Medigap plans are supplemental policies that help cover the cost of co-payments, deductibles, and other out-of-pocket expenses related to health care that are not covered by Original Medicare. They often offer some additional coverage and additional benefits as well, and they are sold by private insurance companies. Supplement plans are named alphabetically, from Plan A to Plan N, each offering a different range of coverage.
However, not all supplement 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, without the process of medical underwriting.
Other Medigap policies only offer a guaranteed issue rule 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.
Insurance companies will demand your medical history and data on possible pre-existing conditions and diagnoses to make decisions about whether or not they will cover you and how much they will charge you for provided coverage. This process is called medical underwriting. There are two exceptions that except you from going through medical underwriting when want to enroll in the Medicare Supplement plan. The first situation is during your Open Enrollment Period. The second situation is if you have guaranteed-issue rights.
The guaranteed issue right essentially means that if you have health problems or are over 65 years old, you can still get Medicare Supplement 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, or 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 that is being completely discontinued, discontinued in your area, or you are moving from the plan’s coverage area.
- You have Original Medicare and another group policy and that plan are about to end.
- 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 Supplement 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, seven states have even more advantages.
Maine
If you have less than 90 days of coverage gap since you first enrolled in a Medigap supplement, you have the right to switch your current policy to a policy with equal or lesser benefits. It is not allowed to change it for a better plan without going through medical underwriting.
Connecticut, New York, Washington
Medigap is a guaranteed issue for the entire year and you may switch health plans at any time. Insurance companies have an Open Enrollment period during the whole year, without the need for medical underwriting.
Oregon and California
Supplement 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 Medicare Supplement plan has the same or less value than the current plan, no medical underwriting is required.
Missouri
Missouri allows Medigap beneficiaries to change to another equivalent plan during the month before or after annual anniversary date of the policy they hold without the need for medical underwriting.