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Illegal Medigap Practices

When shopping for a supplemental Medicare plan, you should be aware of illegal Medigap practices. In short, Medicare Supplement plans (Medigap) 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.

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We want to make sure your money and identity stay safe. Take a closer look at the seven most common illegal Medigap practices on the market.

7 Illegal Medigap Practices

Medicare fraud disrupts the lives of millions of elderly Americans every year and can come in many forms. Some are illegal practices, while others involve misdeeds from criminals looking to deceive.

Unfortunately, seniors are often targets of criminals committing financial abuse and identity theft. Because seniors are trusting and often live alone, criminals believe them to be the ideal target and prey on their vulnerabilities to steal from them.

Here are seven illegal practices criminals 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. Misusing names, letters, or symbols of federal programs.
  6. Selling you a Medigap plan that’s not available in your state.
  7. Lying or misleading you into enrolling in a Medigap plan.

Claiming to be a Medicare Representative

Medicare representatives can’t legally sell you Medicare policies. They 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. Medigap door-to-door solicitation is illegal.

Stating that a Medicare Advantage Plan is a Medigap Policy

Know that anyone stating that a Medicare Advantage plan is a Medigap policy is lying. Don’t give them your information and end the conversation immediately. When you are familiar with Medicare Advantage vs. Medicare Supplement coverage, you will understand that someone trying to tell you they are 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 assignment. You also can’t have both a Medicare Advantage plan and a Medigap plan simultaneously.

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Selling You a Medicare Advantage Plan When You Ask for Medigap

One unfortunate illegal Medigap practice enrollees can encounter is being pressured into purchasing a Medicare Advantage plan rather than a Medicare Supplement (Medigap) plan. Ideally, all beneficiaries should be educated on all of their options and provided with the benefits that best fit their needs.

If you feel pressured into buying a Medicare Advantage plan, this could mean you’re not working with a licensed or ethical professional. Here at MedicareFAQ, we take great pride in educating our clients and then pinpointing the best option for their needs and budget.

Claiming a Medigap Policy is Part of the Medicare Program

Medicare Supplement plans aren’t part of the Medicare program of the government, including Medigap. Original Medicare is provided by a federal government program, while Medigap is only available through private insurance companies.

Misusing Names, Letters, or Symbols of Federal Programs

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

Be aware if 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 excellent resources. For those who don’t have a computer, you can write everything down and review them with your agent.

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

Medicare Supplement (Medigap) Plans are identified by letters that each correspond to the set of benefits that the plan includes across all states and carriers. But remember, an agent cannot legally enroll you in a plan in a state where 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.

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If you experience any of these illegal Medigap practices mentioned above, contacting the Inspector General is the best way to report such incidents.

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, and the agency suggests understanding its requirements beforehand. This will educate you on the types of claims they accept.

You can also reach the OIG hotline at 1-800-HHS-TIPS (1-800-447-8477) or 1-800-377-4950 for TTY users.

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

Can You Have Two Medicare Supplement Plans?
No, you can not have two Medicare Supplement plans simultaneously, as it is not legal for more than one Medigap policy 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.
When Is It Illegal To Sell a Medigap Policy?
There are several instances in which it’s illegal for someone to sell you a Medigap policy. Common examples include when the person selling the policy is not licensed, if the Medigap plan isn’t available in your state, or when using misleading tactics or misinformation.

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.

Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare educator serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

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