What Is Guaranteed Issue for Medicare Supplement?
Discover how Medicare Supplement guaranteed issue rights ensure access to Medigap plans, protecting you from medical underwriting regardless of health.
Medicare Supplement plans, often called Medigap policies, are designed to help cover certain out-of-pocket costs that Original Medicare (Part A and Part B) does not pay. These costs can include deductibles, copayments, and coinsurance. Private insurance companies offer these standardized plans, which work in conjunction with your Original Medicare benefits.
Original Medicare does not cover all healthcare expenses, leaving beneficiaries responsible for a portion of their medical bills. Medigap policies help manage these potential costs. The concept of “guaranteed issue” is a protective measure within Medigap, allowing individuals to obtain coverage under specific circumstances.
Understanding Guaranteed Issue
Guaranteed issue refers to a right that allows individuals to purchase a Medicare Supplement policy without undergoing medical underwriting. This means insurance companies cannot deny coverage, charge higher premiums due to health status, or impose waiting periods for pre-existing conditions. Exercising a guaranteed issue right removes the barrier of health-based eligibility for Medigap policies.
Specific Situations for Guaranteed Issue
Federal regulations establish specific situations where individuals have a guaranteed right to purchase a Medigap policy. Each situation comes with a specific timeframe during which the individual must apply.
One common scenario involves losing employer-sponsored group health coverage that supplemented Medicare. This includes situations where employer or union coverage, including COBRA, ends. If this coverage ceases, individuals typically have 63 days from the date their previous coverage ended to apply for a Medigap policy under guaranteed issue.
Another situation arises if an individual had a Medicare Advantage (MA) plan but that plan is leaving the service area, or the individual moves out of the plan’s service area. Similarly, if a Medicare Advantage plan stops its coverage, or if the individual joined an MA plan when first eligible for Medicare and disenrolls within the first 12 months to switch back to Original Medicare, a guaranteed issue right applies. In these cases, the application window is typically 60 days before and up to 63 days after the coverage ends or the individual switches back to Original Medicare.
A guaranteed issue right also exists if an individual drops a Medigap policy to join a Medicare Advantage plan for the first time and then decides to switch back to Original Medicare within the first year of the MA plan. If a Medigap insurance company goes bankrupt, or if coverage is terminated through no fault of the policyholder, a guaranteed issue right is activated.
If an individual had a Medicare SELECT policy and relocates outside its service area, a guaranteed issue right is triggered. The 63-day application period after the loss of coverage or change in circumstance is a consistent element across many of these guaranteed issue events.
Selecting a Plan with Guaranteed Issue Rights
When an individual qualifies for a guaranteed issue right, insurance companies must offer certain Medigap plans without medical underwriting. The specific plans available can vary depending on when the individual first became eligible for Medicare. For those eligible for Medicare before January 1, 2020, Plans C and F (including high-deductible Plan F) may be available, in addition to Plans A, B, D, G, K, L, M, and N. If eligibility for Medicare began on or after January 1, 2020, Plans C and F are not available to new enrollees, but Plans A, B, D, G (including high-deductible Plan G), K, L, M, and N are generally offered.
Insurers cannot deny coverage or charge higher premiums based on health conditions during a guaranteed issue period. The premium for a policy obtained through guaranteed issue will be the same as for someone of the same age and location who applied during their initial open enrollment period. The application process during these periods typically does not involve health questions.
Acting within the specified timeframes is crucial, as missing the window can result in the loss of guaranteed issue protections. If the application is submitted outside these periods, an insurer may be able to medically underwrite the policy, potentially leading to higher premiums, denial of coverage, or waiting periods for pre-existing conditions.