Have your cake and eat it too with Medicare trial rights

Medicare Advantage vs. Medicare Supplement. The debate is endless. And truly, the answer lies with whatever best fits your clients’ needs and ability to pay. But sometimes, the best way to learn about a product is to use it. And, Medicare trial rights allow enrollees to try both types of coverage, while still protecting their guaranteed issue rights. We’ll break down both trial rights and walk you through a common case study.

Trial right 1: New-to-Medicare

This is, perhaps, the most frequently misunderstood trial right. For eligibility, let’s get the information straight from the horse’s mouth:

“If you joined a Medicare Advantage Plan when you were first eligible for Medicare Part A at 65, you can buy certain Medigap policies sold by an insurance company in your state if you switch to Original Medicare within the first year of joining the Medicare Advantage Plan. You may also have an opportunity to join a Medicare drug plan at this time.”

The key part to remember here is “first eligible.” The trial right only exists when someone could have enrolled in Medicare. It does not depend on either of the enrollee’s Part A or Part B effective dates. That means that most people who delay enrollment beyond age 65 will not have access to this trial right.

Trial right 2: Switching back from a Medicare Advantage plan

Again, let’s get the definition straight from the source:

“If you drop a Medigap policy to join a Medicare Advantage Plan for the first time, you’ll have a single 12-month period (your trial right period) to get your Medigap policy back if the same insurance company still sells it once you return to Original Medicare. If it isn't available, you can buy certain Medigap policies depending on state law and whether you're new to Medicare on our after January 1, 2020. You may also have an opportunity to enroll in a Medicare drug plan at this time.”

This trial right is used most frequently. It does require that the enrollee first enroll in a Medigap plan. Then, after joining their first Medicare Advantage plan, they may safely return to their original Medigap plan within the first 12 months — without having to go through underwriting.

What protections exist when using a trial right?

No matter which trial right a beneficiary is using, they enjoy a few protections of the law. First, their policy cannot be medically underwritten. This means that insurers cannot deny or up-rate the member based on their health history. Second, they are guaranteed the right to buy specific Medigap plans they are eligible for – generally A, B, C, F, G, K, or L. However, enrollees with initial Medicare effective dates after January 1, 2020, may no longer enroll in plans C or F.

And, during the 12 months, enrollees are free to return to Original Medicare and pick up a Medicare Supplement Plan (although those using Trial Right 2 must return to the original Medigap plan if available). They can also enroll in a Medicare Part D prescription drug plan.

How does this work in practice?

We regularly guide agents of all experience levels through sticky situations. Recently, we had the opportunity to help one agent explore a client’s coverage possibilities.

The client had recently turned 70 and was planning to retire from an employer with 43 employees. Since the size of the employer meant that Medicare would pay secondary, the client had delayed enrollment in both Parts A and B. And yes, the prescription drug coverage was creditable.

Having done some of his own research, the client was adamant that they could use a trial right to sample both Medicare Advantage and Medicare Supplement. The client planned to first test-drive a Medicare Advantage plan for nine months, and then use (what he thought was) a trial right to get into a Medicare Supplement Plan G without any underwriting.

This was not the case. The client was not eligible for Trial Right 1 – their initial eligibility for Medicare Part A had passed several years ago. And, the client was not yet eligible for Trial Right 2 – they had not yet enrolled in a Medigap plan that could be dropped.

And so, the agent and his client developed a new game plan.

The client would first enroll in a High-Deductible Plan G to save on current and future rates, while getting a taste for how the plan worked and covered his costs. Before the carrier’s next scheduled rate adjustment in June, the client would use their Trial Right 2 to select a Medicare Advantage plan to test drive.

The pair is scheduled to meet again in October, where they’ll work together to select a primary source of coverage. And, they agreed, they’ll consider supplemental policies to fill whatever gaps may exist in that coverage.

Try before you buy?

Ultimately, there’s no solid publicly available data about how often you’ll run into a client who wants to use a trial right. Beneficiaries at large seem relatively uninterested in reviewing their plans – only 46% do so regularly. But, for those cases when a client is interested in experiencing their options, you now have a plan to help them get it done.