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Illegal Medigap Practices


When shopping for a supplemental Medicare plan, you should be aware of illegal Medigap practices. In short, Medigap plans pay for the remaining costs Original Medicare doesn’t cover. These plans are available through private insurance companies and pay your outstanding balance after Medicare.

We want to make sure your money and identity stay safe. Now, let’s take a look at the seven most common ways scammers commit fraud using Medigap policies.

7 Illegal Medigap Practices

Medicare fraud disrupts the lives of millions of elderly Americans every year. Indeed, scammers often target seniors by deceiving them through financial abuse and identity theft. Additionally, scammers consider seniors to be ideal targets because they see them as more trusting and they often live alone.

Sadly, many seniors may not have the support of family members or friends. As a result, this leaves older people extremely vulnerable. Here are seven illegal practices scammers use to defraud the elderly.

  1. Claiming to be a Medicare representative when they are actually an insurance agent
  2. Stating that a Medicare Advantage plan is a Medigap policy
  3. Selling a Medicare Advantage plan when the client asks to stay on Original Medicare and add Medigap
  4. Claiming that a Medigap policy is part of the Medicare program
  5. Misuse names, letters, or symbols of federal programs
  6. Sell you a Medigap plan that’s not available in your state
  7. Lie or mislead you into enrolling in a Medigap plan

Claiming to be a Medicare Representative

It may be difficult to identify Medicare representatives. So, it’s important to understand what this role entails. In fact, these professionals can’t legally sell you Medicare. Their job is to provide information for people interested in learning more about Medicare. Of course, you should always be wary of anyone claiming to be a Medicare representative who attempts to sell you any Medicare policy.

Actual Medicare representatives will never contact you to enroll in a Medigap plan – or contact you at all unless you contact Medicare first. Unsurprisingly, these are illegal Medigap practices, as well as someone claiming to be a Medicare representative trying to sell you a plan at your residence.

Stating that a Medicare Advantage Plan is a Medigap Policy

Firstly, if anyone claims that a Medicare Advantage plan is a Medigap policy, you should know this is false. Don’t give them your information and end the conversation immediately. Each type of plans’ benefits are different, so someone trying to lead you to believe they’re the same is a huge red flag.

While both types of policies are available through private insurance companies, they are very different. One of the biggest differences is that Medicare Advantage plans come with limited provider networks. Meanwhile, with a Medigap plan, you can continue to see any provider who accepts Medicare.

Selling You a Medicare Advantage Plan When You Ask for Medigap

Scammers are often charismatic and very manipulative. While you should be open to learning about and exploring all of your Medicare options, you should also have a good idea of the coverage you want.

If you feel pressured into buying an Advantage plan, this could mean you’re not working with a licensed or ethical professional. You should never feel backed in a corner to purchase any plan.

Claiming a Medigap Policy is Part of the Medicare Program

Making sure you’re educated about Medicare is important in protecting yourself from falling prey to illegal Medigap practices. Medicare Supplements aren’t part of the Medicare program through the government.

Medigap is only available through private insurance companies. Remember this, and you’ll remain one step ahead of scammers and the inaccurate information they try to get you to believe.

Misusing Names, Letters, or Symbols of Federal Programs 

There are dozens of names and acronyms associated with Medicare. This often causes confusion and frustration amongst beneficiaries. Further, those looking to take advantage through illegal Medigap practices are aware and use this fact against victims.

Look out for whether any of the following agencies’ and programs’ names or acronyms are misused or misspelled:

  • Anything related to Social Security
  • U.S. Department of Health & Human Services (HHS)
  • Centers for Medicare & Medicaid Services (CMS)

Here are a few suggestions to validate insurance policies. First, if you have access to a computer, you can Google the name of a policy of interest. While a quick search will suffice, there are tools on Medicare.gov that are an excellent resource. For those who don’t have a computer, write everything down to go over with your agent.

Selling You a Medigap Plan That’s Not Available in Your State

Here’s where it gets tricky. Medicare Supplement plans are each identified by letters that correspond to the set of benefits that the plans consist of across all states and carriers.

Remember, an agent cannot legally enroll you in a plan in a state in which you don’t reside. Contact your state’s Insurance Department to verify that the plan is available where you live.

Lie or Mislead You into Enrolling in a Medigap Plan

Under federal law, you have rights regarding your Medigap coverage. It’s illegal for an agent to lie, pressure, or mislead you into purchasing Supplemental insurance.

Again, you cannot buy a Medigap plan unavailable in your state. Contact the inspector general if you experience any of the illegal Medigap practices mentioned above.

Inspector General’s Hotline

The Office of the Inspector General investigates and reviews allegations of Medicare fraud. This hotline allows you to file a complaint if you experience any of the seven illegal practices in this article.

You can also submit a complaint online. The agency suggests understanding its requirements beforehand. This will educate you on the types of claims they accept.

Understandably, you may feel overwhelmed by all of this information. However, being educated about illegal Medigap practices is one of the sure ways to safeguard your health, money, and information.

FAQs

Are two Medicare Supplement plans illegal?
It is not legal for more than one Medigap policy to be issued to one person at the same time.
Is it illegal to have Medicaid and Medigap at the same time?
It is usually not lawful for an agent to sell a Medicare Supplement plan to a dual-eligible Medicaid and Medicare beneficiary. However, there are some situations where an agent may sell a Medigap plan to someone with Medicaid.
Can a Medicare representative sell plans?
No, a Medicare representative is not a licensed agent. Therefore, they can’t sell policies and you should be alert to anyone who claims to be a Medicare representative and also tries to sell plans.

How to Choose an Honest Medigap Agent

You need a trusted agent who has experience selling Medigap policies to beneficiaries in your state. With that said, building a good relationship with your agent is crucial.

Also, keep in mind that you will never be charged a fee for working with an agent. Call the number above today or fill out our online rate form.

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Lindsay Malzone

Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

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