Medicare Supplement (Medigap) insurance fills the coverage gaps that "straight" Medicare does not pay. There are two times when Medigap insurers cannot turn down anyone who wants to buy a policy. These windows of opportunity are called open enrollment and guaranteed issue periods
Medigap One-Time Open Enrollment Period
Open enrollment is a one-time opportunity, and it lasts only six months. It begins on the first day of the month an individual reaches the age of 65 and becomes enrolled in Medicare Part B, which also can be at 65 or later, perhaps much later. Once the six-month open enrollment period begins, it can't be changed and closes forever.
Most everyone turning 65 enrolls in Medicare Part A (Hospital) because it's usually free*. Not so with Medicare Part B (Medical) which carries a $110.50 per month premium. Some people stay with an employer, union or retiree plan (or their spouse's) into old age because it's a better deal. They enroll in Part B only when they have to, and when they do, they trigger the open enrollment 6-month window.
During open enrollment, Medigap insurance carriers must sell any of the plans A, B, C, D, E, F, G, K, L M, or N they offer without regard to an enrollee's health, and they can't charge more because of a health issue. Insurers can exclude a preexisting condition, but for no more than 6 months.
If you haven't been diagnosed or treated for six months before your policy kicks in, you don't have a preexisting. If you do have a bona fide preexisting–and you or your spouse can provide a certificate of creditable coverage showing continuous insurance under a group employer or union policy for at least half a year with no recent coverage breaks longer than 63 days–preexisting conditions will be covered.
What if you have a genuine preexisting condition during open enrollment and can't transition from a group policy? Consider a Medicare Advantage plan, Part C, which like original Medicare must take anyone and can't discriminate (except for terminal kidney disease). If you like the plan, you can stay on it. If not, you can resign it and buy a guaranteed issue Medigap policy that will cover the preexisting, which is discussed next.
Medigap Guaranteed Issue Periods
A guaranteed-issue period lasts just over 2 months, so time is of the essence. Insurers generally* must offer Medigap policies A, B, C, F, K or L at the best price for your age, without a waiting period or health screening, and they must cover preexisting conditions. Here are the events that trigger a 63-day guaranteed issue period:
- You have original Medicare and an employer- or union-sponsored retiree plan that supplements (i.e., pays after) Medicare. The plan terminates you, or stops supplementing Medicare.
- A spouse or family member dies, or you divorce, and you thus lose eligibility under that person's retiree plan.
- You have a Medicare Advantage, SELECT or Program for All-Inclusive Care for the Elderly (PACE) plan. You move out of the plan's service area.
- Your Medicare Advantage plan ceases operations, or stops giving care in your area.
- You Medicare Advantage, SELECT or PACE plan commits fraud, misrepresents the plan you bought, or fails to meet its contractual obligations to Medicare beneficiaries.
- You joined a Medicare Advantage or PACE program when you were first eligible for Medicare Part A (age 65) and within the first year of joining you want to resign the plan and switch to Original Medicare.
- You dropped a Medigap policy to join a Medicare Advantage or SELECT plan for the first time, you have been in that plan less than a year, and you want to switch back.
- Your Medigap insurer goes bankrupt, or ends your plan through no fault of yours.
You can usually apply for a guaranteed-issued Medigap policy as early as 60 days before your current benefits end to avoid a lapse in coverage. Medigap insurers may require a certificate of creditable coverage from a previous carrier proving there isn't a coverage gap of more than 63 days, so don't lose vital paperwork from the old carrier.
Prescription Drug Plans
Many Medicare-eligible individuals favor Medigaps because they are often cheaper than Medicare Advantage plans. Medigaps don't include drug plans (Part D), but inexpensive medications from U.S. and Canadian online and 1-800 pharmacies are available.
* Medicare Part A premium is zero for patients and their spouses who have worked for ten years or longer.
** Federal law allows insurance companies to refuse to sell Medigap policies to those under 65, so coverage options vary by state.
George Daleiden - I was a science major in college and later a career member of the Institute of Food Technologists. I worked in the processed food and ...
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