Can a Medicare Advantage Plan Drop You?

What is a Medicare Advantage plan?

Medicare Advantage (Part C) is a type of health insurance that’s purchased from private insurance companies. It typically provides extra coverage beyond what original Medicare (Part A and Part B) offers. Medicare Advantage plans vary, but most include coverage for prescription drugs, as well as vision and dental care.

Medicare Advantage plans are guaranteed issue. This means you’re guaranteed acceptance into the plan, provided you live in the plan’s service area and are eligible for original Medicare. The only exception to this rule is if you have end stage renal disease (ESRD), which we’ll discuss in more detail later.

You may be able to choose from among several different types of Medicare Advantage plans. We’ll take a closer look at these in the sections below.

Health Maintenance Organization (HMO)

HMOs require you to use doctors, hospitals, and other providers that are within a specific network, except in emergencies.

Preferred Provider Organization (PPO)

PPOs allow you to use doctors, hospitals, and other providers that are both within and outside of a specific network. Keep in mind that out-of-network providers will generally cost more.

Special Needs Plan (SNP)

SNPs provide coverage for people with limited incomes and specific health conditions. These include a wide range of chronic conditions and diseases, including dementia, diabetes, ESRD, and heart failure.

SNPs are also available for people in residential facilities, such as nursing homes, and those who are eligible for in-home nursing care.

Plus, SNPs include prescription drug coverage.

Medical savings account (MSA)

These plans combine high-deductible insurance plan options with a medical savings account that you use specifically to cover healthcare costs. MSAs don’t include prescription drug coverage.

Private Fee-for-Service (PFFS)

A PFFS is a special payment plan that offers provider flexibility. With a PFFS, you can see any Medicare-approved provider who accepts the payment terms and is willing to treat you. Many people with PFFS plans also enroll in Medicare Part D for prescription drug coverage.

Medicare Advantage and ESRD

An exception to the guaranteed acceptance rule for new enrollees is for people who have ESRD. If you have ESRD and haven’t had a kidney transplant, you may not be able to choose any Medicare Advantage plan you’d like.

You do have some options, though, such as SNPs. Original Medicare is also available to people with ESRD.

If you develop ESRD while on a Medicare Advantage plan, you won’t be dropped because of your diagnosis. If your current Medicare Advantage plan becomes unavailable for any reason, you’ll be given a one-time option to choose a different Medicare Advantage plan.

Why might I lose my Medicare Advantage plan?

Medicare Advantage plans typically renew automatically each year. But in some instances, your plan or coverage might end. If this happens, you’ll receive a notification either from your plan’s provider, Medicare, or both.

The following sections provide details on the reasons you might lose your Medicare Advantage plan.

Contract nonrenewal

Each Medicare Advantage plan goes through an annual review and renewal process by the Centers for Medicare & Medicaid Services (CMS). Sometimes, the CMS may decide to stop offering a specific plan. An insurer may also decide to discontinue a plan and make it unavailable to original Medicare beneficiaries.

If you’re enrolled in a Medicare Advantage plan that’s being discontinued for any reason, you will receive a plan nonrenewal notice. It will let you know that your plan is leaving Medicare in January of the next calendar year and will give you information about your options for coverage.

The nonrenewal notice should arrive in October. Then, in November, you’ll receive a second letter. This will remind you that coverage through your current plan will end soon.

You’ll have until December 31 to choose a different plan. If you don’t pick one by this date, you’ll automatically be enrolled in original Medicare. Your original Medicare coverage will start on January 1.

Plan annual notice of change

If you have a Medicare Advantage plan, you will receive a letter each September that outlines any changes to your plan.

The annual notice of change letter will come directly from your insurer, not from Medicare. It will explain the changes you can expect, starting in January of the next calendar year.

These changes may include updates to the plan’s service area. If you live in an area that will no longer be covered, you’ll need to choose a new plan that serves your area. If you don’t pick one, you’ll automatically be enrolled in original Medicare. Your original Medicare coverage will start on January 1.

Moving (change of address)

If you’re moving, check to see if your new address falls under your plan’s service area. Don’t assume that your coverage will continue, even if you’re not moving far from your current address.

In most cases, moving will trigger a special enrollment period that generally lasts for 3 months from the date of your move. During this time, you’ll be able to choose another plan.

Nonpayment

If you stop making payments on your plan’s premium, you will eventually lose coverage. Each insurer handles this situation differently but can usually make recommendations about your coverage options.

If you’re having trouble paying your premiums, contact your insurer’s help line or customer service department and let them know. In some situations, they may be able to work with you on payment options or point you in the direction of coverage that you can afford or is premium-free.

Who is eligible for a Medicare Advantage plan?

If you’re eligible for original Medicare, you will most likely be eligible for a Medicare Advantage (Part C) plan. You can choose from among many Medicare Advantage plans. Keep in mind that each one services specific areas, and you can only get a plan that’s available in your area.

Original Medicare is available to people ages 65 and over, provided they are either U.S. citizens or long-term residents. Medicare is also available to people of any age who have certain disabilities or health conditions.

A Medicare Advantage plan can’t deny you coverage due to a preexisting medical condition. When you apply, you’ll need to fill out a brief questionnaire about your health and any medications you take. You will also be asked if you currently have ESRD.

If you have ESRD, you’ll most likely get information about enrollment in an SNP. If you develop ESRD after enrollment in an Advantage plan, you will be able to keep your plan. You will also be given the option to switch to an SNP, if that feels like a better fit for you.

Changes coming in 2021

In 2016, Congress passed the 21st Century Cures Act, which expands plan options for those with ESRD. The new law allows individuals with ESRD to be eligible for Medicare Advantage plans, starting January 1, 2021.

If you also qualify for an SNP, though, you might still prefer the coverage this type of plan provides. Before open enrollment, review the different plans available in your area and choose the one that best fits your coverage needs and financial situation.

What is an SNP?

SNPs are designed to provide health insurance coverage to people who are eligible for Medicare and meet at least one of the following criteria:

• You have a disabling or chronic disease or medical condition.
• You live in a nursing home or other type of long-term care facility.
• You require nursing care at home.
• You’re eligible for both Medicare and Medicaid.

If you have an SNP, all your medical needs and care will be coordinated through your plan.

SNPs vary in terms of availability. Not all plans are available in every local area or state.

If your needs change and you no longer qualify for an SNP, your coverage will end within a specific grace period, which may vary from plan to plan. During the grace period, you will be able to enroll in a different plan that better fits your current needs.

There are three types of SNPs. Each is designed to meet the needs of a specific groups of people.

Chronic Condition Special Needs Plans (C-SNPs)

C-SNPs are for people who have disabling or chronic conditions.

Medicare SNPs limit membership in each plan to specific groups of people, such as those with certain medical conditions. For example, an SNP group may be open only to people with HIV or AIDS. Another might enroll only those with chronic heart failure, end stage liver disease, or autoimmune disorders.

This level of focus helps each plan create a formulary that provides access to specific medications its members might need. It also helps members access certain medical treatments they might need.

Institutional Special Needs Plans (I-SNPs)

If you are admitted to a medical facility for 90 days or more, you may qualify for an I-SNP. These plans cover people who reside in nursing homes, psychiatric care facilities, and other long-term facilities.

Dual Eligible Special Needs Plans (D-SNPs)

If you are eligible for both Medicare and Medicaid, you may also be eligible for a D-SNP. D-SNPs are designed to help individuals who have very low incomes and other issues receive optimum support and medical care.

What should I do if my plan changes?

If your Medicare Advantage plan changes, you will be given the opportunity to enroll in a new plan or go back to original Medicare.

You may wish to stick with the plan provider you already had but choose a different plan in your area. Or you can go with a different insurer or type of plan, such as a Part D plan plus Medigap coverage.

When to enroll in a new plan

If your plan changes, a special enrollment period will usually be available for 3 months. During this time, you can review your plan options and sign up for a new plan. You can compare Medicare Advantage plans and Medicare Part D plans through a tool on the Medicare website.

You’ll also be able to enroll in a new plan during open enrollment. This takes place each year from October 15 through December 7. If you miss both your special enrollment window and open enrollment, your coverage will continue automatically through original Medicare.

Because your Medicare Advantage plan will no longer be active, you won’t be able to enroll in a new Advantage plan during Medicare Advantage open enrollment. This takes place from January 1 through March 31 each year for people with an active Medicare Advantage plan.

You can enroll in a new plan at Medicare.gov or through your new plan’s provider.

Tips for finding the right plan

• Decide which types of health and medical services are most important to you. Some plans provide access to gyms and health facilities. Others provide emergency health coverage outside the United States.
• Make a list of your preferred doctors and providers, so you can make sure they’re on the provider list of the plans you’re considering.
• Check whether any medications you take regularly are included in a plan’s formulary, a list of prescription drugs the plan covers.
• Decide whether you need dental and vision coverage.
• Add up the money you spend on medical treatments annually to figure out how much you can afford to spend on a Medicare plan.
• Think about potential health conditions or concerns you may have for the upcoming year.
• Compare plans available in your area here.

The takeaway

• Medicare Advantage plans can’t drop you because of a medical condition.
• You may be dropped from a Medicare Advantage plan if it becomes unavailable or if it no longer services your area.
• You may also be dropped from a Medicare Advantage plan if you don’t make your payments within an agreed-upon grace period.

The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.