KEY
POINTS
-
Original Medicare beneficiaries are often eligible to enroll in Medicare Supplement plans which are sold by private companies for the purpose of filling the gaps in Original Medicare coverage.
-
If a beneficiary of Original Medicare meets certain criteria during their Initial Enrollment Period, they are eligible to enroll in a Medicare Supplement plan while benefiting from guaranteed issue rights.
-
Guaranteed issue rights prevent insurers from medical underwriting which could lead to a refusal of service or increased premiums and deductibles.
Beneficiaries of Original Medicare, or people approaching the enrollment period, may decide they also need a Medicare Supplement plan also known as a Medigap plan. There are some eligibility requirements and enrollment dates that potential Medigap recipients should be aware of.
What are Medigap Eligibility Criteria for Those 65 or Older?
For three months prior to your 65th birthday, and for three months after it, you are eligible to enroll in Original Medicare. During this time, you are also eligible to enroll in a Medigap plan. There are some specific Medigap eligibility criteria if you enroll during this time. Beneficiaries must:
- be enrolled in Original Medicare Parts A and B to enroll in a Medigap plan.
- be a citizen of the U.S or have been legal resident for at least five years prior to enrollment.
- be a resident of the state that is offering the plan at the time of application.
If someone meets these criteria during their Original Medicare Initial Enrollment Period, they are eligible to enroll in a Medigap plan. Guaranteed issue rights dictate that they may automatically be allowed to purchase the policy without regard to whether they have a pre-existing condition. The company may not be allowed to review a beneficiary’s medical records, so they will not be charged an extra premium even if they have a pre-existing condition.
Guaranteed issue rights may not apply for those who do not enroll in a Medigap plan during their initial enrollment period. When guaranteed issue rights do not apply, acceptance is not guaranteed. The late enroller will be subject to medical underwriting and can be denied based on their medical history.
Medical underwriting: Those who do not enroll in a Medigap plan during their Initial Enrollment Period will likely undergo medical underwriting. Underwriting is the process insurers use to determine the risks of insuring an individual or other entity, usually by figuring out the health status of the person applying for coverage. Providers can factor in the pre-existing conditions and health history of a beneficiary to determine prices, exclusions, and limitations. After underwriting the potential beneficiary, the insurance company has several options:
- They may refuse to sell a Medigap policy.
- They may sell a policy but charge more than they would have if the beneficiary had enrolled during their Initial Enrollment Period.
- They may sell a policy, even at an increased premium, but refuse to cover any expenses related to a pre-existing condition for up to six months after purchase of the policy.
There are exceptions to the six months waiting period for those who postponed enrolling in Original Medicare Part B because they had other creditable insurance, like coverage under an employer’s benefit plan. When the old coverage ends, and the insured enrolls in Part B, they have six months to purchase a guaranteed issue Medigap plan. They are treated the same as if they had enrolled during the Initial Open Enrollment Period.
What are the Medicare Supplement Eligibility Requirements for those Under 65?
There are people under the age of 65 who are eligible for Original Medicare due to their health issues. They are almost all on Social Security Disability due to a disabling medical condition. Because of this, they pose a higher risk for claims and often need intensive medical care.
One example is if you have a diagnosis of end-stage renal disease (ESRD) and are under 65, you are eligible to receive Original Medicare. According to Medicare supplement eligibility requirements, you cannot purchase a Medicare Supplement until you turn 65.
Federal regulations do not require any insurance company to offer Medicare Supplement plans to those with an ESRD diagnosis. Some states do require companies to offer at least one policy, so you need to check carefully with your state to see if a Medigap plan is available to you. Expect it to be expensive, but when compared to the coinsurance and deductible for Original Medicare, you may decide it is worth the extra cost.
Guaranteed issue rights apply to Medigap policies for six months after a person turns 65. As a beneficiary, it’s important to use this period to the greatest possible advantage. To capitalize on this advantage, remember to check within the specific state of residence to see when one should purchase a Medigap plan.
Sources:
