Medicare Supplement (Medigap) Open Enrollment: A Guide

Part A of Medicare pays for inpatient care in a hospital or skilled nursing facility, as well as hospice care, and Part B pays for outpatient care and ancillary services. Original Medicare consists of Parts A and B.

Private insurance companies provide Medicare Supplement (or Medigap) plans to fill up the coverage gaps left by Original Medicare. Every plan, from A to N, provides the same basic protections to its members, while the specifics of what each one pays for can vary.

According to a survey from the Kaiser Family Foundation (KFF), in 2015, one in four adults with Original Medicare also had a Medigap supplemental policy to assist pay for deductibles, cost-sharing, and catastrophic costs.

Frequently, significant gaps exist in Original Medicare coverage. For instance, nearly six million Medicare recipients have not been offered Medigap to cover all or part of the cost-sharing for COVID-19 treatment.

Some Medigap insurance covers benefits such as overseas medical evacuation. Medicare expert and Commonwealth Fund vice president Gretchen Jacobson, Ph.D., agrees that having Medigap coverage makes it easier to budget for out-of-pocket expenses. To paraphrase, “The monthly premium is your primary responsibility, and it can add up quickly.”

There are 10 standardized Medigap plans available in all states except Massachusetts, Minnesota, and Wisconsin; these plans all provide the same basic benefits but cover varying percentages of your medical expenses.

During open enrollment, Medicare recipients can join any of the available plans without facing penalties such as higher premiums, medical underwriting, or even coverage refusal. It is easiest to enroll in or change Medicare plans during the designated open enrollment period for each plan type.

The optimal time to get a Medicare Supplement policy is during your initial Medigap open enrollment period. If you and your spouse are both 65 or older and enrolled in Medicare Part B, your initial coverage period will begin on the first day of the month. Additional open enrollment periods exist for those under the age of 65 in several states.

Between these dates, insurance providers cannot refuse to issue you a Medicare Supplement policy due to your health or the presence of a preexisting condition.

To paraphrase what Jacobson has to say regarding Medigap policies, “one of the most crucial things to realize is that you don’t have many opportunities when you’re assured to be awarded coverage.” You may have fewer options after [your initial open enrollment period] ends, and these limitations may vary from state to state.

An advocacy group known as the Better Medicare Alliance is driving change to make signing up for Medicare easier. People’s inability to make informed coverage decisions during the brief open enrollment period is cited as a major contributor to health equity gaps in a recent report that urges Congress to take action.

Parts A (hospital insurance) and B (medical insurance) of Original Medicare must already be in place for you to be eligible for Medigap (medical insurance).

You can join Medicare in one of three ways:

• The age of 65 is now upon you.
• You’ve been disabled for at least 24 months and receiving Social Security Disability Insurance.
• You’ve been diagnosed with a terminal condition like end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) (ALS).

Can You Be Denied a Medicare Supplement Plan?

Depending on the insurance company, your age, your health history, and where you live, you may be denied coverage if you try to enroll in a Medicare Supplement plan outside of your initial Medigap open enrollment period. For the most up-to-date information on Medicare Supplement plans and if you risk being denied coverage if you miss your initial open enrollment period, it is advisable to contact your local Medicare office, as state rules and regulations governing medical underwriting vary.

Your initial Medicare enrollment period is the only time you can buy a Medicare Supplement plan without having to worry about being turned down for coverage based on your health or having to pay a penalty. During the initial open enrollment period, Medicare recipients can often select a plan at the lowest possible cost without sacrificing coverage quality.

Centers for Medicare & Medicaid Services defines “your rights to buy certain Medigap policies in specific instances outside of your Medigap Open Enrollment Period” as “guaranteed issue rights” (CMS).

Special Scenarios Granting Guaranteed Issue Rights

Amanda Bethke, director of business development at Aeroflow Healthcare, a manufacturer of durable medical equipment (DME) that patients can use at home, says, “There are several instances that provide these Medigap benefits.” In her line of employment, she frequently encounters such situations. To quote the Affordable Care Act: “In some cases, insurance carriers are required to sell you a Medigap policy, are required to cover all of your previous health conditions, and are prohibited from charging you more money because of your past or present health problems.”

The following are examples of such situations:

• After initially enrolling in Medicare Advantage when you turned 65, you later elected to return to Original Medicare (known as trial rights).
• Because you no longer live in the Medicare Advantage plan’s coverage region or because the plan itself has ceased operations.
• The Medicare supplement plan your company provided terminates.
• There is no longer any coverage under your Medigap plan.

How Medicare Defines a Preexisting Condition

Any medical problem that you were diagnosed with or treated for before the effective date of your new health insurance coverage is considered a preexisting condition. Undiagnosed or untreated conditions may not prevent Medicare from labeling them as preexisting.

Consider the following scenario: you have diabetes requiring insulin and CGM and you are going to turn 65. You suffer from sleep apnea and require the aid of a CPAP machine every night. Given that you have already been diagnosed and are receiving treatment for both, Medicare will consider them to be preexisting conditions.

Medigap coverage requirements for preexisting conditions vary by state. If you want to enroll in Medicare outside of your first enrollment period and aren’t sure if you qualify, contact the Medicare office in your state.

Problems with Insurance Coverage Due to Previous Illness

If you do not fit into any of the categories above, you do not have assured issue rights and may be responsible for paying for treatment of your previous condition.

Among the remaining healthcare coverage options, “Medigap is one of (if not the last) that insurers can underwrite,” adds Jacobson. What this means is that private insurance firms can discriminate against you based on your health, your previous condition(s), and your smoking habits outside of the assured issue period.

To assess the level of risk (i.e., the amount of money the private insurance company stands to lose) associated with providing you with a Medigap policy, medical underwriters analyze your medical records. For instance, a study of medical underwriting in the long-term care insurance market predicts that 40% of the general population (excluding limits based on wealth) will have their long-term care insurance application refused due to medical reasons.

If you want to avoid having to go through medical underwriting and increase your chances of being approved for coverage, applying for a Medigap policy within the first six months after receiving Medicare Part B is your best bet.

Changes to your Medicare health and prescription plans can be made every year between October 15 and December 7 during the program’s “open enrollment” period. However, data from KFF shows that 57% of Medicare subscribers do not take use the potentially money-saving option to compare their Medicare coverage choices. Of those enrolled, 66% of people 85 and up don’t even bother to study their plan options during open enrollment.

If you’re interested in a Medigap policy but missed the initial enrollment period, Jacobson says you should know that “Medigap insurers don’t have to sell you a plan that you want and can charge you higher premiums if they do choose to sell you a policy based on where you live, your health status, and your age.”

According to CMS, it is also against the law for insurance companies to sell you a Medigap policy if you are enrolled in Medicaid or have a Medicare Advantage plan.

CMS also emphasizes that different insurance providers may charge you different amounts for the same Medigap coverage, so it’s in your best interest to shop around, compare policies within the same plan type, and zero in on the most important specifics to you and your condition.

If you miss your chance to enroll in Medicare during the initial registration period, you will have to wait until the yearly open enrollment period to do so. But suppose you have a guaranteed issue right, as we’ve shown above. In that case, you can engage with a private insurance company outside your initial open enrollment period to enroll in coverage that better meets your needs.

There are two main types of insurance enrollment periods: open enrollment and yearly enrollment.

Regarding health insurance provided by one’s job, the term “annual enrollment” is commonly used. The open enrollment period allows employees to make changes to their health insurance plans, and typically runs from the beginning of November until the middle of December. Alterations of this nature become effective on January 1 of the following year.

While Medicare enrollees are excluded from the definition of “open enrollment,” everyone else who does not receive health coverage via their work is eligible. Open enrollment, which is similar to yearly enrollment, is a period during which eligible individuals can make changes to their health insurance. Medicare recipients have an annual open enrollment period from October 15th to December 7th.

Medigap coverage is best purchased within the first enrollment period, which is the first six months after turning 65 and enrolling in Medicare Part B. During open enrollment, you won’t have to worry about paying late fees or having your coverage canceled because of preexisting conditions.