Open enrollment vs. Guaranteed Issue

October 6, 2021

Whether you’ve already decided on a Medicare Supplement Insurance policy or you’re still weighing your options, you need to know when is the right time to purchase your plan. There are a few key things you need to know before it’s time to enroll in Medicare Supplement Insurance.

Medicare Supplement Open Enrollment

Every Medicare recipient has what’s known as a Medicare Supplement Open Enrollment Period. This lasts for six months, starting the month after you’re 1) at least 65 years old AND 2) enrolled in Medicare Part B. 

Note: Because the start of this six-month period requires you to already be enrolled in Part B, the timing will differ from your Medicare Initial Enrollment Period (IEP), which begins three months before your 65th birthday.

During your Medicare Supplement Open Enrollment Period, you’re able to purchase any Medigap policy that’s available in your state. 

The benefits of buying a Medigap plan during open enrollment are two-fold. Not only are insurance companies obligated to sell you any policy that’s available in your state, but they also must charge you the standard rate. That means providers can’t charge you more based on your age or a pre-existing condition.

Not everyone chooses the right Medigap plan on the first attempt. That’s ok! If you want to make a change, you can apply for a new plan at any point during the year. However, if this occurs outside your open enrollment period, you will have to answer health questions to qualify for coverage.

Guaranteed Issue right for Medicare Supplement Insurance

In certain situations, you may qualify for what’s known as a Guaranteed Issue right. Thus ensures that you can get the health care coverage you need at the cheapest rate. 

When your guaranteed issue rights are in effect, providers have to:

  • Sell you a Medigap plan
  • Cover your pre-existing health issues, no matter what they are.
  • Charge you the standard Medigap plan rate, even if you have pre-existing conditions.

Guaranteed Issue rights apply to several situations, some of which include:

  • You have both Medicare and an employer-sponsored group health plan, and the latter is ending.
  • You purchased a Medicare Advantage Plan that’s leaving Medicare or stops covering your area.
  • You stopped your Medigap policy to switch to a Medicare Advantage Plan, less than a year has passed, and you want to switch back to Original Medicare and Medigap.
  • Your Medicare Supplement Insurance company goes bankrupt or otherwise stops your coverage at no fault of your own.

Can you purchase Medicare Supplement Insurance at other times?

Yes. If you don’t have an open enrollment period or guaranteed issue rights, insurance companies may use medical underwriting to determine whether to take your application or grant you a policy.

Different Medicare Supplement Insurance carriers have different underwriting standards. If you are denied coverage by one carrier, you may still be eligible for coverage with a different one. This is a situation where having an independent insurance agent is critical. They can help you apply for coverage with a variety of Medigap insurance carriers.

For some retirees, it’s worth the effort to purchase a Medigap policy after the open enrollment period and outside of any special conditions. If you’re faced with this decision, take the time to compare the premium costs with your anticipated medical bills. With this calculation in hand, you can make the right choice for your budget, health care needs, and peace of mind.

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