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Suspending coverage if you or your spouse are working
Under federal law, Medicare beneficiaries under age 65 have the right to suspend their Medigap policy benefits and premiums, without penalty, if they have coverage through an employer group health plan. This right helps you if you are disabled but still working: You can enjoy all your employer benefits without having to give up your Medigap policy permanently.
As long as you are eligible for Medicare because of a disability, you can suspend your Medigap policy at any time while you have employer group health insurance. In order to suspend your Medigap policy, you must call your Medigap insurance company and let them know that you want to suspend your benefits and premiums.
If, for any reason, you lose your employer group health plan coverage, you can get your Medigap policy back. Please keep in mind that:
- You must tell your Medigap insurance company that you want your policy back within 90 days of losing your employer group health plan coverage.
- Your Medigap benefits and premiums will start again on the day your employer group health plan coverage stops.
- The Medigap policy must have the same benefits and premiums as it did before (it must be the same as if you had never suspended your coverage).
- Your Medigap insurance company can't refuse to cover care for any pre-existing conditions you have.
Suspending coverage if you get Medicaid
If you have a Medigap policy and then become eligible for Medicaid, you can suspend your Medigap policy for up to two years (24 months). This right helps you if you cannot afford your Medigap premiums and are worried about losing your policy due to nonpayment of premiums.
To suspend your policy, simply contact your Medigap insurance company within 90 days of getting Medicaid and let them know. If you become ineligible for Medicaid during the two-year suspension period, you can get your Medigap policy back with the same benefits and premiums as before. You must notify your insurance company if you want to activate your policy during this period.
If you lose Medicaid eligibility after your policy has been suspended for more than 24 months, insurance companies may treat you as a new applicant or lapsed policyholder. That means they can deny coverage or classify you as high risk and charge you higher premiums. You may also be subject to a pre-existing condition waiting period for up to 6 months or be charged a higher premium because of your age when you purchase the new policy.
You always have the option of keeping your Medigap policy active so you can see doctors that do not accept Medicaid. This can be expensive, however, so make sure you need this extra coverage before deciding whether to suspend your policy or keep it active.
It's also important to know that if you already have Medicaid, it is not legal for an insurance company to sell you a Medigap policy unless Medicaid pays your Medigap premium or Medicaid only pays all or part of your Medicare Part B premium.