Up to 3.5 Million May Lose Their Medicare Advantage Plans - Don’t Miss This Medigap Right

As many as one in ten Medicare Advantage enrollees, totaling approximately 3.5 million Americans, could face plan terminations in 2027. If your plan is among those being discontinued, this situation may present a unique opportunity to acquire a Medigap plan without medical underwriting. However, this opportunity is contingent on the specific reason your plan is ending, your subsequent coverage choice, and, critically, whether you act within the designated timeframe. If you receive a termination notice for your plan, you have important decisions to make. This discussion will outline your available options, pertinent deadlines, and steps to ensure your medical and prescription coverages are secured for January. Even if your plan is not ending, understanding which changes grant special rights and which do not is beneficial. Historically, it was uncommon for Medicare Advantage enrollees to be compelled to seek new plans due to their existing plans exiting the market. Research indicated an average exit rate of approximately 1% annually from 2018 to 2024. This figure increased to 6.9% entering 2025, and for 2026, about 2.9 million individuals, roughly one in ten enrollees studied, were impacted by plan exits. For 2027, insurers are announcing further changes. Humana, for instance, anticipates its plan exits alone will affect around 600,000 members. Current industry estimates suggest that up to 10% of Medicare Advantage enrollees could be impacted by terminations in 2027. While the 2026 figures are based on confirmed data, the 2027 estimate, representing roughly 3.5 million people, is substantial and will be finalized with the release of 2027 plans. The immediate goal is to ensure that anyone receiving a termination notice understands their subsequent options. Consider Linda, 74, who has been enrolled in Medicare Advantage for years. She values the low monthly premium, sees multiple specialists, and relies on continuous prescription coverage. This fall, she receives notification that her specific Advantage plan will not be offered in her area in 2027. Linda might initially consider switching to another plan with the same insurer. While this is an option, a different plan, even from the same insurer, could have a distinct doctor network, varied drug coverage, and different out-of-pocket costs, contributing to the complexity of insurance in the U.S. Linda also has another path to consider: Original Medicare, supplemented by a Medigap policy and a separate Part D drug plan. It's crucial to understand the distinction: a Medicare Advantage plan, offered by a private insurer, provides access to Medicare benefits. A Medigap plan, conversely, complements Original Medicare by covering some or all of your share of Medicare-approved costs. Generally, you cannot simultaneously have a Medicare Advantage plan and a Medigap plan. A key point for Linda is that leaving Medicare Advantage and purchasing a Medigap policy are distinct actions. Outside of specific protected periods, Medigap policies can factor in your medical history, potentially leading to higher premiums or even denial of coverage. If Linda developed a serious health condition in her 70s, this condition could typically impede her ability to secure a Medigap plan. However, the termination letter for her Medicare Advantage plan could alter this situation. Under federal regulations, if a Medicare Advantage plan withdraws from Medicare or ceases operations in a specific area, an individual who transitions to Original Medicare generally gains a guaranteed issue right to purchase certain Medigap policies. This means the insurer must sell an eligible policy, cannot charge more or deny coverage based on health status, must cover pre-existing conditions, and cannot impose a Medigap waiting period. For example, if Linda developed heart disease after joining Medicare Advantage, she might have assumed this condition would disqualify her from Medigap. However, her plan's termination provides a temporary window to bypass typical medical underwriting. The term "temporary" is critical. This right applies if she moves to Original Medicare. If she opts for another Advantage plan, she is not purchasing Medigap, and if she decides to leave that subsequent Advantage plan later, the guaranteed issue window may have closed. Furthermore, "guaranteed issue" does not imply affordability; Linda is still responsible for full premiums, which vary based on location, age, insurer, policy type, and pricing method. This protection guards against health-based rejection or pricing, but not against future premium increases. Medigap plans are standardized by letters, with each letter representing a uniform set of benefits. For instance, a Plan G from one insurer offers identical benefits to a Plan G from another, though premiums may differ significantly. If Linda's Medicare Advantage plan is ending, this federal guaranteed issue right applies to specific Medigap policies, not all. Plan G, for example, is a protected option for individuals newly eligible for Medicare since 2020. Plan N is not on this particular federal list, though other plans may qualify, and state rules can expand her options. Linda doesn't need to memorize every plan letter; she simply needs to inform her insurer that her Medicare Advantage plan is ending and inquire which Medigap policies she is eligible for under guaranteed issue rights. She can then compare the benefits and prices of those plans. It is essential to carefully review all paperwork. An Annual Notice of Change details modifications to your plan for the upcoming year, such as changes to co-pays, prescription drug coverage, or additional benefits. A non-renewal or termination notice, however, explicitly states that your current plan will not be available next year. Not all notices grant the same Medigap rights. If your plan leaves Medicare or stops offering coverage in your area, this can trigger the Medigap rights discussed. Medicare's guide also lists moving outside your plan's service area and certain significant network changes as qualifying situations. However, if Linda's plan remains but her doctor leaves the network, or co-pays for specialists increase, or dental allowances or drug formularies change, these situations, while valid reasons to seek a new policy, generally do not trigger federal guaranteed issue rights on their own. Always verify information directly; headlines about Medicare Advantage changes may not apply to your specific plan. If your notice is unclear, contact your insurer and ask if your specific plan will be available in 2027. If not, inquire with Medicare or your State Health Insurance Assistance Program (SHIP) whether this grants you a Medigap guaranteed issue right and what documentation is needed. You can also consult a licensed Medicare advisor, such as those through Chapter. It's crucial to retain the actual notice, any related emails, and the postmarked envelope, as Medicare states these documents may be necessary to prove your rights. Linda must compare the costs of her choices. One path is another Medicare Advantage plan. Many advertise a $0 premium, but Linda would likely still pay a Part D premium. A $0 premium does not mean $0 out-of-pocket costs for care; depending on the plan, she may incur deductibles, co-pays, or co-insurance for various services. The plan likely has an annual out-of-pocket limit, which she should ascertain. Prescription drugs are handled separately. She should also confirm if her current doctors or hospital remain in-network, if her prescriptions are still covered, and if there are changes to prior authorization requirements. If a Medicare Advantage plan meets her needs and budget, it could be a suitable choice; having a Medigap right doesn't obligate her to use it. The second path involves Original Medicare plus Medigap and Part D. Linda would pay her Part B premium, the Medigap premium, and a separate Part D premium. This option is generally more expensive monthly. In return, a Medigap policy can cover a significant portion of her share of Medicare-covered medical bills, making costs more predictable. The premium, including any deductibles or co-pays, depends on the chosen Medigap policy. She should also consider any loss of vision or dental benefits or other perks offered by Medicare Advantage if she switches. It's advisable to compare costs for both a relatively healthy year and a year with a major health issue under each Advantage plan (doctors, prescriptions, imaging, hospital stays) versus Original Medicare with Medigap (annual premiums and uncovered medical costs). Linda doesn't have to navigate this alone. Medicare advisors at Chapter can help compare plans available in her area, aligning with her network, doctors, prescriptions, and budget, at no cost to her. Chapter searches nationwide, including plans they are not contracted to sell, though they sell many. Customers working with Chapter report an average annual savings of $1,100, but individual results vary. Deadlines are critical for Medicare. 1. **Plan Information:** By the end of September, review annual materials from your current plan. If it's ending, read the separate termination notice, noting the end date and enrollment instructions for your next plan. Next year's plans are typically available for comparison around October 1st. 2. **Medicare Annual Open Enrollment:** This runs from October 15th through December 7th, 2026. Changes made during this period generally take effect on January 1st, 2027. Individuals whose plans are ending may have an extended special enrollment period, but enrolling later could result in a coverage gap in January, so enrolling in the fall is preferable. 3. **Medigap Guaranteed Issue:** Medicare's guide generally allows applications to begin 60 days before your current Advantage coverage ends and up to 63 days afterward. Confirm the specific date on your termination notice. For a plan ending December 31st, Medigap applications can typically begin around November 1st, with the window usually extending through early March. However, it's advised not to wait until February to apply for coverage needed in January. While still covered by your Medicare Advantage plan, you can compare and select another Advantage plan. If your plan is terminating, this is your special window to consider a Medigap plan. Compare all choices. If opting for Medigap, inform the insurer that your Medicare Advantage plan is ending and choose a start date that aligns with your old plan's termination. You can apply before your old plan ends, but Medigap coverage cannot begin while you are still enrolled in Medicare Advantage. Note that these are different timelines; December 7th is not necessarily the last day to exercise your Medigap right. Delaying enrollment could lead to a gap in medical and prescription drug coverage. If Linda mistakenly assumes Medicare will automatically place her in a comparable plan, and her Advantage plan ends without her selecting another, she would generally revert to Original Medicare, but without a Medigap policy and without prescription drug coverage. This could leave her without prescription coverage and with no annual limit on out-of-pocket medical costs in January, representing a significant financial risk. Even if she chooses another plan with the same insurer, she must review the details, as networks, participation, and costs may differ. If you receive a letter like Linda's, follow this sequence: 1. **Identify your plan's status:** Is it ending, leaving your area, or continuing with changes? Save the letter and postmarked envelope. Confirm the termination date with your insurer if applicable. 2. **List your healthcare needs:** Document your doctors, hospitals, prescriptions, pharmacies, and any planned care for 2027 to facilitate individual comparison