Medigap policies either won't be offered to him at all, or will be offered only with extremely high premiums. In other words, just finding and applying for a plan you like is no guaranty he'll get it. So, until your father receives written evidence from the insurance company of coverage under a new Medigap policy, he needs to keep his Medicare Advantage plan.

Community Answers

Lindasd answered...

I went to a local talk given by the local rehab/nursing home admissions administrator. He talked specifically about medicare/medicaid/supplemental/advantage plans. I was so glad I did this. I have kept my mother on plain Medicare as a result. When I heard what the supplemental and advantage plans do to the length of time stays and how they control the benefits, I couldn't believe they could ever sell anything.

Problem is people believe the pitches given by the insurance companies. There are few ways to completely understand the restrictions. I recently considered enrolling my mom in an advantage plan due to her high prescription cost. It took me a lot, a really lot of time to find out that only one of the local hospitals was in the network and that the primary care doctors listed in their literature refused to take new patients due to payment issues with the company. I kept in mind the information from the talk I went to and really dug into the policy information. In the end I left mom on regular Medicare.

How can anyone get enough information? You have to understand what these insurance companies are doing to reduce the costs and it is hard to figure out the restrictions.