The Best Time to Purchase Medigap Insurance
Medigap insurance open enrollment period
Medigap insurance policies came into being shortly after Lyndon B. Johnson signed legislation that created Medicare. Medigap policies are supplemental policies that fill the gaps of Medicare covered expenses. Medicare was never intended to be comprehensive. There are deductibles and co-insurance for which the Medicare beneficiary is responsible.
Medigap insurance often requires individual underwriting. A person’s health often determines the premium and in some cases, whether they qualify to purchase a policy at all. Fortunately there is a time when no underwriting is allowed. This is the Medigap insurance open enrollment period.
The open enrollment period starts on the first day of the month that you are 65 and enrolled in Medicare Part B. The open enrollment period lasts for six months. During the open enrollment period an insurance company cannot individually underwrite your policy. This is the best time to purchase Medigap insurance. During this period, an insurance company is not allowed to:
- Refuse to sell you any of the Medigap policies that it has available for purchase.
- Charge you more for a policy because of any health conditions.
- Make you wait for coverage (except in cases of pre-existing conditions).
A pre-existing health condition is a condition you had before you purchased a Medigap policy. It’s possible that an insurance company will not cover costs related to your pre-existing condition for six months and you will be responsible for any costs that Medicare does not cover.
The lack of coverage related to your pre-existing condition can often be avoided if you had creditable coverage for at least six months prior to submitting an application for a Medigap policy. The exception, is if you were without coverage for more than 63 days.
You are able to submit an application prior to your open enrollment period and in some cases this will allow you to avoid being without coverage for 63 days.
Medigap insurance guaranteed issue rights
In addition to your open enrollment period, there are times when you have guaranteed issue rights. Guaranteed issue rights generally come about due to losing creditable coverage from another insurance company. During the guaranteed issue rights period, an insurance company is required to:
- Sell you a Medigap policy once you submit the application.
- Include coverage for pre-existing conditions.
- Not charge more for any current or past health conditions.
During the guaranteed issue rights period, you can purchase certain standardized policies within specified periods of time. The following circumstances would activate your guaranteed issue rights:
- You have a Medicare Advantage plan and it is not going to renew for the next year.
- Your coverage from an employer or union, including COBRA insurance, that pays after Medicare, is ending.
- You are enrolled in a Medicare select policy (network based Medigap policy) and you move from the plan’s coverage area.
- You joined a Medicare Advantage Plan at age 65 when you became eligible for Part A and are within one year of joining, and you would like to switch to Medigap insurance.
- You dropped a Medigap plan to join an Advantage plan; it’s been less than one year, and you would like to switch back to the Medigap plan.
- Your Medigap insurance company goes bankrupt, is ending your coverage, or you lose coverage through no fault of your own.
- You leave an Advantage Plan or drop a Medigap policy because the insurance company misrepresented the coverage or didn’t follow the rules.
If a Medigap policy is affordable for you when you are in your open enrollment period; purchase a policy. It’s the best time to do so. If affordability is not an issue and you have guaranteed issue rights, you should consider the benefits of a Medigap insurance policy.
To learn more about your Medigap options call our office at 800 571-7390.
January 8, 2010
Tags: medigap guaranteed issue rights, medigap insurance, open enrollment period Posted in: Medicare Supplement
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