Medicare Supplement and Medical Underwriting

Medicare Supplement and Medical Underwriting

Typically, if you are applying for a Medicare Supplement policy, the insurance company is allowed to use medical underwriting to decide whether to accept you. Medical Underwriting is the process that an insurance company uses to decide, based on your medical history, whether or not to take your application for insurance, whether or not to add a waiting period for pre-existing conditions (if your state law allows it), and how much to charge you for that insurance.  But under certain circumstances, medical underwriting cannot be applied. The article below reviews how to get a Medicare Supplement without Medical Underwriting and limited Medical Underwriting from AARP.

Medicare Supplement and Medical Underwriting – Open Enrollment Period

The best time to enroll in a Medicare Supplement plan is during the Medicare Supplement Open Enrollment Period – a six month period after you’ve enrolled in Medicare Part B. During this period an insurance company cannot use medical underwriting:

  • They cannot refuse to sell you a Medicare Supplement policy
  • They cannot charge you more due to existing health problems
  • They cannot make you wait for coverage to start, as long as you have at least six months of prior creditable coverage when you first enroll in a Medicare Supplement and have had this prior coverage within the last 63 days

In Medicare Supplement Open Enrollment Period you have the right to buy ANY Medicare Supplement policy offered in your state.

Medicare Supplement and Medical Underwriting – Guaranteed Issue Rights

Under certain circumstances, you are entitled to Guaranteed Issue Rights. In other words, you are guaranteed to qualify to buy a Medicare Supplement policy without medical underwriting, i.e. without having to answer any health questions.

In order to be entitled to Guaranteed Issuance, there must be a trigger event, such as:

  • Loss of health insurance (such as group coverage) through no fault of your own
  • Moving out of a Medicare Supplement SELECT plan area
  • Supplemental carrier discontinues offering coverage
  • Your Medicare Advantage plan leaves Medicare, or you move out of a Service Area
  • You enrolled in a Medicare Advantage plan when you were first eligible for Medicare (the first 12 months of enrollment), and now you want to switch back to Original Medicare
  • You dropped Medicare Supplement plan for a Medical Advantage plan (the first 12 months of enrollment), and now you want to switch back

Notice that moving from one state to another is not considered to be a trigger event. Depending whether the insurance company is represented in your new state, you can either continue to pay premiums within the state where the policy was issued, or the policy will be issued by the same company in the new state.

You have a limited time to purchase the Medigap policy, known as Guaranteed Issue Period.  It is normally 63 days from the triggering event. You are allowed to purchase ONLY the following Medicare Supplement plans: Medigap Plans A, B, C, F, K and L.

Medicare Supplement and Medical Underwriting – State Guaranteed Periods

In addition to Guaranteed Issues described above, some states have Special Guaranteed Issue Periods. For example:

  • In Connecticut everyone has guaranteed issue at all times
  • In Missouri there is a 30-day guaranteed issue window on the anniversary of your current Medigap policy
  • In California there is a 30-day guaranteed issue window that begins on your birthday

Medicare Supplement and Medical Underwriting – Promotional Activity

Periodically, an insurance company may offer one of the Standardized Medicare Supplement plans as Guaranteed Issue without any need triggering one of the events described above. This is normally done in order to promote a particular Medigap plan.

Despite it may be quite beneficial for people with medical problems, it is not recommended for people without medical justification (i.e. for people who will pass medical underwriting) to join such plans.

These plans typically attract people in poor health who had previously been declined by other Medicare Supplement Plans. To maintain the health of those people is much more expensive, and the company typically first drops Guaranteed Issue, and later in order to cover their expenses dramatically increase premiums. Sometimes the result may be as dramatic as cancelling plans altogether. This was the case of Mutual of Omaha, Plan N.

Medicare Supplement and Medical Underwriting – AARP Underwriting

AARP like most of the other companies has the extensive list of health questions the applicant supposes to answer. In most companies you are eligible if all your health question answers are negative. In AARP:

  • If you enrolled in Part B less than three years, your eligibility is determined ONLY by answering the limited number of critical health questions.
  • If you enrolled in Part B three or more years, your eligibility is determined as above by answering the limited number of critical health questions. In addition, you are required to answer on many other questions. But positive answer to any of those questions does NOT disqualify you. You still may enroll, but you premium will be SUBSTANTIALLY HIGHER than for people with all negative answers.

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For help finding the best Medicare or Individual Health Plan for you, please contact Liberty Medicare or call us at 877-657-7477.

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