This Medicare Hack Could Save You Thousand of Dollars a Year [CNET]

If you’ve got a Medigap plan, you need to know about the birthday rule.

My dad called me up earlier this year to explain a new law in Kentucky that ended up saving him a huge chunk of change — more than $3,000 this year alone. Kentucky is the latest state to enact a Medicare “birthday rule” law (also called a “birthday law”), and while they’re not simple, these rules can make a big difference in your health care costs. 

While Medicare covers health care services like hospital stays, doctor visits and surgeries, once you reach your deductible, you’re on the hook to pay out of pocket for additional coverage. Medicare Supplemental Insurance, or Medigap, can help defray those out-of-pocket costs. These private insurance plans help Medicare enrollees pay for health care that isn’t covered by original Medicare.

Medicare participants can purchase Medigap insurance during a six-month period after they enroll in Medicare Part B. After that enrollment period, most states don’t offer an opportunity to switch your Medigap coverage without medical underwriting. However, nine states now provide a free window every year to shop around for less expensive plans. 

This “birthday rule” for Medigap insurance can help participants in certain states save big money by purchasing cheaper plans. Learn how the Medigap birthday rule works and whether your state participates.

What is Medigap?

Medigap, also known as Medicare Supplemental Insurance, is private health insurance that helps pay for gaps in Medicare coverage. It can cover costs such as deductibles, coinsurance and copayments.

Medigap insurance is largely regulated by states. That means that each state will have its own rules about which plans are available and when you can buy them. There are 10 types of Medigap plans offered by most states — A, B, C, D, F, G, K, L, M and N.

To purchase Medigap insurance, you must be enrolled in both Medicare Part A and Part B. You can’t be enrolled in a Medicare Advantage plan.

What is the ‘birthday rule’ for Medigap?

Medigap insurance plans are generally available for six months after you enroll in Medicare Part B. After your initial Medigap enrollment, you usually can’t change your supplemental insurance plan without medical underwriting — a process where insurance companies use physical exams and prior health records to determine your risk as a client.

The birthday rule for Medigap allows participants to change their Medicare Supplemental Insurance coverage once a year at will, with no waiting period, physical exam or risk of rejection for pre-existing medical conditions. That privilege is also referred to as a right of “guaranteed issue.”

This open window for changing your Medigap insurance is a period around your birthday, but the length of that time period and the rules for changing coverage vary from state to state. 

Medicare participants who take advantage of birthday rules are generally limited to new Medigap plans that provide equal or lesser value than their current coverage. For example, if you have Medigap Plan G, you can only switch to a different insurer offering Plan G or another plan with less benefits.

Which states offer the ‘birthday rule’ for private Medicare insurance?

As of August 2024, nine states allow Medigap participants to change their coverage during a period of time around their birthdays. Since no federal laws regulate the Medigap birthday rule, the rules are set by each state separately.

California and Oregon were the first states to enact the birthday rule for Medicare Supplemental Insurance, and seven more — Idaho, Illinois, Kentucky, Louisiana, Maryland, Nevada and Oklahoma — have followed since. Four states — Iowa, South Dakota, Vermont and Wisconsin — considered birthday-rule legislation in 2024 but have not passed any laws yet.

Here are the rules for each state that offers a Medigap birthday rule:

California: Medigap insurees can change their Medigap coverage to a lesser or equal plan for 60 days following their birthdays each year.

Idaho: Medigap insurees have 63 days after their birthday to switch Medigap insurance.

Illinois: Medigap insurees aged 65 to 75 have 45 days after their birthday each year to purchase a different Medigap plan from the same issuer as their current plan.

Kentucky: Medigap insurees have 60 days after their birthday to switch insurers for their Medigap plans. Participants are only allowed to swap identical plans (e.g. G for G).

Louisiana: Medigap insurees can change their Medigap coverage to another plan from the same issuer as their current plan from 30 days before their birthday until 63 days after.

Maryland: Medigap insurees can change their Medigap plan to one of equal or lesser value from their birthday until 30 days after.

Nevada: Medigap insurees can change their Medigap plan to one of equal or lesser value from their birthday until 60 days after.

Oklahoma: Medigap insurees have a period of 60 days starting on their birthday to change their Medigap plan to one of equal or lesser value.

Oregon: Medigap insurees have a period from 30 days before their birthday until 30 days after their birthday to change their Medigap plan to one of equal or lesser value.

For more on Medicare, see how premiums are expected to change in 2025 and learn whether you’re required to enroll in Medicare when you turn 65.