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Medicare Supplement Open Enrollment: A Crucial Period to Buy a Policy

by: admin

The Medicare Supplement Open Enrollment Period (OEP) allows one to maximize his or her efforts in securing a Medicare Supplemental Insurance Plan (Medigap).

During the OEP, applicants stand to gain several advantages that will result in getting the coverage needed in achieving secured retirement years, both for health and financial issues that one may face.

What do I need to know about Medicare Supplement open enrollment period?

The open enrollment period is a six-month period when private insurance companies cannot implement a medical underwriting procedure even if the applicant has pre-existing conditions. It allows applicants to have a more comfortable and seamless enrollment process when selecting and purchasing a Medigap policy.

Here’s quick access to the different parts of this post:

1.   Medigap Open Enrollment Eligibility

To be eligible for Medicare Supplement, you must:

√ Be 65 or older

√ Be enrolled in Medicare Part B

The open enrollment period automatically begins when both factors above are met.

Purchasing a Medigap policy outside the OEP may lead to limited health coverage, options and may even cost more. Some states have additional open enrollment periods. Applicants must consult with their licensed Medigap insurance agents regarding this matter.

Once your open enrollment begins, it cannot be delayed or replaced. (1)

2.   The best time to buy Medigap Insurance Plan

Let’s further illustrate different scenarios when you should buy a Medigap insurance policy.

Medicare Supplement Enrollment Period Scenarios
The applicant is 65 or older The OEP begins once the applicant enrolls for Part B coverage. However, the rule of thumb is to join Part B coverage once the applicant is first eligible, to avoid late fees and the like.
The applicant is turning 65 The best time to purchase a Medigap plan is during the six-month period that begins on the first day of the month that the applicant becomes 65. Applicant must be enrolled in Medicare Part B too.
The applicant is under 65 Certain states offer an open enrollment period for individuals under the age of 65. As per Senate Bill 42 (SB 42), private insurance companies that offer Medigap policies to individuals 65 and older must also provide the same plans to anyone under the age of 65 who qualifies for Medicare, mainly due to a disability.
The applicant has group health coverage through an employer or union Applicants may want to wait to enroll in Part B if he or she is part of group coverage. This is because benefits offered by employer plans are similar to Medigap policies.

When employer coverage ends, applicants get a chance to enroll in Part B without a late enrollment penalty. The Medigap OEP will then start once the applicant has enrolled in Part B.

3.   Benefits of buying a Medigap plan during the open enrollment period

Enrolling during this period allows applicants these benefits:

♦ A private insurance company cannot refuse to sell you any Medigap policy it offers.

♦ A Medigap insurance company cannot charge you a higher premium than they charge others who are 65 and older or have health conditions.

♦ A private insurance company cannot delay the start of your Medigap coverage.

Do take note that even though Medigap coverage cannot be delayed during the OEP, private insurance companies may still make applicants wait for cases linked to a pre-existing health condition.

4.   Medigap OEP Pre-Existing Condition Waiting Period

A pre-existing condition is a health problem that an applicant has before the date a new insurance policy begins.

For private insurance companies that have pre-existing waiting periods, these companies can refuse to cover for out-of-pocket health care costs related to the applicant’s health condition for up to six months.

Also, coverage for a pre-existing condition can only be excluded in a Medicare Supplemental policy if the said condition was treated or diagnosed within six months before the date the coverage begins.

How to shorten (or even avoid) the Medigap pre-existing waiting period.

To do so, an applicant must meet all of the following points:

♦ You must buy a Medicare Supplemental Insurance Plan during your open enrollment period.

♦ You are in the process of replacing creditable health coverage.

♦ You have had at least six months of continuous prior creditable coverage.

♦ You must and did not have a break in coverage for more than 63 days.

Buying a Medigap policy that has a guaranteed issue right also means that a private insurance company cannot enforce the pre-existing waiting period.

5.   Guaranteed Issue Rights

Also called as Medigap protections, guaranteed issue rights are set guidelines of rights individuals have in specific scenarios that private Medigap insurance companies must meet to provide Medicare Supplement Policies.

Medigap insurance companies must meet the following:

√ They must sell the applicant a Medigap policy.

√ They must cover all of the applicant’s pre-existing health conditions.

√ They cannot charge a higher premium for a Medigap policy because of the applicant’s past or present health problems.

Guaranteed issue rights scenarios for individuals with pre-existing health conditions and disabilities:

√ The applicant is enrolled in a Medicare Advantage Plan, and the plan is leaving Medicare or stops giving care in the applicant’s area, or the applicant moves out of the plan’s service area.

√ The applicant was in an employer health plan that terminated coverage.

√ The applicant joined a Medicare Advantage plan when he or she first becomes eligible for Medicare at age 65 and leaves the program within one year.

√ If the applicant drops a Medigap policy to enroll and join in a Medicare Advantage plan for the first time and the applicant leaves within one year of

√ If the applicant leaves a plan because of failure to meet its obligations to the policyholder.

√ If the applicant’s Medigap insurance company goes bankrupt and the applicant loses coverage, or the Medigap policy coverage ends through no fault of the applicant’s own.

Additionally, the terminating or previous plan/insurer needs to provide written documentation as proof of coverage to the new plan.

6. I’m Confused. What is the Medicare Open Enrollment Period?

A common mistake that most fall into is considering a Medigap Open Enrollment Period the same as the Medicare Open Enrollment Period – this shouldn’t be the case, for the two events are different and separate from each other.

The Medicare Open Enrollment Period (Annual Election Period) occurs every October 15 to December 7 of each year. During this period, Medicare policyholders can switch to other Medicare insurance plans or sign up for additional coverage.

Medigap Open Enrollment Period

As a helpful reminder, have these in mind:

√ Medicare Open Enrollment Period: set period every year.

√ Medigap Open Enrollment Period: happens only once in a person’s lifetime.

Knowing the difference can save you the time and trouble of learning which benefits apply on each OEP.

7. Medigap for individuals under the age of 65

As mentioned above, several states that may allow private insurance companies to sell Medicare Supplements to individuals under the age of 65. It is suggested for applicants to consult with their licensed insurance agents regarding this matter.

Insurance Companies from these states are required to offer a Medigap plan to people under 65
California* Maryland Oklahoma Colorado
Massachusetts Oregon Connecticut Michigan
Pennsylvania Delaware Minnesota South Dakota
Florida Mississippi Tennessee Georgia
Missouri Texas Hawaii New Hampshire
Oklahoma Illinois New Jersey Vermont*
Louisiana New York Wisconsin Maine
North Carolina * A Medigap plan cannot be offered to people with End-Stage Renal Disease

Next: Learn how much Medigap Plans costs