Medicare Supplement Insurance Plans and Coverage of Pre-Existing Conditions
You might be concerned about applying for Medicare Supplement insurance plan if you have a pre-existing health condition*. Will the plan accept you? Will they charge you more? Will your condition be covered?
Pre-existing conditions are very common. According to analysis from the Department of Health and Human Services, up to 50% of non-elderly Americans have some type of pre-existing health condition. The Centers for Medicare and Medicaid Services defines pre-existing conditions as a condition (such as an illness or injury) that you had before you joined the health plan. Conditions could include cancer, heart disease, diabetes and asthma, for example.
When a pre-existing condition can’t be used against you
Medical underwriting is the process in which insurers consider health history (including pre-existing conditions) when making judgements on who is accepted into a health-care plan and how much they will pay. Medicare Supplement insurance plans are sold by private health insurance companies which usually are allowed to use medical underwriting when evaluating insurance applications. One period in which insurers cannot use medical underwriting when considering your application is during your Medicare Supplement Open Enrollment Period. This period lasts for six months and begins on first day of month in which you’re both 65 or older and enrolled in Medicare Part B. During your Medicare Supplement Open Enrollment Period, an insurance company can’t refuse to sell you a policy based on your pre-existing condition and it can’t charge you more than someone without health problems. After your Open Enrollment Period ends, you may be subject to medical underwriting.
The pre-existing condition waiting period
Generally, if you enroll in a Medicare Supplement insurance plan during your Medicare Supplement Open Enrollment Period, the insurance company can’t make you wait for your coverage to start. However, sometimes you may be subjected to a “pre-existing condition waiting period.“ This means that you may have to pay all your own out-of-pocket costs for your pre-existing condition for up to six months. After the waiting period, the Medicare Supplement insurance plan may cover Medicare out-of-pocket costs relating to the pre-existing condition.
You might be able to avoid or shorten the pre-existing condition waiting period if you had at least six months of creditable coverage before applying for the Medicare Supplement insurance plan. Creditable coverage could be individual health insurance, group health insurance (such as from an employer), TRICARE (military retiree benefits), and more. If you’re replacing your creditable coverage with a Medicare Supplement insurance plan, the insurance company generally can’t make you wait before it covers your pre-existing conditions.
Original Medicare (Part A and Part B) doesn’t have the same waiting period that some Medicare Supplement insurance plans have. Original Medicare may cover a condition even when your Medicare Supplement insurance plan won’t, but you might be responsible for a coinsurance or copayment.
What might not be covered
All Medicare Supplement insurance plans cover Medicare Part A (hospital insurance) coinsurance for up to 365 days after Medicare benefits are used up. If you are in a pre-existing condition waiting period and you are hospitalized for a car accident, which is not a pre-existing condition for you, your Medicare Supplement insurance plan may cover your hospital coinsurance. However, for example, if you are in a pre-existing condition waiting period and you are hospitalized for an asthma-related health problem and asthma is a pre-existing condition for you, you may have to pay your hospital coinsurance out-of-pocket. Original Medicare may still pay a portion of your hospital costs.
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*Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions.