What to Do If Your Medicare Supplement Insurance Plan Is Discontinued
When your insurance plan can drop you
Medicare Supplement (Medigap) insurance plans are offered by private insurance companies and can help you pay for out-of-pocket costs for services covered under Original Medicare. If you purchase a Medicare Supplement insurance plan at age 65, you might expect to enjoy its basic benefits for many years and even decades. However, you could be concerned that after you’ve had your plan for a number of years it might be canceled or discontinued. The good news is there are only three conditions under which your plan can drop you (provided you bought your plan after 1992).
- You stop paying your premiums.
- You provided false information on the application.
- The insurance company becomes bankrupt or insolvent.
Since you are guaranteed to be able to stay with the insurance plan (even if you develop a health problem), the plan is called “guaranteed renewable.“ However, if you bought a Medicare Supplement insurance plan before 1992, it may not be guaranteed renewable. This means that with the state’s approval, the insurance company could cancel your Medicare Supplement insurance plan. If the plan you bought before 1992 is canceled, you might have the right to buy another Medicare Supplement insurance plan.
What are guaranteed-issue rights?
Your right to buy a new Medicare Supplement insurance plan if your old one is canceled is called a “guaranteed-issue right.“ Guaranteed-issue rights protect you from medical underwriting and could be granted if your Medicare Supplement insurance plan ends through no fault of your own (for example). Medical underwriting is the process in which a health insurance company collects data on your health history and evaluates any past or current medical problems when making a decision about your application. Pre-existing conditions* could result in your being denied coverage or having to pay a higher premium for coverage. Your Medicare Supplement Open Enrollment Period and guaranteed-issue situations are two circumstances where the insurance company generally cannot use medical underwriting.
If you have guaranteed-issue rights because your Medicare Supplement insurance plan was discontinued, you have 63 calendar days from the date your coverage ends to find a new plan. There are up to 10 total Medicare Supplement plans available in most states, but you will only be able to choose one from up to six of them under guaranteed issue: Plans A, B, C**, F**, K, or L. You may buy your plan from any insurance company licensed in your state to sell Medicare Supplement – but not every plan is available in every location. You’ll want to keep copies of letters, notices, and emails that inform you that your plan is ending as proof that your coverage was terminated and that you’re eligible for guaranteed-issue rights.
The Medicare Supplement Open Enrollment Period is a time when you can apply to any Medicare Supplement insurance plan offered in your state and not worry about being turned down for pre-existing conditions*. This period lasts for six months and begins when you are 65 or older and enrolled in Medicare Part B.
*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.
**Medicare Supplement Plans C and F will not be sold to anyone who qualifies for Medicare on January 1, 2020 or later. If you already have Plan C or Plan F, you can keep it. You may be able to buy Plan C or Plan F if you qualify for Medicare by the end of 2019. A new high-deductible Plan G might be available in 2020.
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