Medigap and pre-existing conditions
Medicare Supplement insurance is a helpful option for people needing to save on out-of-pocket health care costs. Where it gets tricky is around the issue of pre-existing conditions. That’s why it’s important to read this article carefully.
How do insurers use pre-existing conditions?
First of all, let’s define the term. A pre-existing condition is an illness or health condition that you were either treated for or had diagnosed before your new health insurance started. You have little protection from federal law to limit insurers using what’s called medical underwriting to screen you for a policy. At the state level, you have some protection from this type of evaluation, but it varies from state to state.
It’s perfectly legal for carriers to make you wait up to 6 months for out-of-pocket coverage. Using medical underwriting, they can:
The technical term for this period is the “pre-existing conditon waiting period.”
How can I get coverage with a pre-existing condition?
The good news is that you do have some protections during your Medigap Open Enrollment Period. Insurance companies are not allowed to use medical underwriting during this 6-month period, which begins on the first day of your 65th or older birthday month. Within this period, insurers are required to cut the 6-month pre-existing condition waiting period by however many months you had “creditable coverage.” Creditable refers to most types of health insurance. This simply means that if you had 3 months of creditable coverage, your pre-existing condition waiting period would be reduced to 3 months. The only catch is that you can’t use this loophole if you had a break in coverage for over 63 days.
Be aware that you also have to enroll in Medicare Part B during your Open Enrollment Period to be eligible for protection from medical underwriting.
If you miss your OEP, you’ll have no protection against medical underwriting and a finding of certain health conditions could be grounds for denying you coverage. In general, coverage can be denied only during the so-called “look-back period,” or the 6 month time prior to the start of your policy when a health condition was diagnosed.
What are my other options to get around these restrictions?
The saving grace to the pre-existing conditions situation is what’s known as your “guaranteed issue rights.” There’s a list of these, which include:
Only 4 states offer protection to Medigap applicants once the Open Enrollment Period ends: Connecticut, Maine, Massachusetts, and New York. Regardless of medical history, these states legally demand that insurers offer annual guaranteed issue right for every person in Original Medicare — Parts A and B. 28 states require carriers to provide plans to people eligible for Medicare if they had employer-sponsored coverage that was terminated.
Once past your OEP, guaranteed issue rights usually apply to 6 Medigap plans — A, B, C, F, K, and L. The remaining plans, D, G, M, and N are offered during your Open Enrollment Period in most states.
Our recommendation is that you look at more than one Medigap insurance companies before buying a plan. Particularly if you are worried about having your coverage delayed, because not every insurer requires a pre-existing condition waiting periods.
Still confused? Call us!
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A pre-existing condition is an illness or health condition that you were either treated for or had diagnosed before your new health insurance started.
You could be denied coverage, charged a higher premium, or have your coverage start date delayed.
I have a pre-existing condition. How can I get coverage without having to face medical underwriting?
Insurance companies are not allowed to use medical underwriting during your 6-month Medigap Open Enrollment Period, which begins on the first day of your 65th or older birthday month. Within this period, insurers are required to cut the 6 month pre-existing condition waiting period by however many months you had “creditable coverage,” i.e. most types of health insurance. This simply means that if you had 3 months of creditable coverage, your pre-existing condition waiting period would be reduced to 3 months. Remember that this doesn’t apply if you had a break in coverage for over 63 days. You also have to enroll in Medicare Part B during your Open Enrollment Period to be eligible for protection from medical underwriting.
Regardless of your medical history, if you live in either Connecticut, Maine, Massachusetts, or New York, insurers have to offer you annual guaranteed issue rights, even if you missed your OEP. 28 states require carriers to provide plans to people eligible for Medicare if they had employer-sponsored coverage that was terminated. Once past your OEP, guaranteed issue rights usually apply to 6 Medigap plans — A, B, C, F, K, and L. The remaining plans, D, G, M, and N are offered during your Open Enrollment Period in most states.
- Best overall Medicare supplement for new enrollees: Plan G.
- Best overall Medicare supplement before 2020: Plan F.
- Best low cost Medicare supplement: Plan K.
- Best alternative to Plan G Medicare supplement: Plan N.
Medicare Supplement policies are private health insurance designed to cover gaps in Original Medicare. They are also known as Medigap plans. These take care of costs such as copays, coinsurance, and deductibles which can become expensive if you need regular care from a doctor or hospital. If you need medical care while traveling outside the U.S., you can buy Medigap policies to help cover those costs. As a supplement to Original Medicare, you’re required to have Part A and Part B before you canget a Medigap policy. This way, Medicare is responsible for the Medicare-approved costs of the covered care, and the remainder is covered by your Medigap plan.
Optimal coverage comes with higher costs, making Plan F the most expensive Medigap plan. Plan F is known as “first-dollar coverage” and it takes care of everything provided during a doctor or hospital visit. Your only responsibility is for dental, vision, medications, and equipment, such as hearing aids.
The Federal government ended the Plan F option for new enrollees last year to keep the healthcare system from being overused by patients who had their deductibles covered. The next best coverage after Plan F is Plan G.
Medigap Plan G offers every advantage of Plan F except for the deductible, which you have to cover. Because it isn’t as comprehensive as Plan F, Plan G is more affordable.
For people who don’t go to the doctor often, Plan K is worth considering. It is the most affordable because it provides just 50% of Medicare Part B coinsurance, the Part A deductible, blood, skilled nursing, and Part A hospice costs. For comparison, Plan G and others offer full coverage of these expenses, and more.
It’s hard to argue against plans which cut your traditional Medicare costs. For most people, having the extra coverage these supplemental plans provide is common sense, unless they want the specific features of a Medicare Advantage plan.
Most people would benefit from not having to pay out-of-pocket to stay healthy. Medicare supplement insurance or a Medicare Advantage plan offer vital savings now, but are indispensable should a catastrophic health issue occur.
Of the 10 Medicare-approved Medigap plans, Plan G and Plan N are the most popular. Plan F is no longer available to new Medicare enrollees as of 2020, but it is still popular among people who bought this plan prior to 2020.
- Plan F$128–$342
- Plan F (high deductible)$22–$88
- Plan G$106–$325
- Plan G (high deductible)$29–$58
Before getting a Medicare supplement plan, you need to be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). People with Medicare Advantage Plans who want to go back to Original Medicare can buy a Medigap policy prior to switching.
The security of having lower or no out-of-pocket healthcare costs can offset the premiums you’ll have to pay for whichever Medigap plan you choose, which vary depending on the benefits offered.
The national average cost for Medicare Supplement Plan F is $1,824 annually, which is $152/month; Medigap Plan G will cost you around $143 per month.
Since Plan F was discontinued for new enrollees as of 2020, Plan G offers the most coverage for people 65 and older. It has a lower premium than Plan F and duplicates its benefits, except for the Part B deductible.
It depends on your specific needs, but for most people a Medigap plan is very useful in supplementing the coverage of Medicare Part A and Part B. A Medicare Advantage plan is an affordable way to get healthcare coverage not offered by Original Medicare.
Historically, Plan F has been the most popular because it covers all the out-of-pocket costs Medicare does’t pay for. This includes the 15% extra charge billed by providers who do not take Medicare as full payment.