Are you nearing the age of Medicare enrollment and going all out to learn about federal health insurance? Make sure you also learn how to protect yourself from falling prey to shams and scams. You can still get information about various Medicare policies and their enrolment processes. In an attempt to help you with that, today, we will highlight some common illegal Medigap enrollment practices that you should watch for.
What is Medigap?
For those who may not know, Medigap, as the name suggests, is a insurance that fills the gaps of Original Medicare. Medigap policies are designed to improve health coverage for Medicare enrollees by helping to reduce their out-of-pocket costs.
It’s important to note that Medigap works with Original Medicare to cover your health-related. It’s not an alternative to Original Medicare, as many mistakenly believe. Since your Medigap enrollment adds to Original Medicare and improves its coverage, it’s also called Medicare Supplement.
There are ten different types of Medigap policies available. Unlike Original Medicare, these are offered through private insurance companies, increasing the likelihood of fraud and scams.
11 Unlawful Medigap Practices to Watch for
Unfortunately, the world of Medicare is rife with scams and frauds. There are two main reasons – there are lots of private agents involved, and seniors are easy targets. To protect yourself or a loved one from Medigap frauds, beware of the following illegal practices. Some insurance providers/agents will often use to abuse Medicare enrollees financially:
1. Claiming to be Medicare Representatives
Anyone can claim to be a Medicare representative. There is no certain way to figure out if they are saying the truth or lying. You must be aware of what a Medicare representative can and cannot do. A real Medicare representative will never do something against the law. They know about what they are legally entitled or prohibited to do can help make it easier to identify scammers.
First things first – Medicare representatives can’t sell you Medicare plans. This means they won’t call or email you asking to enroll in a Medicare supplement plan. In fact, real Medicare representatives won’t even contact you on their own unless you contacted Medicare first. You must have made some inquiries and are expecting to hear back from them on some matter.
The job of Medicare representatives is to educate people about Medicare. This will help you navigate the world of federal health insurance by providing the correct information. Therefore, you should be wary of anyone who tries to sell you a Medigap plan, or any Medicare policy per se, while claiming to be an official Medicare representative.
2. Pressure You into Buying Medigap Coverage
The Medicare system was established to make the lives of common people easier by helping them pay for their health costs. While a Medicare Supplement plan does offer great help in reducing your out-of-pocket costs and hence, can be a great investment, no one can force you into buying a Medigap plan.
Enrolment in Medicare Supplement is optional. Every Medicare enrollee has the right to decide for themselves if they want to buy a Medigap plan or not. An insurance agent can only guide you about the supplemental policies, but it’s illegal for them to pressure you into buying them.
It’s important to note that insurance agents may also lie about Medigap plans to make you buy one. They may tell you that it’s mandatory to have a Medicare Supplement policy or quote you wrong figures about how much you would have to pay out of pocket without a Medigap plan and with it, all to mislead you into buying the supplemental insurance.
The only way to identify this fraud is to acquire the right knowledge about Medicare Supplement, so you can easily figure out if someone is lying to you. Remember, Medigap coverage is optional and designed to improve your Original Medicare coverage by paying costs that it doesn’t. Most Medicare Supplement plans do not offer any additional coverage. Anyone telling you otherwise is lying, and you should run away from them.
3. Pressure You to Switch to a Different Policy or Company
For Medicare Supplement plans, insurance agents typically earn a set percentage of the annual premiums. This can vary across states, companies, and different Medigap enrollment plans. The job of an insurance agent is to help Medicare enrollees find the right Medigap plan as per their needs. However, things are far from perfect in reality. It’s not uncommon for insurance agents to prioritize their commissions over an enrollee’s needs. They shouldn’t push you into buying plans with higher commission rates. Moreover, insurance agents often force people to switch to a new plan after a while because the commission percentage for the first couple years (enrollment commission) are higher for Medigap plans than in the following years (renewal commission).
4. Asserting that Medicare Supplement is the same as Medicare Advantage
Nothing can be farther from the truth. Medicare Advantage and Medicare Supplement are two different Medicare policies, each with its own set of benefits (and limitations). An insurance agent telling you that they are one and the same either lacks information themselves or is lying to you. In any case, it’s a sign that you should not work with them.
One of the main reasons people are often fooled into believing that Medicare Advantage is the same as Medicare Supplement is that both are offered through private insurance companies. However, the two are entirely different. The primary difference between Medigap and Medicare Advantage is that the former works with Original Medicare and builds upon it, while the latter is a stand-alone health insurance plan. In other words, Medicare Advantage is an alternative to Original Medicare and works independently. You need to have Original Medicare to enroll in a Medigap policy, but that’s not the case with the Medicare Advantage plan, as that replaces Original Medicare.
Another difference between Medicare Supplement and Medicare Advantage is that Medigap works everywhere where Medicare is accepted, but Medicare Advantage policies come with their own set of provider networks.
An insurance agent trying to make you believe that Medicare Advantage and Medicare Supplement are two names of the same policy is either incompetent or a scammer. In both cases, run away from them.
5. Try to Sell You a Medicare Advantage Plan When You Clearly Ask for a Medigap Plan
This is another red flag that can help spot scammers in the Medicare industry. However, it can be a little difficult to spot since scammers are generally very good at masking their manipulative tactics as genuine advice. They may make you feel as if they are just giving you different options to consider or telling you about a better alternative to Medicare Supplement, i.e., Medicare Advantage. But, in reality, they would be trying to convince you to buy a Medicare Advantage plan instead of the Medigap one that you came to them for.
One thing you can do to identify this scam is to do your homework before going to an insurance agent. Know what exactly you need coverage for, and once you do, don’t let anyone push you into buying a plan with less or more coverage. Another tactic to deal with this common Medigap illegal practice is not to rush the decision-making process. If your agent presents you with a Medicare Advantage plan saying that they want you to explore all the available Medicare options, take your time to learn about and evaluate your choices.
A good, ethical, professional insurance agent will never pressure you into buying a particular plan. They will just guide you about various options, telling you both the pros and cons, advantages and limitations for each, and then let you make the final decision.
If you have the slightest feeling that the agent you’re working with is pushing you for a Medicare Advantage plan instead of a Medigap policy that you’re asking for (or any plan against your wish), walk away.
6. Selling You a Medigap Policy When They Know You Have a Medicare Advantage Plan
Just like an insurance agent can’t force you to buy a Medicare Advantage plan when you’re asking for a Medigap policy, they can’t sell you Medicare Supplement when they know you’re enrolled in Medicare Advantage. The only condition where insurance agents are legally permitted to sell a Medigap plan to Medicare Advantage enrollees is when your MA plan coverage is known to end before that for Medicare Supplement begins.
7. Selling You a Medigap Plan When You Have Medicaid
Most often than not, people with dual-eligibility (i.e., those who are eligible for both Medicare and Medicaid) do not need Medicare Supplement to have their out-of-pocket healthcare costs covered. Medicaid does that. There are only a few exceptions to this condition. Unless you qualify for those specific conditions, an insurance agent cannot sell you a Medigap plan if you have Medicaid.
Get in touch with a Medicare representative to know if you need a Medicare Supplement policy while having Medicaid. Don’t just rely on what an insurance agent tells you. They may just be trying to make some more money.
8. Selling a Second Medicare Supplement Policy
Laws that govern the Medicare industry prohibit insurance companies from selling a Medigap policy to people that they know already have one. The only exception to this rule is when a beneficiary provides a written statement or guarantee to cancel their existing Medigap policy before the new one becomes effective.
9. Selling a Medicare Supplement Plan Not Offered in Your State
There are several different types of Medigap policies. While their coverage remains the same across the country (wherever they are offered), they are not all available in every state.
Just like Medicare Advantage and Medicare Prescription Drug plans, Medigap plans vary by state. Bigger and densely-populated states generally have more options than smaller or less populated ones.
This is where things can get tricky, and potential beneficiaries become more likely to fall prey to financial fraud. Since premiums for different Medigap policies vary, scammers may propose high-premium plans not available in the state a beneficiary resides in. This is against the law. You can’t enroll in a Medicare plan that’s not offered in your state. But, insurance agents may deceive people who they know lack knowledge about Medicare by saying things like they have special permissions or connections that enable them to enroll you in a Medigap plan in some other state.
The best way to avoid falling prey to this Medigap scam is to always check with your State Insurance Department and confirm that the proposed Medicare Supplement plan is available in your state.
10. Claiming That Medigap or a Certain Medigap Policy is Part of the Medicare Program
Medigap policies are standardized, meaning same benefits are offered through all companies. Anyone telling you otherwise is providing wrong information. Whether it’s a deliberate attempt or in deliberate, the insurance agent asserting that a Medigap policy or Medicare Supplement, on the whole, is part of the federal government’s Medicare program is not the one you should work with.
11. Misuse of Various Names, Symbols, and Letters Associated with Federal Agencies or Programs
Medicare is a complex web of insurance plans. There are dozens of terminologies, names, symbols, letters, and acronyms associated with it. Since new enrollees aren’t often much aware of them, it’s easier for insurance companies and agents to use them to misguide beneficiaries. The names and terms most often misused in the Medicare industry: include (but are not limited to) Social Security, the U.S. Department of Health & Human Services (HHS), and Centers for Medicare & Medicaid Services (CMS).
Refer to our Urban Dictionary of Medicare to know what various common Medicare terms and acronyms mean, so you can figure out when they are misused.
Learn About Medicare to Protect Yourself from Fraud
Frauds and scams are common in the Medicare industry because older adults generally make easy targets. Beneficiaries are typically not much aware of the technicalities of how Medicare works. They do not have much support from family (as many live on their own), and trust others easily. Seniors make ideal targets for scams and frauds, including both identity thefts and financial abuse.
There are ways to avoid falling prey to Medicare frauds and scams. To avoid Illegal Medigap practices, you must have knowledge about Medicare. Working with a trustworthy insurance agent is a must. Unfortunately, we find out when it is too late. The best way to avoid this mistake is to educate yourself on the facts. Do some of your research before going to an insurance company.
Moreover, remember the following things to help protect yourself from any kind of Medicare fraud, Medigap, and beyond:
- Medicare representatives never call you to sell any plan.
- Medicare representatives never visit your home.
- Medicare representatives never ask for your Medicare Number or any other personal information.
- Unless you called them first and requested it, Medicare would never enroll you in an insurance plan over the phone.
- Never share your Medicare Number with anyone unless you’re 100% sure they are Medicare representatives.
- Check your Medicare bills regularly to detect any false charges.
- Report any suspicious activity or fraudulent Medigap practice to Medicare or the Office of the Inspector General. The Office of the Inspector General has a hotline. They accept complaints with regards to any of the illegal Medicare Supplement practices highlighted in this post.
Work with United Insurance to Avoid Medigap Frauds – We Guarantee Transparency
Insurance companies have got a bad rap. We know it and agree that there are bad players in the industry. But, this doesn’t mean that every insurance company or agent uses wrong tactics to mislead their customers. Many prioritize their clients’ needs over their profits too. We at United Insurance can proudly say that our clients put them in the second category. For us, nothing matters more than your needs, budget, and satisfaction. Therefore, we do not rush you into buying a Medicare Supplement plan (or any other Medicare policy). Our Medicare agents help you figure out and evaluate all your Medicare Supplement options. This will be according to your needs and budget and then let you make the decision.
Get in touch with us for all your Medigap queries. We can help find the right Medicare Supplement plan for yourself.