Can a Medicare Advantage company cancel my coverage?
Can a Medicare Advantage company cancel my coverage?
Medicare Advantage plans are not guaranteed renewable. So yes, your Medicare Advantage company can cancel your coverage. But it’s not as simple as it sounds.
Medicare Advantage plans can’t cancel just you
Medicare Advantage plans can’t single you out and cancel just your policy. This is a fear you may have that you will be cancelled due to your claims in the past year. You don’t have to be worried about that because it’s not like auto insurance where your company can cancel your policy at renewal if they decide to.
Medicare Advantage plans are an agreement with Centers for Medicare and Medicaid Services (CMS) and insurance carriers. Both CMS and the insurance company need to agree to continue the coverage each year. If either one decides not to then that plan will have to terminate coverage.
So it’s possible your plan could be cancelled, along with everyone in the county who has the plan. If this were to happen it typically occurs at the end of the calendar year. Regardless when it happens, you would have a set time period to enroll into a new plan.
Carrier goes out of business
Sometimes carriers just go out of business. This can happen any time of the year unfortunately. I helped agents in Florida who were dealing with their clients losing their coverage June 30th.
The carrier that went out of business that year was Physician’s United Plan (PUP). PUP had more than 38,000 members who had to pick a new plan within 60 days.
Obviously that was a stressful time for everyone involved because seniors were losing their coverage through no fault of their own. It was unexpected timing since plans are set for the calendar year. And they had a short timeframe to get new coverage in place.
Here is what one senior went through during that time.
“Behind the legal maneuvers and statistics are ordinary Marion County residents like 85-year-old PUP client Eileen Nierode.
“I had a call on Monday from my doctor’s office that they were canceling my appointment because PUP went bankrupt,” Nierode said. “I have neuropathy (in my feet) … I need to see the doctor.“
The homemaker and retired secretary said she feels abandoned by PUP and doesn’t know what to do next or how to get health care coverage.
“I had an appointment with the neurologist” today that was canceled. I’ve been seeing him for 15 years,” she said. “I don’t know what I’m supposed to do now.”
Companies are more likely to change benefits than cancel plans
In my experience, companies don’t want to cancel plans completely. So a more common occurrence is a change to the benefits or premium of a Medicare Advantage plan. If this happens then you can compare plans during the Annual Enrollment Period to see if there is another option you prefer.
Changing to another Medicare Advantage plan is a pretty smooth process at that point. If you want to go back to Original Medicare and pick up a Medicare supplement policy you will have to pass an underwriting review before being approved for the supplement.
Special Needs Plans
Special Needs Plans have additional eligibility rules compared with regular Medicare Advantage plans. There are 3 types of Special Needs Plans:
- Dual Eligible
- Chronic Condition
- Institutional
You can only apply for a Special Needs Plan if you meet the qualifications. And if your situation changes where you are no longer eligible for that plan you will be cancelled and have to choose a new plan.
Dual Eligible
Dual Eligible refers to being eligible for both Medicare and Medicaid. There are several levels of Medicaid coverage and Dual Eligible refers to all of them. Although your benefits on the plan may vary depending on your level of Medicaid coverage.
Medicaid is income and resource based. So if your income were to increase to the point of no longer being eligible for Medicaid then you would no longer be dual eligible. Which means you would need to choose a new plan.
Chronic Condition
There are 15 different types of chronic conditions according to CMS
There may not be a chronic condition Medicare Advantage plan available in your area though. And there likely isn’t a chronic condition plan available for every chronic condition.
But if you were to no longer have that chronic condition impacting your life then you would no longer be eligible for that specific Medicare Advantage plan.
Institutional
Institutional special needs plans are for people that have or are expected to have a stay of 90 days or more in a long term care facility. There is a complete list of eligible facilities but if you were to no longer need that stay then you would no longer be eligible for this plan and be cancelled.
RECAP
It is possible for a Medicare Advantage company to cancel your plan. But they cannot single you out and cancel just you. They would have to be cancelling every policy in that county. Medicare supplements are guaranteed renewable so you cannot be concerned. If that is really important to you then you may want to reconsider whether a Medicare Advantage plan is the right fit for you.
Mike Lovell
608-571-4461
Mike@askMedicareMike.com