Many people still think the Affordable Care Act prohibited insurance companies from considering pre-existing health conditions when someone applies for a policy. Unfortunately, that’s not true for insurance plans outside of the ACA.
Medicare beneficiaries do have some protections called Guaranteed Issue Rights. We’ll review when those rights apply and how the rules differ in some states.
When we’re talking about GI Rights and Medicare, we’re mostly speaking about Medicare Supplement plans, otherwise known as Medigap plans. Medicare Parts A, B, C, and D always enjoy GI Rights, so no one can be denied access to those plans. Medigap plans do not enjoy those same freedoms.
If you have Guaranteed Issue Rights, that means that no insurance carrier can deny your application for a Medigap plan. There are about ten Medigap plans available: Plans A, B, C, D, F, G, K, L, M, and N. Plans C and F are only available to Medicare beneficiaries who turned 65 prior to 2020.
There are seven instances when you will have GI Rights for a Medigap policy.
1. You Turn 65
Everyone has GI Rights to any Medigap plan when they first become eligible for Medicare at age 65. You will have a 6-month open enrollment period, beginning on the first day of your birthday month. For example, if you were born on July 2, your open enrollment period begins on July 1 and ends on December 31. Of course, if you would like your Medicare coverage to go into effect as soon as possible, it’s best to apply about three months prior to your birthday month.
2. You Lose Creditable Coverage
It’s not uncommon for people to work past the age of 65. And it’s a myth that you have to enroll in Medicare at age 65. As long as you have other creditable coverage in place, you can postpone Medicare enrollment with no penalties.
When you do terminate your employer’s coverage (or coverage you have from your spouse’s employer), you will be eligible to enroll in Medicare with no penalties. Plus, you’ll still enjoy GI Rights to a Medigap plan. Your enrollment period begins 60 days before your creditable coverage ends and lasts 63 days past the termination date. In very rare instances, this period could last for 12 months, as is the case when you are not notified of your plan’s termination.
3. You Enrolled in Medicare SELECT and Relocated
A Medicare SELECT plan is sort of a hybrid between a Medigap plan and a Medicare Advantage plan. As long as you stay within the plan’s network of providers, it operates as any other Medigap plan. However, if you go outside the network, you will pay more for services. Traditional Medigap plans do not have networks.
If you are currently enrolled in a Medicare SELECT plan and move outside the service area, you have GI Rights to a Medigap plan for 63 days after your move.
4. Your Current Medicare Supplement Ends
GI Rights apply in this instance only when your plan ends due to no fault of your own. It does not apply if you forget to make the premium payments and the plan terminates your coverage. However, if the plan ends because the company goes bankrupt, you would have GI Rights to another Medigap policy for 63 days following termination.
5. You Are in Your Trial Right Period
Whether you enrolled in Medicare Advantage when you turned 65 or are just trying it for the first time, you have a 12-month Trial Right period. During those first 12 months, you can choose to return to Original Medicare with a Medigap plan. If you were on a Medigap plan previously, you must return to that exact plan and carrier. If you were not previously enrolled in a Medigap plan, you would be able to choose from several different insurance companies.
6. Your Current Medicare Advantage Plan Leaves the Service Area
Medicare Advantage plans operate on annual contracts, which means they can change frequently. If your current MA plan leaves the service area, you are allowed to change back to a Medigap plan within 63 days of losing coverage.
7. You Were Misled by the Insurance Carrier
Regardless of what kind of Medicare health plan you have, you have GI Rights if the insurance carrier misleads you or breaks Medicare rules. You have 63 days to change your plan.
While the rules above are true in most states, some states have more freedom when it comes to changing Medigap plans.
For example, five states have a Birthday Rule. This allows a policyholder to change their Medigap plan every year on their birthday. States that allow this include California, Idaho, Illinois, Nevada, and Oregon. Beneficiaries can only choose a policy with the same or lesser benefits than their current plan.
Maine has an open enrollment period every June. Missouri allows people to change their Medigap plans on the current plan’s anniversary date. Lastly, Connecticut, New York, Vermont, and Washington have GI Rights year-round. However, in all of these situations, certain limitations apply.
Of course, if you are healthy and do not have any chronic conditions, you can change your supplement plan at any time if you pass medical underwriting. To find out if GI Rights apply to you, call the Local Medicare Specialists.
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