| What Does Medicare Supplement Guaranteed Issue Mean?

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MEDICARE SUPPLEMENT GUARANTEED ISSUE: WHAT YOU NEED TO KNOW

The following are some of the ways in which Medicare supplement guaranteed issue rights might impact your healthcare coverage.

Can you benefit from Medicare supplement guaranteed issue rights?

You might already know that Medigap policies have an initial enrollment period (IEP) during which you can apply for any supplemental policy you wish. Outside your IEP, you might be able to apply for Medicare supplemental insurance if you have Medicare supplement guaranteed issue rights.

Medicare provides protections for beneficiaries who meet specific criteria, which are called guaranteed issue rights. These rights allow you to apply for Medigap policies without being subject to underwriting.

The following are some of the ways in which Medicare supplement guaranteed issue rights might impact your healthcare coverage.

WHAT IS UNDERWRITING?

What Medigap policies are right for you?

Underwriting is a way for insurance companies and other companies in the finance industry to mitigate their risks when they take on a new client. They want to pay as little as possible in claims.

In the insurance industry, insurers take certain risks when extending coverage to beneficiaries because of potential claims. An insurance company uses underwriting to assess a beneficiary’s inherent risk to determine whether or not to provide coverage and, if the applicant is approved, what premium to charge.

Underwriting is the process by which insurance companies make these decisions. When an insurance company decides to underwrite a policy, it accepts the risks involved with future payouts on the beneficiary’s behalf.

When you insure a car, for instance, the insurance company takes several factors into consideration during the underwriting process. When a driver has a history of accidents, moving violations, and other problems behind the wheel, the insurance company will charge a higher premium.

The same goes for healthcare insurance, such as Medigap policies unless underwriting isn’t allowed by law. Medicare supplement guaranteed issue means that the insurance company can’t use underwriting when evaluating an application.

WHAT ARE MEDICARE SUPPLEMENT GUARANTEED ISSUE RIGHTS?

Medicare law provides certain Medicare supplement guaranteed issue rights in very specific circumstances. Guaranteed issue means the insurance company can’t deny coverage or increase your premium based on factors like pre-existing conditions or past healthcare problems.

Medicare supplement guaranteed issue rights fall into two general categories: health coverage changes and trial rights.

WHAT HEALTH COVERAGE CHANGES APPLY TO MEDICARE SUPPLEMENTAL INSURANCE?

The first of the Medicare supplement guaranteed issue rights involves Medicare Advantage (MA) plans, which are also known collectively as Original Medicare Part C. An MA plan is distinct from Medigap policies.

If your MA plan stops providing coverage in your area or if you move into an area where you don’t have access to the same plan, you have guaranteed issue rights. You can then apply for Medigap policies if you decide you’d rather switch to Original Medicare and Medigap. The same is true for Medicare SELECT policies.

You also enjoy Medicare supplement guaranteed issue rights if you’ve been using Original Medicare in addition to an employer group plan. When you’re no longer covered by the group plan, you can apply for Medigap policies without any underwriting.

As a beneficiary, you can exercise Medicare supplement guaranteed issue rights if a Medigap insurance provider stops offering your plan, goes out of business, or stops operating in your geographical area. Additionally, you’re protected from underwriting if your insurer has failed to follow Medicare rules.

WHAT TRIAL RIGHTS APPLY TO MEDIGAP POLICIES?

Trial rights are special Medicare supplement guaranteed issue rights that allow you to test an MA plan for fewer than 12 months after switching from a Medigap policy. If you decide you would like to revert to Original Medicare and apply for a new Medigap policy instead of keeping MA, you have that right. If your insurance company still offers the first Medigap policy you had, you must return to it.

Similarly, if you selected an MA plan or a Programs for All-Inclusive Care of the Elderly plan at age 65, immediately upon eligibility for Original Medicare, you can drop that plan within the first 12 months and apply for Medigap policies instead.

In both cases, you can apply for Medigap up to 60 days before coverage ends and up to 63 days afterward.

These trial rights allow you to try alternatives to Medigap policies without any repercussions. Pay careful attention to the dates, though, so you don’t miss your eligibility period.

WHY WOULD YOU WANT MEDICARE SUPPLEMENTAL INSURANCE?

Medigap policies offer significant advantages over Original Medicare. They fill in some of the gaps in coverage that result in greater out-of-pocket expenses.

Medigap coverage pays for certain deductibles, copayments, and coinsurance depending on the plan you buy. You have 10 options as of 2018: Plans A, B, C, D, F, G, K, M, and N.

In 2020, Medigap Plans F and C will disappear. If you already have one of those plans before 2020, you can keep it, but new beneficiaries won’t be able to apply for the plans.

The most comprehensive option, whether you’re applying during your IEP or because you have Medicare supplement guaranteed issue rights, is Medigap Plan F. However, it comes with a high premium. We recommend considering Medigap Plan G instead. It offers the exact same coverage except for Original Medicare Part B excess charges.

WHAT PROTECTIONS ARE PROVIDED WITH GUARANTEED ISSUE RIGHTS?

When you have Medicare supplement guaranteed issue rights, insurance companies must offer you any policy it provides in your geographical location. The company can’t take into account pre-existing conditions when determining your premium, and it can’t deny coverage.

In some cases, there might be a waiting period before an insurance company will cover pre-existing conditions. The waiting period cannot last longer than 6 months, after which full coverage kicks in.

If you’re protected, the insurance company can only take into account your location and tobacco use. Otherwise, it has to offer you the best rate available from that insurance company in your geographic area.

CONCLUSION

Medicare supplement guaranteed issue rights can seem confusing, but you should know your rights so you don’t lose the opportunity to take advantage of Medigap policies. Even if you didn’t sign up for Medicare supplement plan during your IEP, you might qualify for Medigap based on health coverage or trial protections.

If you’re thinking about applying for a Medigap plan, don’t assume your first quote will be the best. Individual insurance companies set their own premiums for each Medigap plan, so comparing your options offers the best opportunity to find a plan within your budget.

Use Ensurem’s handy Medigap Quoter to get quotes from multiple insurance companies based on your zip code. If you’re nearing age 65 or if you qualified for Medicare supplement guaranteed issue rights, now’s the time to investigate your options.
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