How to Go Back to Traditional Medicare from a Medicare Advantage Plan

Some people join Medicare Advantage because of its low premiums, bundled benefits, or extra services. Later, they may become frustrated by provider networks, prior authorization requirements, referrals, or restrictions on where they can receive care.

Returning to Original Medicare - sometimes called traditional Medicare - is possible. But there is an important catch. While you may have the right to return to Original Medicare during an appropriate enrollment period, you may not automatically have the right to buy a Medicare Supplement, or Medigap, policy.

For many retirees, that distinction is critical. Before leaving Medicare Advantage, understand all three pieces of the puzzle: Original Medicare, Medigap, and Part D prescription drug coverage.

Know What You Are Switching To

Medicare Advantage and Original Medicare are two different ways of receiving Medicare benefits.

With Medicare Advantage, a private insurance company administers your Medicare-covered services. Most plans use provider networks and many include prescription drug coverage.

With Original Medicare, the federal Medicare program administers your Part A hospital coverage and Part B medical coverage directly.

Original Medicare generally allows you to receive covered care from any doctor or hospital in the United States that accepts Medicare. However, Original Medicare by itself does not place an annual maximum on your out-of-pocket expenses.

That is why many people who use Original Medicare also purchase:

Think of the decision as changing an entire package, not simply cancelling Medicare Advantage.

When Can You Leave Medicare Advantage?

There are several opportunities.

The Annual Medicare Open Enrollment Period runs from October 15 through December 7.

During this period, you can leave Medicare Advantage and return to Original Medicare. The change generally takes effect January 1 of the following year. You can also enroll in a stand-alone Part D prescription drug plan during this period.

There is also a Medicare Advantage Open Enrollment Period from January 1 through March 31 for people already enrolled in Medicare Advantage.

During this period, you can leave your Medicare Advantage plan, return to Original Medicare, and enroll in a separate Part D plan. The change generally takes effect on the first day of the month after the plan receives your request.

Certain circumstances can also create a Special Enrollment Period. Examples include moving outside your plan's service area, certain changes involving Medicaid or Extra Help, living in or leaving an institution, or a Medicare Advantage plan terminating its Medicare contract. The rules differ depending on the circumstances.

The Medigap Problem You Need to Understand

Returning to Original Medicare does NOT necessarily guarantee that you can buy the Medigap policy you want.

When you first enroll in Medicare Part B, you generally receive a six-month Medigap Open Enrollment Period. During that period, insurers generally cannot reject you because of health problems.

Once that period has passed, federal law does not generally require an insurance company to sell you a Medigap policy unless you qualify for a specific guaranteed issue right. Depending on state law and your circumstances, an insurer may be permitted to ask health questions, charge more, or deny your application.

This creates a potentially dangerous situation.

You could leave Medicare Advantage expecting to replace it with Original Medicare plus Medigap - only to discover that the Medigap insurer will not accept you.

For this reason, investigate your Medigap eligibility BEFORE completing your switch whenever possible.

There Are Important Exceptions

Federal law provides guaranteed issue rights in certain situations.

For example, if your Medicare Advantage plan leaves Medicare, stops serving your area, or you move outside its service area, you may have special rights to purchase certain Medigap policies when returning to Original Medicare.

There is also an important "trial right."

If you joined Medicare Advantage when you were first eligible for Medicare at age 65 and decide within the first year that you want Original Medicare instead, you may have special rights to buy Medigap.

Similarly, if you previously had Medigap, dropped it to try Medicare Advantage for the first time, and return to Original Medicare within the applicable 12-month trial period, you may have special rights to obtain Medigap coverage.

States may provide additional Medigap protections beyond federal requirements. Check with your State Health Insurance Assistance Program, known as SHIP, or your state insurance department.

Do Not Forget Prescription Drugs

Most Medicare Advantage plans include prescription drug coverage.

Original Medicare generally does not.

If you return to Original Medicare, you may therefore need a stand-alone Medicare Part D prescription drug plan.

Do not simply choose the cheapest premium.

Compare:

Going 63 days or more without creditable prescription drug coverage can eventually result in a Part D late enrollment penalty.

A Practical Step-by-Step Approach

Step 1: Confirm that your doctors accept Original Medicare.

Original Medicare provides broad access, but that does not mean every doctor accepts Medicare. Check before switching.

Step 2: Investigate Medigap first.

Determine whether you have guaranteed issue rights or whether medical underwriting will apply.

If underwriting applies, ask insurers whether you are likely to qualify before assuming that Medigap will be available.

Step 3: Compare Medigap premiums.

Standardized Medigap policies with the same letter provide the same basic benefits regardless of which insurance company sells them, although premiums can differ substantially.

Step 4: Select a Part D plan.

Enter your prescriptions and pharmacy information into Medicare's plan comparison system rather than selecting a plan based solely on premium.

Step 5: Make the Medicare Advantage change during an eligible enrollment period.

You can make changes through Medicare or follow the applicable Medicare enrollment procedure.

Step 6: Coordinate effective dates.

You do not want your Medicare Advantage coverage to end before your replacement arrangements begin.

Step 7: Confirm everything.

Keep written confirmation of:

Do not rely solely on a salesperson's verbal assurances.

Having children does not eliminate the need to understand the rules.

A child can help compare plans, organize prescriptions, confirm doctors, and keep copies of enrollment documents. But you should remain involved in the decision whenever possible.

Consider giving a trusted child appropriate health care and financial authority before an emergency makes assistance necessary.

Build a process that does not depend on having a family member available.

SHIP counselors provide free, individualized Medicare counseling and are not insurance salespeople. Medicare can also provide assistance.

Keep a simple Medicare file containing:

If you work with a trusted friend, professional fiduciary, attorney, or other adviser, make sure that person knows where your Medicare records are located.

The safest sequence is usually:

Investigate Original Medicare.

Then investigate Medigap eligibility.

Then investigate Part D.

Then coordinate the switch.

The order matters.

Original Medicare can provide tremendous freedom of choice. For some people, returning to it is exactly the right decision. But Medicare Advantage can be much easier to leave than Medigap can be to obtain.

Do your homework before crossing that bridge.