How to handle your Medicare coverage if you move to another state

For Medicare beneficiaries who are eyeing a move to another state, be sure to consider what your coverage would look like once you get there.

Whether you already were planning to relocate or the coronavirus pandemic has sparked the idea, it’s important to know the various Medicare rules that apply to such moves, how costs may be different in your new state and how long you get to make changes. 

In many cases, the process of making the switch is fairly straightforward, experts say. In others, it may require some legwork and comparison shopping to see what makes the most sense coverage-wise and financially for you.

Roughly 62.4 million people are enrolled in Medicare, the majority of whom are age 65 or older. Original (or basic) Medicare consists of Part A (hospital coverage) and Part B (outpatient care and medical equipment).

About a third of beneficiaries choose to get those benefits through a Medicare Advantage Plan (Part C).

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In that case, prescription drug coverage (Part D) is typically delivered through those plans, as well. They may come with their own premium on top of what you pay for Part B and, if applicable, Part A, as well as their own cost structure for deductibles, copays or coinsurance. They also have out-of-pocket maximums (which basic Medicare does not) and may offer extras like basic dental and vision coverage.

The remaining two-thirds of enrollees stick with original Medicare. Of those, many pair it with a standalone Part D prescription drug plan, as well as a supplemental plan — aka “Medigap.” Those policies cover some of your costs associated with Medicare, including copays or coinsurance associated with Parts A and B. They, too, limit what you’ll pay out of pocket each year.

While a number of companies offer Medigap insurance, they can only offer policies from a list of about 10 standardized plans. Each is simply assigned a letter: A, B, C, D, F, G, K, L, M and N. Some states also offer high-deductible versions of Plan F and G. (There also are Medicare Select plans, which are Medigap plans that are network-based and are available in some places.)

“Because the plans are standardized in most states, you may be able to remain with the same plan,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.

However, she said, the cost may be lower or higher than what you’ve been paying, depending on where you’re moving.

For instance, for a woman turning 65 this year, the cost for Plan G among the top 10 markets ranges from just under $92 per month in Chicago to $476 monthly in New York, according to the American Association for Medicare Supplement Insurance. For men, the range is about $104 in Chicago to $509 in Philadelphia.

“Call your carrier and tell them the new ZIP code, and they’ll let you know the cost,” said Danielle Roberts, co-founder of Boomer Benefits, a Medicare insurance agency. “Sometimes you’ll get pleasantly surprised that it’s lower.”

If it’s not, you could look for a cheaper policy. However, you may have to undergo medical underwriting. Medigap policies come with their own rules for enrolling, and some states have different enrollment standards than others. 

If you have a standalone Part D plan for prescription drug coverage, you’ll need to sign up for a new one in your new state of residence. 

“The Part D benefits may be different in another state,” Roberts said. “Even if the plan has the same name, you still have to switch because those plans are state-specific.”

You get two months to do that — otherwise you would need to wait until the next open enrollment (in the fall) and could be penalized for having no acceptable prescription drug coverage. Those penalties are 1% of the national base premium ($32.74 for 2020) for each full month that you didn’t have coverage.

The availability of Advantage Plans — and the specifics of each plan — vary from state to state. This means that as with standalone Part D prescription plans, you’ll still need to enroll in a new Advantage option even if it’s called the same thing.

“The specifics inside the plans will be different, including the network,” Roberts said.

You also get two months to make this switch.

If you’re considering a move to an area where the Advantage Plan options are limited — often in more rural areas — and one is not suitable, you can consider a Medigap plan. Again, however,  you may have to undergo medical underwriting, depending on the specifics of your situation.