Guaranteed Issue

When it comes to Medicare Supplements (Medigap plans), different states have different rules. Here we’ll be discussing the California guidelines for Guaranteed Issue.

Guaranteed Issue is a term used to describe when a health insurance policy is offered to applicants regardless of health status. An applicant may be denied if they don’t meet the requirements of Guaranteed Issue.

The guidelines for Guaranteed Issue of a Medicare Supplement are not the same as the guidelines surrounding your enrollment and eligibillity for Medicare Parts A and B. The enrollment periods can overlap, however.

An Open Enrollment period is a time during which you qualify for Guaranteed Issue. This means, during the Open Enrollment, you may enroll and be accepted into a Medicare Supplement Plan regardless of your health status.

Open Enrollment Periods for Medicare Supplements

In California, applicants qualify for a one-time Open Enrollment period when they first enroll in Medicare Part B (unless you are disabled; then you get another Open Enrollment period at age 65). Open Enrollment is during the first 6 months you are enrolled in Medicare Part B. During Open Enrollment, you automatically qualify for Guaranteed Issue.

Other Open Enrollment Triggers

The following situations also trigger a 6 month Open Enrollment period granting you Guaranteed Issue into a Medicare Supplement:

• The loss of employer coverage, or the loss of eligibility of such coverage due to divorce or a spouse’s death.
• The loss of military retiree coverage due to reasons such as change of residence or the closing of a base.
• Loss of a Medicare Supplement due to change of residence to a location not served by the plan.
• The loss of Medicaid eligibility due to increased income.

The California Birthday Rule

In addition to the initial 6 month Open Enrollment period, California residents are granted an annual one month Open Enrollment Period each year during their birthday month.

The Birthday Rule only applies to individuals already enrolled in a Medicare Supplement, and allows them Guaranteed Issue into a Supplement with equal or lesser benefits.

Other Qualifying Events that Trigger Guaranteed Issue

Applications must be received 123 days after the following events (proof of such events may be required):

• An applicant loses or drops employer coverage.
• Your existing Medicare Advantage Plan stops coverage in your area, or you move out of the area.
• The plan you are enrolled in violates the insurance contract or was misrepresented in marketing.
• Your Medicare Supplement was involuntarily terminated.
• You dropped out of a Medicare Supplement Plan to enroll in a Medicare Advantage plan, and dropped that plan within two years.
• You enrolled in a Medicare Advantage Plan when first eligible for Medicare, and dropped the plan within two years.
• Your Medicare Advantage Plan reduces benefits or discontinues your providers (for reasons other than good cause).

To enroll in a Medicare Supplement, your Medicare Advantage Plan must be terminated on or before the effective date of the Supplement. You may only leave a Medicare Advantage Plan during a valid enrollment or election period for Medicare Advantage Plans.

The above information may not be complete, and applies to plan year 2011. For questions, or more complete information, call 1-800-MEDICARE

Or Contact:

Pamela Cook
CA Insurance 0G04182
Toll Free 1-888-520-8683