Medicare Supplement (or ‘Medigap’) policies are provided by private insurance companies and can be purchased to help supplement the out-of-pocket costs (or ‘gaps’) in Original Medicare such as deductibles, copays, and coinsurance.
With the exception of a few specific circumstances, federal law does not require Medigap insurers to provide you coverage or provide immediate coverage for pre-existing conditions.
What is a Pre-Existing Condition?
A pre-existing condition is defined as a prior medical condition or illness for which you have received (or should have received) medical advice or treatment within a specific period before the effective date of a policy.
For Medigap policies, if your condition has been treated or diagnosed in the 6-month period leading up to the start date of your policy, it is considered a pre-existing condition.
When can Medigap plans delay coverage for Pre-existing Conditions?
An insurance company (i) can refuse to provide you coverage; and/or (ii) provide you coverage but refuse to cover out-of-pocket costs related to your pre-existing condition for the first 6 months of the policy (this is called the “pre-existing condition waiting period”).
While a Medigap policy will not cover your costs during the waiting period, Original Medicare will still cover the condition, but you will be responsible for any coinsurance or copayment. After the first 6 months, the Medigap policy will cover your pre-existing condition.
How can I avoid the Waiting Period?
It’s possible to avoid or shorten waiting periods for a pre-existing condition if you purchase Medigap policy:
1. During your Medicare Supplement Open Enrollment Period (MS-OEP)
The Medicare Supplement Open Enrollment Period (MS-OEP) is the 6-month period after you enroll in Part B. For most people this will happen when you turn 65, however, some people may delay enrollment into Part B while they are still working.
If you are buying a Medigap policy during your MS-OEP, you can avoid or shorten your pre-existing condition waiting period if you buy a Medigap policy and it replaces “creditable coverage” as long as:
- You had that coverage for over 6 months; and
- You did not have a break of more than 63 days between last having creditable coverage and buying a Medigap policy.
If you had less than 6 months of continuous creditable coverage, your pre-existing condition waiting period will be reduced by one-for-one for every single month you had creditable coverage prior to purchasing a Medigap. For example, if you had 4 months of creditable coverage before you buy a Medigap policy, your policy could only impose a 2-month waiting period (instead of the full 6 months).
In addition, during your MS-OEP, Medigap insurers (i) must sell you a policy without medical questions, (ii) cannot deny you coverage, and (iii) cannot charge you an additional premium for coverage because of your medical history. This is known as a ‘guaranteed issuance’.
Many forms of health insurance coverage will count as ‘creditable coverage’ for Medigap policies such as employer health insurance or individual ACA plans.
2. During a period when you have another ‘guaranteed issued right’ after your MS-OEP
If you buy a Medigap policy when you have a ‘guaranteed issue right’ after your MS-OEP (also called “Medigap protections”), the insurance company cannot use a pre-existing condition waiting period.
The most common situations where you have a guaranteed issue right include:
Moving Residence
- You are currently in a Medicare Advantage plan and you are moving residence to an area outside of the plan’s service area
- You have Original Medicare and a Medicare SELECT policy (a Medigap policy that has ‘network’ restrictions) and you move out of the Medicare SELECT policy’s service area
Trial Rights
- You sign up for a Medicare Advantage plan when you are first eligible for Medicare and you decide within the first 12 months that you want to switch back to Original Medicare
- You chose to enroll in Original Medicare when you were first eligible and purchased a Medigap policy, decide to switch a Medicare Advantage plan for the first time but change your mind with the first 12 months and switch back to Medigap
Termination of Current Coverage
- You are enrolled in a Medicare Advantage plan and the plan leaves Medicare or your service area
- Your Medigap insurance company goes bankrupt or ends your policy through no fault of your own
- You have Original Medicare as well as employer insurance (such as retiree insurance or COBRA) and you need to replace the employer insurance will be discontinued
- You terminate coverage with a Medicare Advantage plan or Medigap policy because the company has not followed the rules and/or misled you
Final Words
If you are thinking of purchasing a Medigap plan, private insurance companies can deny to cover you or refuse to cover your pre-existing coverage for up to a period of 6 months after your policy starts. You can reduce or avoid pre-existing coverage waiting periods is if you have more than 6 months ‘creditable coverage’ (if you are enrolling during your MS-OEP) or if you experience an event that gives you a ‘guaranteed issue right’.
At CoverRight, we’re here to help you find the right coverage that you deserve. Reach out today and start finding the best Medicare plan for you.
