Better Coverage for Seniors
Medigap plans are supplemental policies that help cover the cost of co-payments, deductibles, and other out-of-pocket expenses not covered by Original Medicare.
However, not all Medigap policies are created equal. Some Medigap plans have a guaranteed issue rule that requires Medigap companies to offer a Medigap plan to anyone who applies.
Other Medigap policies only offer guaranteed issue if you qualify for Medicare based on your state’s income requirements or disability status.
This article will discuss the benefit of having Medigap guaranteed issue rights, who qualifies for them, and what states enjoy this benefit.
What are guaranteed issue rights?
Guaranteed issue rights are also called “Medigap Protections.”
Guaranteed issue rights are privileges you have in certain cases when the law requires insurance companies to sell or give you a Medigap policy.
These rights prevent an insurance company from refusing to issue you a Medigap policy, placing restrictions on a Medigap policy (like for pre-existing conditions), or charging you more for a Medigap policy because of your health status.
This means if you have health problems or are over 65 years old, you can still get Medigap coverage regardless of your medical history.
Why are guaranteed issue rights important?
In many states, switching plans is next to impossible. If you begin your coverage with a Medicare Advantage plan, but want to increase your coverage by enrolling in a Medigap plan, it is unlikely that you will qualify for coverage.
As we age, our health declines. Any new medications, changes in health, diagnoses, are taken into consideration by carriers when reviewing your application for coverage. If you want increased coverage because your health is declining and you require more care, it’s likely that a carrier will deny coverage.
This is also why it is important to try to think about your future when enrolling in Medicare from the very beginning.
In what situations do the Medigap guaranteed issue rights apply?
First, it’s important to understand that when you first become eligible for Medicare, you can not be turned down for any policy you apply for. Companies may not refuse to issue a policy for any reason whatsoever.
After your Initial Enrollment Period, that is not the case. That’s when the Medigap guaranteed issue rights are beneficial.
There are seven instances when you have guaranteed issue rights for a Medigap policy.
- You currently have a Medicare Advantage (Part C) plan this is being completely discontinued, discontinued in your area, OR you are moving from the plan’s coverage area.
- You have Orignal Medicare and another group policy (like one through your employer or your spouse’s employer) and that plan is ending.
- You have Orignal Medicare and also a Medicare Select policy, but you are moving out of the Medicare Select plan area.
- You invoke the “Trial Right” after enrolling in a Part C plan or Program of All-Inclusive Care for the Elderly (PACE) when you were first eligible for Medicare. This trial right does not extend past one year.
- You invoke the “Trial Right” after switching to a Medicare Advantage plan from a Medigap policy but have been in the plan for less than one year.
- Your Medigap policy ends due to no fault of your own.
- You end coverage with a Medigap or Medicare Advantage plan because you have been misled by the carrier or they have broken rules.
Which states have unique Medigap guaranteed issue rights?
While Medicare beneficiaries of all states enjoy some guaranteed issue rights, a few states have even more advantages.
If you have less than 90 days of a coverage gap since you first enrolled in a Medigap supplement, you have the right to switch your plan.
Connecticut, New York, Washington
Medigap is a guaranteed issue for the entire year and you may switch plans at any time.
Oregon and California
Medigap policies in Oregon and California have a birthday rule. This rule allows its residents to enroll in a Medigap policy 30 days prior to or 60 days after their birthday.
As long as the Medigap plan has the same or less value than the current plan, no medical underwriting is required.
Missouri residents have the Anniversary Guaranteed Issue Period. This gives any Medicare beneficiary with a supplement plan the opportunity to switch carriers for 60 days around the anniversary of the plan’s start date.
This does not apply to a change in plan, but a change in carriers only. The new carrier must issue you a plan with no medical underwriting. This allows the member to compare premiums and shop for new coverage each year.
As you can see, it’s not easy to change Medicare plans. At 65, you may not think you’ll require much medical coverage, but of course, our health can change rapidly. If only we had a crystal ball!
It’s important to know your guaranteed issue rights where you live so that you can also take these into consideration when choosing a Medicare Advantage or Medigap policy.
Make sure to read our explanation of the different Medigap plans and which ones typically qualify for the Guaranteed Issue right here.