Ralph Bovitz, CPA, PFS

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When Your Medicare HMO Stops Participating


By Ralph Bovitz, CPA, PFS 

     There continues to be much discussion about Medicare HMOs withdrawing coverage.  This advisory notice is intended ONLY if you are in a Medicare HMO.  If you are NOT in a Medicare HMO, you can disregard this notice or you may share it with friends, relatives or neighbors who are in a Medicare HMO. 

     If you are informed that your Medicare HMO is withdrawing from the market, it appears you should not leave the HMO environment before you receive a final notice of termination.  Instead, stay with the terminating HMO to the very end.  This appears to assure your ability to obtain a so-called Medigap policy without a health exam, if you decide to return to traditional Medicare, rather than enroll in another Medicare HMO.   

     Supplemental health insurance, known as “Medigap” insurance is purchased from a private carrier and is designed to cover the many gaps and required co-payments in traditional Medicare. Medigap carriers must grant you coverage, when you are coming out of a Medicare HMO that is terminating.  The coverage provided by a Medigap policy is normally part of an HMO, but not in a traditional Medicare environment.  The Medigap policy must be purchased separately. 

     Medigap policies vary widely in both coverage and premiums, so selecting the “right” one will take some effort, if your Medicare HMO withdraws from the market.

     To recap, if you are a member of a Medicare HMO that is terminating, you are entitled to enroll in traditional Medicare and if you do, you should obtain a Medigap policy. However, you should stay with your Medicare HMO until it terminates, in order to get the best Medigap policy.  The best Medigap policy covers the many gaps and required co-payments in traditional Medicare 











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