Medicare Supplement, or “Medigap,” insurance policies are designed to fill the cost-sharing gaps for people with Original Medicare. (They do not, however, supplement the coverage in Medicare Advantage Plans.) All Medigap policies must cover, for example, the 20 percent coinsurance charge for physician and other medical services and items. People who are turning 65 have what’s called a “guaranteed issue right” to buy any Medigap policy sold in their state during a 6 month Medigap Open Enrollment Period, regardless of health status. But what happens later? Can they buy Medigap insurance outside of an open enrollment window even if they have a health condition?
In most states, the answer is a qualified “yes” that depends in part on a person’s health. Most Medigap insurers ask health status questions to screen applicants for insurability through a process called “medical underwriting.” For those who want to buy a Medigap policy but have no guaranteed issue rights under federal or state law, underwriting becomes a threshold they must successfully cross before other considerations like cost and affordability factor in. Companies typically ask questions about pre-existing medical conditions, medications, height and weight, hospitalization and nursing facility use, and planned medical procedures. In some cases, insurance underwriters will call applicants to verify or clarify their responses.
Your State Health Insurance Assistance Program (SHIP) will help you assess Medigap options and guidelines specific to your state and your individual circumstances.
Visit the SHIP Locator to find the SHIP program serving you.
Meanwhile, if you think you have missed your “guaranteed issue right” to buy a Medigap policy regardless of health status, it is important to keep in mind that underwriting guidelines differ among companies. This makes it more or less difficult to pass the test and qualify for coverage. Some companies’ guidelines are more restrictive than others. Here are some examples:
• Height and Weight: Many companies will not insure applicants who are seriously overweight or underweight. Agents refer to “build charts” that show acceptable weight ranges for the various heights. Company A, for example, will decline coverage for a 5’8’’ person whose weight is less than 99 pounds or more than 270 pounds. In contrast, Company B will not insure a 5’8” person who weighs less than 112 pounds or more than 264 pounds. Meanwhile, Company C does not screen for height and weight.
• Prescription Drugs: Companies ask applicants to report their prescription medications and authorize the release of information from physicians and pharmacy benefit managers. They decline applicants who use certain drugs associated with costly conditions. Company D disqualifies applicants who use Abilify on the assumption that they have a bipolar or schizophrenic disorder. By comparison, Abilify does not appear on Company E’s partial drug list, nor does it list bipolar disorder or schizophrenia as uninsurable conditions.
• Controlled Chronic Conditions: Companies may sell insurance to applicants whose chronic conditions are under control as defined by the company. Company F will insure some applicants with certain long-standing conditions whose medications or treatments have not changed over the past two years. The company declines coverage for people with diabetes who use more than 50 units of insulin daily but may cover those who use less than 50 units of insulin or take no more than two oral medications for diabetes.
• Disqualifying Conditions: Companies’ disqualifying conditions lists vary in scope. In its 2011 Underwriting and Administration Guide, Company G cited more than 100 conditions that could disqualify an applicant if diagnosed or treated in the last five years, including attempted suicide, Crohn’s disease, and narcolepsy. At the other end of the spectrum, the application used in Texas by Company H’s policies lists only kidney disease, hospitalization within the last 90 days, proposed hospitalization, and recommended treatment for organ transplant, back or spine surgery, joint replacement, surgery for cancer, heart surgery, or vascular surgery. The company uses affirmative answers to other questions about heart disease, diabetes, and cancer to set premium rates but not to disqualify applicants.
It’s clear that it’s more or less difficult for people with Original Medicare to cross the underwriting threshold depending on the company. Some companies sell Medigap policies to beneficiaries with pre-existing medical conditions. If you are shopping for Medigap insurance outside of an open enrollment period, keep in mind that a pre-existing condition may or may not disqualify you. Ask for details about the company’s underwriting guidelines to make sure. Remember, your State Health Insurance Assistance Program (SHIP) will help you navigate Medigap options and guidelines specific to your state and your individual circumstances. Visit the SHIP Locator to find the SHIP program serving you.