When someone enrolls in a Medigap plan within 6 months of starting Medicare Part B, their insurer cannot deny or change their coverage based on their preexisting conditions.
Medigap policies, or Medicare supplemental insurance plans, are additional insurance plans provided by private health insurance companies that can help cover a person’s remaining out-of-pocket costs after coverage from Original Medicare (Part A and Part B) kicks in.
Insurers that provide Medigap plans use medical underwriting to determine whether they will offer coverage and at what cost, based on a person’s health status. However, during the 6-month Medigap open enrollment period, these insurers must allow a person to purchase any available plan, regardless of any preexisting health conditions.
This article discusses how medical underwriting works for Medigap and what a person must know when enrolling.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
In general, medical underwriting is a process by which health insurance companies evaluate a person’s health information and other factors, such as their age, occupation, and geographic location, to determine whether they are eligible for coverage from a plan such as Medigap. Insurance companies also use this information to determine the person’s premium rate.
Insurers generally follow medical underwriting to ensure that people do not wait until they have a severe health condition before purchasing a policy, as this can increase the insurer’s costs and the overall premiums for everyone else insured by the plan.
The medical underwriting process varies from insurer to insurer. It may involve a simple questionnaire that asks about the person’s medical history and details such as their weight, their height, and the medications they take.
Some insurers might also ask about previous hospital stays, use of skilled nursing facilities, and upcoming medical procedures. They might require the person to undergo a medical checkup and laboratory testing, such as a blood or urine analysis.
A person may want to consult their state’s insurance department to find out whether their state has additional regulations for purchasing a Medigap plan outside the open enrollment period.
Medigap insurers do consider preexisting conditions during medical underwriting. However, federal law guarantees some protections for Original Medicare beneficiaries who purchase a Medigap policy within 6 months of signing up for Medicare Part B. This is called the open enrollment period.
In most cases, this open enrollment period is the only time a person can purchase a Medigap policy without the possibility of coverage denial due to preexisting conditions.
However, guaranteed issue rights might also apply. These are additional situations in which a person cannot be denied a Medigap policy. These are standard throughout the United States, although some states require additional guaranteed rights protections beyond the federal requirement.
During the 6-month Medigap open enrollment period, a person can change their Medigap plan without medical underwriting.
If a person has had their current Medigap policy for less than 6 months and they want to switch to a different plan, they might need to wait another 6 months before the new policy will cover any preexisting conditions.
However, if they have had their current policy for more than 6 months and it offers the same benefits as their new plan, their new insurer cannot exclude or delay coverage for preexisting conditions.
In addition, a person can change their enrollment decision within the first 30 days after enrolling. For this reason, it can be wise to retain the original policy until the person is sure about transitioning to the new plan. This is known as the free look period.
How long does Medigap approval take?
Typically, Medigap policies become effective on the first day of the month after a person applies. However, if 30 days have elapsed and the person has not received their Medigap card or policy documents, they should contact their insurance provider. If 60 days pass without receiving the Medigap policy, they should contact their state insurance department.
Medigap policies, also known as Medicare supplemental insurance plans, are extra insurance options offered by private health insurers that help cover out-of-pocket expenses related to Original Medicare.
When offering Medigap plans, insurers use medical underwriting to assess whether they will provide coverage and to determine the pricing based on a person’s health status. However, during the 6-month Medigap open enrollment period, insurers must allow people to buy any available plan, regardless of any preexisting conditions.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.