What does Medicare Guaranteed Issue mean for Medicare/Medigap coverage?

 Hi, my name is Mitch Winstead from Allstar Senior Benefits.  We are a Brokerage for Medicare products, final expense as well as cancer, short-term care, and long-term care policies. I hope you enjoy reading this article.  If you have any questions, we offer free advice and there are no obligations. Our toll-free number is 866-598-8170 or 910-538-4547.

I talk to people frequently about not going on their Part B of Medicare if they are still working. What does Medicare guaranteed issue mean?  If you want a Medicare Supplement and you go into your age 65 open enrollment period, I feel it’s a mistake.  I would not advise you to go on your part B of Medicare until you are ready to retire from work if you are on your employer’s medical plan. Here is a reason why you should not go on your Part B yet.

If you go on your Part B  at 65 and want to sign up for a Medicare Supplement you will have to answer all the health questions on the Medicare Supplement application. This is also referred to as underwriting. There are several health questions on the application. You have to answer no to ALL the questions. If you have major health problems you are not going to qualify for a Medicare Supplement.  If you choose to wait until you retire or stop working and go into your open enrollment period then your options are more open in my opinion. This means you can wait until you are age 67 or 68…… and then go on open enrollment.

Open enrollment means you do not have to answer ANY health questions on a Medicare supplement application. This is usually for people that are turning 65 and aging into Medicare. But you can wait until you have retired or stopped working to decide that you want to sign up for Part B of Medicare. This means you have more time sign up for a Medicare supplement and not answer any health questions on the application and you qualify very easily.  How much time do you have on open enrollment in this case? Usually, 6 months after your Part B becomes active. So this can get kind of confusing if you have any questions please call our office today. Toll-free at 1-866- 598- 8170 or  910-538-4547. Our email us at Mitch@allstarseniorbenefits.com. We have been helping people for over 34 years with not only Medicare Supplements but life insurance, final expense, cancer policies, and long-term care.  We will be glad to answer all your questions and if you want to enroll in a Medicare Supplement at that time we can do that in as little as 5 minutes.

Now you can make the argument that “Okay I’m going to go on Part B of Medicare at 65 years old and still continue working while getting my medical coverage from my employer.  You can certainly do that if you want to but if you are getting group benefits for your medical coverage at work then it’s going to be a disadvantage for you. Whenever you stop working and want to get a Medicare Supplement, here is what happens.

If you have major health conditions and take a lot of medicines, you may not be able to enroll because of health questions on the application. If you go on your Part B and are still working and receive benefits from your employer that covers your medical insurance. Your employer can drop you from their plan- this can happen.  For example, you’re now age 67 and take medicines and have some major medical problems and you call an insurance agent for Medicare Supplement. Most of the time they’re going to ask you did you go on your Part B of Medicare yet? If your answer is yes things just got more complicated.

However, you may be able to go on something that’s called Guaranteed Issue. So let’s discuss the definition of Guaranteed Issue. A guaranteed issue right means an insurance company can’t refuse to sell you a Medigap policy under certain situations. Here is a scenario that most likely triggers a guaranteed issue situation.  You have already decided to go on your age 65 open enrollment period. You are getting your medical coverage from your employer. You are 67 years old and your employer forces you out of their health plan. Now you can be eligible for guaranteed issue. Here are some “rules” on guaranteed issue. They must cover all your pre-existing conditions. They can’t charge you more for a Medigap policy because of your past or present health problems. You have a guaranteed issue right when you have other health care coverage that changes in some way, like when you lose other health care coverage. In other cases, you have a “trial right” to try a Medicare Advantage Plan (Part C) and still buy a Medigap policy if you change your mind.  

Here is a more thorough explanation.   You are in a Medicare Advantage Plan, and your plan is leaving Medicare or stops providing care in your area, or you move out of the plan service area.

You have original Medicare and your employer Group Health Plan including retiree or (Cobra) coverage or Union coverage that pays after Medicare pays and that plan is ending.    

You have Regional Medicare and a Medicare select policy. You move out of the Medicare select policy service area.     

You join a Medicare Advantage plan or programs of all-inclusive care for the elderly better known as (PACE) when you were first eligible for Medicare part A at 65, and within the first year joining you decide you want to switch to original Medicare this is another “trial right”.  

You dropped a Medigap policy to join a Medicare Advantage Plan for to switch to a Medicare select policy for the first time, you’ve been in the plan less than a year and you want to switch back another “trial right”.  

Your Medicare insurance company goes bankrupt and you lose your coverage or your Medigap policy coverage otherwise ends through no fault of your own.  

You leave a Medicare Advantage plan or drop a Medigap policy because the company hasn’t followed the rules or has misled you. You also have a “trial right” to try a Medicare Advantage   

All of these scenarios let you return to original Medicare and purchase a Medicare Supplement.

At the time of this writing in the state of NC, here are the plans available under your “trial right” if you change your mind and want to get a Medicare Supplement.  Plans: A, B, C, F, K, or L. Do you notice what plans are missing? Answer : Plan D, Plan G, and Plan N. If you are in a guaranteed issue situation, you limit your choices to the above plans and you don’t get a choice if you want Plan G, or Plan N. The Plan G and Plan N are the most economical solutions for a Medicare supplement, especially the Plan G.  Not to confuse things any more but the Plan F and plan C are not going to be available to new Medicare enrollees in the year 2020. I want to reiterate my point it’s best to wait in my opinion to go on your open enrollment period if you’re working past 65. To show proof that you have had medical coverage from your employer you must get a letter from the human resources department to qualify for guaranteed issue.

 

Here is one of my definitions again on what Guaranteed Issue means if you are past your open enrollment of Medicare.  You can apply for a Medicare Supplement policy and you do not have to answer any health questions. However, you are now limited to which plan you get to choose. You no longer have a choice of which Medicare Supplement plan to go on. The Federal government and/or State will tell you there are only a few plans available for you since you are on Guaranteed Issue. So let’s take an example. If you want it to sign up for a Plan G Medicare Supplement at the time of this writing. You cannot do that, you have to get a plan A, B, C, F, K or L, Medicare Supplement.  

Why? Because you are now under the rules of a guaranteed issue policy. Now you are stuck with taking a higher-cost plan and the plan that you could not pick out and have your “freedom” to choose because of the guaranteed issue situation you are in. That’s why it is so much better to wait to go on your Part B whenever you quit working and conserve your open enrollment. Some words of caution. If you delay your open enrollment at age 65 and are NOT receiving any medical benefits from your employer then you will be penalized by Medicare for NOT taking your Part B at 65.

 

One point of emphasis regarding qualifying for guaranteed issue  I would like to make. This happened to some clients I knew, The husband’s coverage changed. The company he worked for stopped their current plan on retirees.  They offered him a plan that was not as good as the one he had. He could not go back to his original plan he once had and by the way, his wife was one his plan also.  So the company reduced benefits and gave him a choice. Take the reduced benefit plan or drop the company plan. Then they mentioned if you drop the company plan, you can get a private plan such as a Medicare Supplement.  So here is where it gets tricky. The company was not forcing him out of their benefits-they gave him an alternative plan with reduced benefits. So he was not getting forced out of his benefits. I said all of that to say this.  In order for him to qualify for guaranteed issue, the company has to “force” a person out of a plan by not offering a plan at all.

Therefore he could not qualify for guaranteed issue and he had major health problems and he already went on his Part B open enrollment. He had a lot of trouble finding a company to accept him due to his health.  Also guess what, he had to pay a lot of money for his Medicare Supplement with a company that has rate increases 2 times a year.

I understand that we don’t have a crystal ball.  Nowadays, most companies are not giving retirees anything anymore.  There is no company retirement plan, there is no health plan. It is not fair that the company did this to him.  You are almost better now to keep everything you can regarding life and health insurance in your control and not in your employer’s control so that they can do as they please with your insurance or retirement.

This topic is confusing.  It is best to consult a qualified Medicare Supplement brokerage like Allstar Senior Benefits.  Our toll-free number is 1-866-598-8170 or 910-538-4547 or 910-452-1922. You may email us at Mitch@allstarseniorbenefits.com.  Our website is www.allstarseniorbenefits.com.  We have a facebook page www.facebook.com/medsuppguru.   All of our policies and plans are state regulated and state approved. If you would like a quote with no obligations, please click this link https://allstarseniorbenefits.com/get-a-quote/#.W60lbGhKhPY

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