June 2016 | Omaha Insurance Solutions

A gentleman called me who was losing his group health coverage from a former employer. He was a retiree from a Fortune 100 company. You would recognize the name of the company immediately. As part of his retirement package, he had a very generous health plan for himself and his wife. He had been on it for decades, but the company could no longer afford to maintain it. They canceled the plan, so my client found himself cast out into the Medigap world at 92 not knowing what to do, and he didn’t realize that he would need a Medigap guarantee issue to be get a plan.

Medigap Guarantee Issue Solution

When you are a Medicare beneficiary and you loss group coverage, you have what is called a guarantee issue period. It is a very limited opportunity that has an exasperation date on it. It is an incredibly important guarantee for those who have pre-existing conditions.

What is Medigap Guarantee Issue?

What is guarantee issue for a Medigap policy? How does it work?  What should you do to make sure you don’t miss out?  Guarantee issue for a Medigap policy applies to a number of situations.  I will just speak to one—when you involuntarily lose your group health coverage while on Medicare Part A & B.  Guarantee issue means that an insurance company must offer you a Medigap plan—usually plans A, B, C, & F—without asking health questions.  They must sell it to you no matter your health condition.  For those with pre-existing conditions that would exclude them, this is a treasure.  (Each state may handle guarantee issue situations somewhat differently, but this is the general concept.)

Medigap Guarantee IssueHow Does Medigap Guarantee Issue Work?

How does guarantee issue work for a Medigap policy when you have involuntarily lost your group health coverage? The company that is ending group health coverage will usually give you sufficient time to find other coverage. You are able to purchase a supplement as early as 90 days ahead of time. After coverage has ended, you usually only have 63 days to find coverage without going through underwriting. If you miss that time frame and you have a serious health issue, you will not find a Medigap policy. You will only have Medicare.

What Should You Do to Get Your Medigap Guarantee Issue?

What should you do if you are losing your group plan that covers your Medicare deductibles and coinsurance? First get educated about Medicare. Second get a quote and start looking for a Medigap plan. Third see if you can pass underwriting so you are not restricted to the more expensive plans, but please don’t doddle. There is a clock ticking in terms of your guaranteed issue period.

To summarize, you have a special opportunity to get a Medigap plan when you lose your group plan. The special opportunity is that you do not have to answer health questions for a defined period and the insurance company has to sell you a plan. You need to be aware of the rules and follow them so you do not miss out. Still try underwriting so you have more options, but you have the guarantee provision to fall back on.  There are rules and time limits around guaranteed issues. Make sure you fully understand these rules and the ramifications. Call to find out the facts so you don’t miss out. 402-614-3389 OmahaInsuranceSolutions.com

I quoted a prospective client a Medicare supplement rate that was significantly less than the plan he was currently on. I mentioned that he needed to answer health questions.  He would have to go through underwriting because he was no longer in his Open Enrollment. He was upset and said no way. I asked why. He told me about when he applied for life insurance. He went through the underwriting process. A nurse came to his home, weighed and measured him, took blood and urine, asked a bunch of questions. Then they had to get reports from the various doctors. One of the doctors had to write a letter about a particular health issue. The whole process was long, involved, and intrusive. There was no amount of money that could induce him to go through it again. When I said I could probably do the Medicare supplement underwriting in sixty seconds or less, his tone changed.

Medicare Supplement Underwriting

underwriting-services

So what is underwriting? It is a simple process that insurance companies use to find out about you and your health. You don’t have to go to your doctor to be poked or prodded. The whole process can be done with a few questions in person or over the phone. It is a set of basic health questions that you answer.

What are the health questions? Let me group them into four categories: knock out questions, height & weight, current issues, smoking/non-smoking.

What does Medicare Supplement Underwriting look like?

What are knock out questions? They are questions that have to do with serious medical conditions. In other words, if you have this serious medical condition, you are ineligible for a Medicare supplement. You are knocked out of consideration. Now to clarify, you can’t be denied Medicare, but a private insurance company can deny coverage for a supplement outside of your Open Enrollment Period.

Medicare Supplement UnderwritingWhat are some examples of knock out questions? Are you currently confined to a wheel chair, nursing facility, or hospital bed? Do you currently receive assistance bathing, transferring, toileting, eating, dressing or need the assistance of a walker? In the last two years, have you received treatment for cancer, leukemia, heart attack, congestive heart failure, multiple sclerosis, chronic kidney disease, diabetes with hypertension, stroke, etc.?

The second category of questions has to do with height and weight. This is always a difficult question. If I asked my wife her weight, it would be very quiet and cold in the Grimmond house hold for a while. Fortunately, I have never been thrown out of anyone’s home or had things thrown at me when I ask that questions. Height and weight is an important determiner of future health, so it has an impact on price.

The third category is current issues. For example, you may have a diagnosis for a future treatment, like a knee replacement or cataract surgery. An insurance company will want you to take care of that before you change supplements, or they just won’t cover that procedure for the first six months. You may have respiratory issues in the past that do not exclude you now, but if you are currently being treated for the issue, that could prevent you from getting the supplement for a time.

The fourth category is smoker or non-smoker. That one should be obvious. There is plenty of medical evidence about the health risks associated with smoking. Smoking also includes chewing. I met with a gentleman who described himself as a non-smoker, but when I pointed out he had a circle print on his back jean pocket, he fessed up that he dipped—on occasion. That is still considered a smoker—tobacco user. Same thing, as far as the insurance company is concerned. Smoker/Non-smoker is the one health question that can be asked during Open Enrollment.

Medicare Supplement Underwriting is Easy

Why does this matter to you? Because your answers determine whether the insurance company accepts or denies you. It determines your health category and consequently your monthly premium.  Underwriting is not a difficult or a daunting task with a skilled insurance agent. It just takes a few minutes of your time, and you may be able to save yourself some money and maybe improve your coverage as well.   The key thing to understand is that not all insurance companies have the same underwriting guidelines. Some may be laxer or more restrictive than others. They may be lenient on one condition or more severe on another. That is when an experienced agent can help you with getting the best outcome for your underwriting. He can guide you to the company that will be most favorable to your condition for the best possible price.  Call OmahaInsuranceSolutions.com  402-614-3389  for help with your Medicare Supplement underwriting.

A prospective client called me about saving money on her Medicare supplement. I asked her the basic supplement health questions and gave a quote.  We set up a time to meet.  At the meeting, I started going through the standard health questions on the application.  When I came to the question about recommended future treatments, she said no, but the way she answered bothered me.  So I asked it a different way.  “Did the doctor suggest that you have anything done, like cataract surgery, knee or hip replacement?”  Then she lit up.  “My hips are really bad,” she said.  “He thinks I should replace them sometime.”  “So when you say sometime, are you talking about in a year or two?”  “Oh no,” she said.  “In the next couple of months.”  I closed my notebook.  We were done.

Supplement Health Questions Broken Down

Recommended treatments by a physician could potentially cause a problem when you switch supplements.  Three things to know: 1.) what is a recommended treatment, 2.) why does it matter, 3.) what should you do about it.

Most of the time when we see the doctor it is because we are sick right now. She makes a diagnosis and recommends an immediate treatment.  ‘Take this pill now.’  ‘Have open heart surgery next week.’  Sometimes the diagnosis leads to a recommendation for treatment sometime in the future. ‘Your knees are deteriorating.  You should have a knee replacement in the next year or so.’  When your doctor puts a recommendation in your medical records for a future treatment, that is a big deal. To an insurance company, that means there will be a future big bill for whoever is insuring you at that time.

Understand the Supplement Health Questions

shutterstock_279874211-300x274The problem is that you could get stuck with the bill instead of the insurance company if you don’t follow the rules. If you have something done that was recommend before you got the new policy, like cataract surgery within six months after getting a new Medicare Supplement, the insurance company will probably not pay their share of the expense.  The health questions in the application are designed to disclose recommended treats and prevent the new insurance company from getting stuck with the bill.  They would likely refuse payment and call for doctor’s records to see if there was a recommendation for treatment before you signed the application.  After six months, you are less likely to have any trouble.  They cannot hold back paying for treatment indefinitely.  The bottom line is, if you have any recommended treatments, finish them up before switching supplements.

Manage the Supplement Health Questions

b3c84bb379d3466025bbe2c14b628151This problem, of course, can be avoided. Check with your doctor.  See if he is recommending any treatments and see if he put that in your medical records.  Check with the insurance company if you recently switched supplements. Doctor’s offices will not usually check with an insurance company on a supplement because they will assume the insurance company will pay when Medicare pays.  If you recently switched supplements, call and ask ahead of time if there will be any issues about a procedure.  It is always good to cross your T’s and dot your I’s when it comes to new insurance plans.

Ask an Expert about Supplement Health Questions

A mistake around a recommended treatment when changing Medicare supplements could result in bills to you for thousands of dollars. Know whether you have any recommendations from a physician for future treatments in your records.  Understand what that means in relationship to a new Medicare supplement.  Talk with someone who can ask you the right questions when you are making a change to your supplement coverage 402-614-3389OmahaInsuranceSolutions.com

 

For two years, my father was on dialysis.  Those were tough years.  When I got a client on dialysis, I wanted the best for him.  Kidney dialysis is one of the pre-existing conditions that usually excludes you from a supplement.  My client had a one-time opportunity.  I was going to make sure he got it!

Obama Care Confuses Pre-Existing Conditions

logo-pcip-2Pre-existing conditions are confusing when it comes to Medicare.  The ACA (Affordable Care Act) a.k.a. Obama Care made it more confusing because ACA covers pre-existing conditions, but ACA is not Medicare.  Different rules govern Medigap policies.  ACA applies to everyone 64 and younger.  Medigap policies are for everyone 65 and older.

Medicare Has No Pre-Existing Conditions

Medicare itself cannot deny coverage to anyone because of pre-existing conditions.  Medicare means Original Medicare.  Original Medicare is Medicare Part A for hospital and Part B for doctors and outpatient.  Medicare Part D cannot be denied for pre-existing conditions no matter the condition or cost of the medications.  Medicare Part C (or Medicare Advantage) must accept you as well, but for one exception–ESRD (End Stage Renal Disease).  You can be denied entrance to Medicare Advantage if your kidneys are permanently shut down and you are on dialysis.  All Medicare beneficiaries may enroll in a Medicare Advantage plan, except for that one pre-existing condition.

Medigap Has Pre-Existing Conditions–Sometimes

Denied-Stamp-ResizedAn insurance company, however, can deny you a Medicare Supplement/Medigap plan because of pre-existing conditions, except during your Open Enrollment Period or Guaranteed issue.  The rules around your Open Enrollment Period are confusing.  You can enroll in Medicare when you turn 65 and enroll in Medicare Part B.  That is called your Open Enrollment.  The time period for that is 3 months before the month of your birthday, the month of your birthday, and 3 months after your birthday.  The same term–Open Enrollment–is used for enrolling in a Medicare supplement, but the time period is different.  Open Enrollment for a supplement is from the month of your birthday and five months after.  Same term–Open Enrollment Period–but different time periods that apply to different things.  Isn’t that nice!

During your Open Enrollment Period for a supplement, the insurance company may not ask you health questions.  They must give you the best possible rate.  Even your weight is not counted against you if you are a few pounds over the normative height/weight charts.  You can be on chemo, dialysis, recovering from a stoke.  It doesn’t matter.  The insurance company MUST take you during this time period.  AFTER the six month Open Enrollment Period, they can ask health questions when you go to purchase a Medicare supplement, and based upon your answers, the insurance company could rate or even deny you.

pre-existing-conditionsWhat are some of the health questions?  Are you in a wheel chair?  Are you an insulin dependent diabetic?  Have you had a heart attack, stroke, or cancer in the past two years?  All of these questions are “knock out” questions.  If you answer in the affirmative, you will be denied a Medicare supplement.  You cannot be denied Medicare, but you can be denied the ability to purchase a Medicare supplement at any price.

Know the Rules or Find Someone Who Does

The ACA changes that permit acceptance into a health plan with pre-existing conditions created confusion in the Medicare world.  Beneficiaries need to clearly understand that a pre-existing condition can count you out of a supplement unless it is your Open Enrollment Period or Guarantee issue situation.  It is critical that persons with serious health issues be vigilant about these Medicare rules and/or find someone who will be vigilant for you.

Don’t miss your Open Enrollment Period.  If there are any questions, give us a call at 402-614-3389 or even call Medicare 800-633-4227.  Make sure you understand the rules that apply to you.

Contact: Omaha Insurance Solutions

 

 

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