Medigap, medical underwriting, and guaranteed rights

Have you ever wondered how health insurance companies determine if and when they will provide coverage to you or a to a family member? The process that most companies use is called medical underwriting. Think of it as a sort of medical background check that you must go through before you receive coverage. In much the same way that car insurance companies raise your rates if you have a lot of accidents, medical insurance companies may raise your monthly premiums or decline to cover you altogether if you have significant health issues either currently or historically.

When it comes to Medigap, though, there are exceptions to these health audits. This is great news for those of us with spotty medical histories. Medigap, which is an informal name for Medicare supplemental insurance, features a guaranteed issue right during its open enrollment period. This right entitles you to buy any Medigap plan for sale in your local coverage area. As long as you apply during the open enrollment period, the health insurance companies who provide the Medigap plans cannot legally deny you coverage or charge you higher premium rates because of a disability or pre-existing health condition. Health companies also cannot subject you to the aforementioned medical underwriting process.

Open Enrollment

The open enrollment period is critical. If you fail to apply during the period, you will not be able to apply again without being subject to possible underwriting and subsequent denial of insurance requests. If a company does decide to sell you an insurance policy despite your medical history, it can and most likely will charge you significantly higher costs if you do not meet the underwriting requirements.

The Medigap open enrollment window is six months long. This should give you plenty of time to research appropriate Medigap plans in your local area. You can contact local insurance companies directly or view their websites. The enrollment period begins on the first day of the month that you turn 65. To take advantage of Medigap, you must also be enrolled in Medicare Part B. If you elect to postpone your Medicare Part B coverage, your six month Medigap open enrollment window will also be postponed until you are obtain Part B coverage.

There are a few cases where you may enroll in a Medigap plan outside of the six month window and still receive your right to guaranteed issue. These exceptions are listed below.

  • If you have Original Medicare coverage and an employer health plan, but the employer health coverage is terminating.
  • If your Medicare Advantage (sometimes called Part C) plan is leaving Medicare, and you return to the Original Medicare coverage plan.
  • If you leave your Medicare Advantage or Medigap plan because the insurance company broke the law or misled you in some way.
  • If you have a Medicare Advantage plan and move out of the coverage area, you will be removed from the plan. You will subsequently be eligible for a Special Election Period during which you may enroll in a new Advantage plan. You must enroll in the new plan with an effective date of the month after you move or the beginning of the seventh month, otherwise you will default to Original Medicare. If you go back to Original Medicare, you may receive the guaranteed issue right.
  • If you enroll in Medicare Advantage and decide to return to Original Medicare within a year, you have the right to buy any Medigap plan in your coverage area.
  • If your Medigap provider goes bankrupt or you lose your coverage and are not at fault.

 

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