Are your clients unhappy with their Medigap selection? Depending on where they live, they may be able to switch Medicare Supplement Plans without going through medical underwriting. Although the federal rules are strict, states often give enrollees additional rights, and three states have recently changed their rules.
The Medigap Open Enrollment Period
According to Medicare, the best time to buy a Medigap policy is during the Medigap Open Enrollment Period. This is a six-month period that starts when a person is 65 or older and first enrolls in Medicare Part B. During this time, seniors can enroll in any Medigap plan without having to undergo medical underwriting.
Unlike the Annual Election Period for Medicare Advantage and Medicare Part D prescription drug coverage, the Medigap Open Enrollment Period is a one-time event. There are some special Guaranteed Issue Rights, also called Medigap Protections, for people who are moving out of state or losing their health coverage. However, under federal law, seniors don’t typically have the right to switch Medigap policies outside of their Medigap Open Enrollment Period.
Seniors can still apply for a Medigap plan outside of their open enrollment period, but the application is subject to medical underwriting, and insurance companies can deny coverage or charge higher rates based on the applicant’s pre-existing conditions. For many seniors with chronic health conditions, this puts Medigap policies out of reach. Premiums may also increase based on the applicant’s age.
Getting Stuck in the Wrong Medigap Plan
Medigap plans can help people in Original Medicare keep their out-of-pocket costs under control. However, Medigap plans are not all the same. Options are standardized, but seniors still have multiple plans and insurance carriers to choose from.
When seniors turn 65 and first enroll in Medicare Part B, they need to decide whether they want Medigap coverage, and if so, which plan they want. But what happens if their needs change? They might realize that a plan is too expensive for their fixed budget and want to switch to a less expensive option without losing coverage entirely, or they might decide that they’re unhappy with their carrier and would like to switch to a different insurance company. Unfortunately, under federal rules, they might be stuck with the plan they picked at age 65.
State Rules and Second Chances
Although federal rules don’t guarantee seniors the right to switch Medigap plans if their needs change, some states provide more flexibility.
According to KFF, the majority of states have at least some protections that go beyond the federal requirements. In 28 states, for example, people have the right to purchase Medigap if their employer changes their retiree health benefits.
Additionally, KFF says that Connecticut, Maine, Massachusetts and New York offer seniors guaranteed issue protections on either a continuous or annual basis. This means that seniors can reconsider their Medigap selection at least once a year without worrying about being denied coverage or having to pay more because of health issues.
Now, three more states are providing this opportunity. According to ThinkAdvisor, Idaho, Illinois and Nevada are adding new rules that let seniors change their Medigap selection each year without the need for medical underwriting.
- In Idaho, a 63-day enrollment period now begins on the senior’s birthday. During this period, the senior may change their plan or insurance company regardless of health conditions, and premiums will not be based on the applicant’s age.
- In Illinois, seniors between the ages of 65 and 75 now get an annual open enrollment period that starts on the person’s birthday. During this time, seniors can purchase any Medigap policy that offers benefits that are equal to or less than their previous coverage.
- In Nevada, Medigap policyholders now have an open enrollment period that starts on their birthday and lasts for 60 days. During this time, seniors can purchase a new plan with the same or lesser benefits without underwriting.
Helping Seniors Navigate Medigap Rules
The new laws will help many seniors get the coverage they need. However, there are still many restrictions. As an agent, you can help your clients understand these complicated rules.
- Educate your clients on their state’s Medigap enrollment rules.
- In states with new rules (Idaho, Illinois and Nevada), make sure seniors are aware of the change.
- In states that provide annual Medigap enrollment periods, birthday marketing is a great opportunity to check in with seniors to see if they’re happy with their coverage.
- Even in states with more flexibility regarding Medigap enrollment, there may be restrictions. For example, annual open enrollment period may only be available to people already enrolled in a Medigap plan, and seniors may not be able to pick a plan with more robust coverage. Help your clients understand these restrictions. The Medigap choices they make when they first age into Medicare may impact their health coverage for decades.
Your clients count on you when they need help navigating Medigap birthday rules or other issues. When you need support, we’re here for you. Contact us.