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.