Ron Elledge is a seasoned Medicare consultant and author of “Medicare Made Easy.” As a Medicare expert, he regularly consults beneficiaries on Medicare rules, regulations, and strategies.
A Medicare Supplement Plan (also called a Medigap plan) can help pay Medicare Part A and Part B costs, such as deductibles, copayments, and coinsurance. If you’re eligible for a Medicare Supplement Plan, enrollment is a good idea, as these plans take much of the worry out of escalating medical costs by having no cap on the coverage they offer. To qualify, you must maintain Parts A and B and you must live in the plan’s service area at the time of enrollment.
Are You Eligible for a Medicare Supplement Insurance Plan?
Eligibility for Medicare Supplement Insurance has several requirements based on your time of enrollment:
- You must be enrolled in BOTH Parts A and B at the time of application.
- You must be age 65 or older (in several states, some Plans are offered to those under 65 who are on disability).
- You must reside in the state in which the Supplement Plan is offered at the time of application.
- You must undergo medical underwriting through a written questionnaire and medical record access, except during the Open Enrollment Period (OEP) and certain Special Election Periods (SEPs). Included in the SEP category is the SEP for relocation to the U.S. from a foreign country.
Supplement Plans require that you show a permanent address within the U.S. or its territories and require state residency at the time of purchase for determination of coverage, cost, and plan availability. They also require that the address be a physical address (not a P.O. box) unless you are homeless. Once you purchase a Medicare Supplement Plan, it is guaranteed renewable as long as the plan premiums are kept current. That means you can get a Supplement Plan and take it with you if you move.
When is the Best Time to Enroll in a Medigap Policy?
The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. OEP is the six-month period that begins on the first day of the month in which you’re 65, or older, and enrolled in Medicare Part B. If you delay Part B coverage, your Medigap OEP will be the six-month period beginning on the first day of the month you enroll in Part B.
- Example 1: If you turn 65 on May 1 and your Part B begins May 1, your Medigap OEP begins May 1 and runs through October 31.
- Example 2: If you turn 65 on May 1, 2022, but wait until your Employer Group Coverage terminates in August of 2022 and your Part B begins September 1, 2022, your Medigap OEP begins September 1, 2022, and ends February 28, 2023.
Medicare Supplement Plans are not restricted to certain enrollment periods, so applications can be submitted any time during the year. However, guaranteed issue rights are available during certain periods and for limited situations.
Can You Be Turned Down for a Medigap Plan?
Under certain circumstances, you can be denied coverage for Medicare Supplement Plans. Denial of coverage may be based on Medicare enrollment, age, or pre-existing health issues. However, you may have guaranteed issue rights.
In most states, if you are under 65, you are not eligible for Medigap policies even if you are on Medicare because of disability or other health reasons.
You may be denied coverage if you are not enrolled in both Part A and Part B of Medicare at the time of application. Coverage may also be denied if you are on a Medicare Advantage Plan or a Medicare Medical Savings Account (MSA) Plan unless you are scheduled to disenroll from these plans. You may be denied coverage if you are not within your Supplement Open Enrollment, or other Special Enrollment Period granting guaranteed rights, and have pre-existing health conditions.
Medicare defines a pre-existing condition as a health problem you have before the date a new insurance policy starts. In some cases, the Medigap insurance company can refuse to issue the policy based on pre-existing conditions.
Or, if issued, your out-of-pocket costs incurred for the pre-existing condition may not be covered for up to six months. This is called a pre-existing condition waiting period. During this period, coverage for a pre-existing condition can only be excluded if it was diagnosed or treated within the look-back period six months before the policy was issued. This look-back period can be shortened under certain circumstances.
Do You Have Guaranteed Issue Rights?
If you buy a Medicare Supplement policy when you have a guaranteed issue right, the insurance company cannot refuse to sell you any supplement policy offered, charge you more for a Medigap policy than those with no health problems, or make you wait for coverage to start, except in certain circumstances.
You may have a guaranteed issue right if:
- Through no fault of your own, you lost a group health plan that covered your Medicare cost-sharing
- You joined a Medicare Advantage Plan when you first became eligible for Medicare and disenrolled within 12 months, or your previous Medigap policy, Medicare Advantage Plan, or PACE program ends its coverage or committed fraud
If you have a Medicare Advantage Plan, Medicare SELECT policy, or PACE program and you move out of the plan’s service area, you also have the right to buy a Medigap policy.
Under certain circumstances, there is a waiting period of up to six-months for pre-existing conditions for Medigap policies purchased during the OEP. The waiting period applies if you have not had creditable medical coverage prior to enrolling in Medicare Part B. If you have not maintained creditable coverage your pre-existing conditions will not be covered for one month for every month you have not had creditable coverage before enrollment up to a maximum of six months.
If you have disqualifying medical conditions and you are not within your six-month OEP after enrolling in Part B, and you have no other guaranteed issue right or special enrollment period, you may be turned down for Medigap coverage. Disqualifying medical conditions are defined by each insurance company offering Medicare Supplement Policies and are listed on their policy application.