When can I buy a Medigap policy?

Are you turning 65 soon?  You might find out that looking through Medicare options is like trying to put together a 1,000-piece jigsaw puzzle.  Fortunately, in this and upcoming blogs, we have selected some frequently asked questions to talk about in more detail.  Today’s article is about buying a Medigap policy.  

We hear this question all the time; “When can I buy a Medigap policy?”  The good news is you can buy Medigap (Medicare Supplement) at any time throughout the year and you don’t have to wait until October 15 – December 7.  The stipulation is, you might have to go through underwriting to qualify for a different Medigap policy. 

In this blog, we will outline:

(1) When you can purchase a Medigap policy without having to go through underwriting.

(2) What is underwriting?

(3) When you can change your Medigap policy if you aren’t happy with it. 

If you purchase your Medigap policy when you are first eligible for Medicare, you can purchase any policy sold in your state without having to go through underwriting.  This means if you have any health problems, you can purchase a Medigap policy at the same rate as a healthy person, if you purchase it within your open enrollment period.  Each person’s open enrollment period will start the first day their Medicare Part B is effective and it will last for 6 months. 

If you decide to change your Medigap policy outside of your open enrollment period, typically you will go through underwriting.  This means, if you have some health problems, the insurance companies could either deny coverage or charge you more due to certain health conditions.  Keep in mind, even though Medigap policies are standardized, the health questions are not.  So, just because you may not qualify for one carrier doesn’t mean that you will be turned down for another carrier.  Check with our advisors to see if there is an option that fits your needs. 

If you are about to lose your group health coverage, you might be eligible for Guaranteed Issue, which is another way you can purchase a Medigap policy without having to go through underwriting.  There are many different qualifications for a Guaranteed Issue period.  Please click here to learn more about your Medicare rights.

To compare prices of different Medigap policies and carriers available in your state, click here.

Now that you know you don’t have to wait until October 15 – December 7 to make changes to your Medigap policy, and you know a little more about changing your Medigap (Medicare Supplement), please don’t hesitate to give us a call at (877) 759-5760 or send us an email at seniorservices@morganwhite.com with any questions you may have pertaining to your specific situation.  Be sure to mention you heard about us through our blog!  Have a great day! 

Source:  Medicare.gov

2014 Medicare Supplement Insurance

Are you wondering what changes the Affordable Care Act (Obama Care) has in store for 2014 Medicare Supplement Insurance?  Most consumers are confused about what changes they should expect from this type of insurance coverage.  Some commonly asked questions are: Will they still ask health questions on the application?  Will the 2014 Medicare Supplement Insurance be subject to the health insurance tax of 8 billion in 2014?

In this article we will cover these common questions and inform you of what to expect out of your Medigap planContinue reading

Underwriting Medicare Supplement Plans

Before jumping into the Medicare Supplement market, companies must figure out the different risks and rewards to being in the business. There are a lot of factors to consider when looking at underwriting Medicare supplement plans.  There are actuarial tables for rates, underwriting health questions to determine eligibility, state laws to comply with, federal regulated benefits to adhere to, and many other factors that go into underwriting Medicare supplement plans.  This article should help people realize some of the risk factors that have to be considered.

Underwriting Medicare Supplement Plans

Medicare Supplement Insurance Premiums by Medicare Insurance Finders

Underwriting Medicare Supplement Plans – Actuarial Tables

This is probably the easiest of things for an insurance company to complete since they typically will pay an outside actuarial company to handle rate tables.  However, prior to  the actuarial figures there are many things that are needed:

  • What states will the company be issuing policies?
  • What are the underwriting requirements in those states?

Premium Rates & Rate Increase Strategy

What is commonly seen in the Medigap world is a company that comes out with a super low rate and everyone flocks to that plan (healthy and unhealthy). Once this plan becomes loaded up and the premium is on the books, claims start to hit the books.   Then as claims begin to come in the low rate increases take place – sometimes these rate increases occur even when loss ratios are low to help prevent large increases the following year.

However, all you need is a few cancer patients or individuals with ESRD to have some high claims come in and raise the premiums for everyone on the group.  INSURANCE COMPANIES CAN NOT RAISE THE RATES FOR AN INDIVIDUAL!! THEY MUST RAISE RATES FOR THE WHOLE GROUP. 

Introduce Different Medigap Plans

One strategy that was common several years ago which has not been seen recently was introducing plans A-G and then introducing alternative plans several years later after the Plan F & G had received high rate increases.  This hit a high right before the 2010 Medicare Modernization Act, when the Plan J was popular; however, no company to my recollection has done this with the Plan N.

The purpose of this was for an insurance company to be able to stay in the state while being able to raise their rates on plans that needed rate increases.  Certain plans are not Guaranteed Issue plans which helps prevent high risk individuals from coming onto these plans.

State Laws to Consider

Each state has different laws that must be followed when underwriting Medicare Supplement plans.  You can view an article on our Medicare Insurance Finders website to see different MEDIGAP LAWS and how they vary state to state.  These laws make it complicated for an insurance company to have a universal application that works in each state as well as having underwriters trained on general questions.  Instead, they have to know and understand state specific laws.

An Example would be Tennessee asking their tobacco question in their health questions section of the application.  This means that individuals in Open Enrollment who use tobacco get non-tobacco rates.  An insurance company has to account for how many tobacco users are on non-tobacco rates because of when they signed up for their health plan.

To learn more about Medicare Supplement Insurance contact us at 1-877-936-2991.