What is Medicare Supplement Plan Underwriting?

What is Medicare Supplement Plan Underwriting? text overlaying image of a stethoscope laying on a blue table Medical underwriting is a process health insurance companies use to decide how risky you are to insure and how much your premium should be. If you’re eligible for Medicare and want to also add a Medicare Supplement Plan to your Original Medicare coverage, the private insurance company you choose may require you to go through underwriting before you can buy your policy.

 

Underwriting can be complicated, and each insurance company handles it differently. To help you understand we will go into detail about why companies underwrite, how it works, and when it applies. We’ll also talk about health conditions that will get your application turned down so you know what steps to take if you are.

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Underwriting Basics

Underwriting is how insurance companies find out about your health and decide if they want to take on the financial risk of insuring you. It requires a thorough look at your health history, both on the application and in a follow-up phone interview. If a company thinks you have too many expensive health problems, they can refuse to cover you, limit your coverage, or raise your rates.

 

Insurance companies underwrite people to keep premiums and risks as low as possible and maintain stability. However, limiting access to Medicare Supplement Plans could mean that the people who need the extra coverage the most don’t get it. Logically, if a company takes on more people with expensive health problems, it will have to pay out more money for claims. To make up for the difference, the insurance company would either charge higher premiums or not let those people on the policy at all.

 

The federal government sets standards for the different types of Medicare Supplement plans and gives enrollees some protections in the form of guaranteed issue (GI) rights, but they have no control over how insurance companies decide who to accept as a customer. Carriers don’t always agree on what makes an applicant uninsurable.

What Triggers An Underwriting Process

If you want to switch from one Medicare Supplement Plan to another, or switch from Medicare Advantage to Original Medicare and you’re not eligible for IEP, then you’ll trigger the underwriting process. You’ll have to answer a lot of questions about your health. The insurance company can also send you to a doctor or nurse for a medical exam to get a better picture of your current health.

 

You can change from one Medicare Supplement Plan to another any time of year, but you’ll have to be in good enough health to pass underwriting. To return from a Medicare Advantage (MA) plan to Original Medicare with a Medicare Supplement Plan, you’ll have to wait until the Medicare Annual Enrollment Period, from October 15 to December 7, and pass underwriting.

Underwriting Timeline

Underwriting takes time, so we recommend sending in applications two to three weeks before the date you want the policy to start. This will give the underwriter time to look over the application and talk to you on the phone. We’ve found that the underwriting process takes, on average, between seven and ten days, but it could take as little as one day or as long as thirty days. If underwriting takes longer than expected and your application doesn’t start on the first of the month you asked for, the insurance company will either backdate it to the original start date or move it to the first of the next month automatically. If this happens, you should check in with the carrier in case you need the original start date, but the carrier automatically moves it to the next month.

 

Some companies have started using an auto-accept or auto-reject feature in their online applications, but this only works for clear-cut cases where there is no room for confusion. To get an automatic acceptance, an applicant would have to say “no” to every health question and be in great health. Applicants whose answers lead to a “maybe” will have to talk to an underwriter over the phone for further explanation and complete the underwriting process.

How Underwriting Affects Your Premiums

Depending on the carrier, the results of underwriting can cause premiums to increase. Some companies have less strict rules for underwriting, which means they accept applicants with worse health conditions but raise the premium to make up for it. Applicants with more health problems may be put in another pricing tier called “class” or “level.” Companies use this system to try to find a good balance between keeping premiums from going up too much and giving a lot of people access to the policy.

What Conditions Can I Be Denied For?

Companies that offer Medicare Supplement insurance are more likely to charge you a higher premium than to turn down your policy. However, they can still turn down your application. No matter which company you choose, you may not be able to get Medicare Supplement insurance if you have a certain health condition.

 

Some medical conditions that often lead to a denial are:

 

  • AIDS
  • Activities of daily living assistance
  • Alzheimer’s
  • Atrial fibrillation
  • Any history of cancer
  • Cirrhosis
  • Certain cognitive conditions
  • Certain medications
  • COPD
  • Congestive Heart Failure
  • Diabetes not under control with medications
  • End Stage Renal Disease
  • Heart attack
  • Implantable cardiac defibrillator
  • Kidney failure
  • Multiple Sclerosis
  • Nebulizer use
  • Parkinson’s disease
  • Organ transplant
  • Osteoporosis
  • Supplemental oxygen use
  • Stroke

It’s important to remember that each company has its own rules for underwriting. If one company turns down your application, another may be willing to take on the risk. Working with one of our licensed insurance agents can help you find a “guaranteed issue” policy or a company that will accept your application even if you have health problems.

 

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How To Avoid The Underwriting Process

During certain times when you have guaranteed issue (GI) rights, you will be able to sign up for a Medicare Supplement Plan without having to go through underwriting. During a GI period, insurance companies must sell you a policy without considering your health or any pre-existing conditions. Your Initial Enrollment Period (IEP) is the first seven months after you turn 65, this is when you can sign up for Original Medicare without being penalized. 

 

Your Medicare Open Enrollment Period (OEP) is usually part of your Initial Enrollment Period (IEP). This is when you have a GI right to sign up for a Medicare Supplement Plan. The OEP starts on the first day of the month that you start getting Medicare Part B. It lasts for six months, during which time you can sign up for any Medicare Supplement Plan letter with any insurance company, no matter how healthy you are.

 

In rare cases, you may be eligible for a Special Enrollment Period, which also gives you the right to a Guaranteed Issue, where you can change your policy without having to go through the trouble of underwriting. There are also parts of the underwriting process you can avoid such as the medical exam. Some states let you change your Medicare Supplement plan without having to go through a medical exam:

 

California

You can switch plans around the time of your birthday during a 91-day Open Enrollment Period because of a rule called the “birthday rule.”

Connecticut

Guaranteed Issue is always the case with Medicare Supplement plans in Connecticut. In this state, you have to use community rating methods. But Connecticut is one of the states where Medicare Supplement costs the most.

Idaho

Idaho has a rule that starts on your birthday and lasts for 63 days to sign up for Medicare Supplement Plans.

Illinois

The Illinois birthday rule is a bit more complicated. Only Medicare Supplement policyholders in a certain age group can use it for 45 days.

Louisiana

In Louisiana, the birthday rule gives people 93 days to sign up for Medicare Supplement Plans.

Maine

Beneficiaries in Maine can switch to plans with the same or less benefits during the month of June without having to go through an underwriting process.

Missouri

There is an anniversary rule that lets people change companies without having to go through underwriting for 62 days. Instead of your birthday, the time is based on the date of the policy.

New York

New York Medicare Supplement is expensive, but you can get a policy that covers you no matter what.

Oregon

Oregon has the “birthday rule,” which says that you have 30 days after your birthday each year to change your Medicare Supplement plan.

Vermont

Some Vermont private insurance companies don’t ask about health at all times of the year.

Washington

beneficiaries in Washington state can switch from one policy to another at any time (except for Plan A).

Does Medicare Use Underwriting?

Original Medicare doesn’t use underwriting. The federal government gives this insurance to people over 65 or who have been on Social Security disability for at least 24 months. Underwriting is not used for Medicare Advantage plans or Medicare Part D drug plans. Anyone can sign up for these insurance plans. Keep in mind you can’t have both a Medicare Advantage plan and a Medicare Supplement plan at the same time.

Comparing Plans With EZ

When looking for a Medicare Supplement Plan, it’s important to compare the costs and benefits of each one. That means you’ll have to do a lot of research, which can take a long time since you’ll have to call numerous insurance companies to – receive price quotes.  But if you work with an agent from EZ, you can compare prices in half the time. Working with a licensed agent gives you access to many Medicare Supplement Plan carriers and plans in one place. 

In addition to giving you price comparisons, your agent can tell you how each plan is different. Also, your agent can help you compare out-of-pocket costs with premium costs to figure out which plan will save you the most money over time. Call us today at 877-670-3602 to start looking for a Medicare Supplement Plan. 

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Can Medicare Deny My Claims?

Medicare processes millions of claims each year, and some of them get denied. There can be any number of reasons why claims are denied, ranging from issues with billing codes to not meeting eligibility requirements. People make mistakes so billing errors can also happen.  In these cases,  beneficiaries can appeal the decision, or resubmit the claim. In order to avoid paying out-of-pocket unnecessarily, you should know the reasons why claims are denied and how to go about appealing denials. 

Why Claims Can Get Denied

computer screen with codes on it.
Your healthcare provider’s staff can make a mistake and put in the incorrect billing code.

There are numerous reasons that a Medicare claim can get denied. These include:

  • Billing Errors– Your healthcare provider’s staff can make a mistake and put in the incorrect billing code for a service you have received. When this happens, medicare will deny the claim. For example, the “Welcome To Medicare” visit is covered 100%, but if the code put in reflects a normal visit, and not a covered wellness visit, then you will receive a bill in the mail.
  • Lack of Medical Necessity–  Medicare requires doctors to provide proof that each service they provide is medically necessary. If Medicare does not deem a service necessary, then it will not cover the service. There may be  times when a doctor will consider a service necessary for the patient’s needs, but Medicare might disagree and deny the claim. For example, a doctor may feel that blood work is necessary at a patient’s “Welcome To Medicare” visit. This service, however, is not generally covered by Medicare at this visit and so the claim will be denied.
  • Coordination Of Benefits– If a beneficiary has both an employer-based health plan and Medicare, then coordination of benefits is the process that determines which plan has the payment responsibility. Depending on the size of your employer, that plan will usually be the primary payer and Medicare will usually be the secondary payer. When you stop working or decide to drop your employer’s insurance, Medicare needs to be notified of the change. If Medicare is not notified by your employer, then Medicare will continue to be  considered the secondary payer. Under these circumstances, any services you have that are billed to Medicare will be denied because they will still be considered the secondary payer.

Appealing A Medical Claim Denialhand with a pen in it writing down on a piece of paper.

Denials for services that you feel should’ve been approved can be appealed. There are various legitimate reasons for  appeal, such as billing mistakes. But there are limits on how long you have to file an appeal as well as procedures for how to file correctly. 

When you get denied for a claim, you will receive a Medicare Summary Notice (MSN) listing the denied claim/s. You need to file your appeal within 120 days of receiving the MSN. First, you must circle the item that you are appealing on the MSN and then explain why you think it should be covered. Include any additional information supporting your appeal, including any supporting information  from your doctor.

If your Medicare claim is denied, don’t panic. It could be a simple billing error. However, if you find you are receiving denials for services, make sure you are asking your healthcare provider about coverage at each visit. Your provider should be able to tell you what is covered and what is not and, if they can’t, they will need to provide you with an Advantage Beneficiary Notice of Noncoverage (ABN). This notice informs you that Medicare might not cover the claim, and if you agree to have services, then you agree to pay the non-covered charges. You then have the choice to either sign and receive the service or decline the service. 

You can also call Medicare before receiving services to make sure they will be covered. And, if you do end up receiving a denial, you can always appeal it with supporting information. The more you know about how Medicare makes its decisions about coverage, the more likely you are to get the most out of your plan.

How Medicaid & Medicare Are Different

Medicare and Medicaid are two government-run health care programs. The two programs sound similar, but they are far from it. They serve different people, and are both operated and funded by different parts within the government. It’s easy to confuse the two; they even sound similar, but there are different requirements for each program, and who they cover.

This is a big decision, so make sure you talk it over with family and trusted advisors!

Medicare

Medicare is a federal insurance program that provides health coverage for people 65 and older. It is not based on income, and it is not free. In order to be eligible for Medicare, you must meet some requirements:

  • You must be 65 and older.
  • You must have worked and paid at least 40 qualifying quarters, or 10 years, of Medicare taxes to receive Medicare Part A.
  • You must be a U.S. citizen.

Medicare Part A covers hospitalization, and is free as long as you have paid 10 years of necessary Medicare taxes. Medicare Part B covers doctor visits and outpatient care. 

Medicare will cover 80% of your Part B expenses, leaving you with 20% to pay out of pocket. If the expenses get to be too much to budget, you can look into additional coverage to pay for the 20%, such as Medicare Supplement plans. These plans vary by premium, deductible, and coverage. Additionally, they are helpful to those who travel, as some cover international health care costs.

Medicaid

Medicaid is a government assistance program that is available in every state and is for individuals and families with low income. The income must be below 100% of the poverty line. Medicaid is typically free since most people receiving it have little to no assets. In rare cases, individuals are expected to copay. 

poverty level graph for medicare and medicaid
Poverty levels dictate how many people are eligible.

Medicaid covers:

  •  Hospitalizations
  •  home health care
  •  doctor visits
  •  labs
  • x-rays
  • preventive services
  • maternity and pediatric services

It will cover individuals and families, and if you have a disability, you might be eligible.

The Differences

Eligibility:

Medicare is typically for seniors 65 and older, and cannot be used for families. Medicaid is based on income, while Medicare is based on age and how many years you paid taxes in the U.S. while working. 

Enrollment:

 In order to enroll into Medicare, you must be within 3 months of your 65th birthday, and 3 months after your 65th birthday. It totals to 7 months when you include your birthday month. Medicare’s annual enrollment is from October 15 to December 7 and is when you can make changes to your plan.

Medicaid does not have an open enrollment period, you can just sign up anytime you are eligible (meaning below the poverty line).

Options:

woman happy with both Medicare and Medicaid
Your health and happiness are priorities. Talk with our experts if you have any questions!

Medicare has many options you can choose from. For example, you can choose a Supplement plan to help pay for Part B expenses. There are about 10 different Supplement Plans to choose from, making it easier to cover more of what you need, and gives you more control of how much you spend. There are different premiums, out-of-pocket costs, and deductibles for each plan. 

Medicaid, on the other hand, has very few options to choose from.

If you are in the market for a Medicare Supplement plan, we can help. EZ.Insure has trained agents in the industry that will provide you with quotes on all the different plans, and which suits your needs and budget mist. The agent will go over each plan, and even sign you up when you are ready- for free. We can help you get started when you are ready to sign up for Medicare, or just have questions on how to save money, or how to get more coverage. To get started, contact an agent at 888-350-1890, or email us at [email protected]. You can also get instant quotes by entering your zip code in the bar above, it’s that simple. No hassle, no obligation.

Is Medicare Underwriting Necessary?

Medical underwriting is a process when a private insurance company reviews your medical history to determine whether they will provide you with coverage, how much to charge you, and whether to set a waiting period before coverage begins. If you have a lot of medical issues, you may have to pay more for coverage or even be denied approval. Pre-existing conditions will come up and can cost you greatly.

denied word in red
After your Medicare underwriting is complete, companies decide whether to accept you, or deny you coverage due to your pre-existing conditions.

Medicare Supplement plans help pay for out of pocket expenses such as copays, coinsurance, and deductibles. When

 you sign up for a Medicare Supplement plan, you may need to go through the underwriting process. It all depends on when you decide to sign up for a supplement plan. To answer the question if Medicare underwriting is necessary, both yes and no. Find out how to avoid Medicare underwriting, and if you do have to go through it, then what it entails. 

The Only Time To Avoid Medicare Underwriting

During the Medicare Supplement Open Enrollment Period is when you have “guaranteed issue rights.” Guaranteed issue means that you will be accepted into any plan regardless of your health condition or pre-existing conditions. During this time, you have a one-time guarantee when companies cannot deny you or charge you more due to a pre-existing condition. The Medicare Supplement Open Enrollment Period is a six month period that begins the first day of the month you turn 65 years old, and enrolled in Medicare Part B.

When You Need To Be Underwritten

If you apply for a Medicare Supplement plan after your Medicare Open Enrollment Period has passed, then you may have to go through the underwriting process. In addition, when you are switching Medicare Supplement plans, you may have to go through the underwriting process. If a Medicare Supplement plan accepts your application, the insurer can choose to make you wait 6 months before covering a pre-existing condition. This is known as a “look-back period,” or “pre-existing wait period.”

The Underwriting Process

Private insurance companies will have extensive health-related questions on their applications. It will go over your entire medical history, both past and present. If you have a pre-existing health condition that may be expensive for the company to cover, they can choose to deny your application.

white paper that says checklist with boxes down a line with checkmarks in them.
During the Medicare underwriting process, companies will go through your medical history and check off which conditions may be considered an expensive health risk for them to cover.

If you have a health condition that needs constant attention, chronic, or incurable, then you may be denied. Certain medications can also be a reason for denial, especially for the incurable or chronic health conditions, simply because it will be too expensive for the insurers to cover. Often times minor conditions such as BMI, high blood pressure, and cholesterol are not issues for carriers. If you have pending surgeries or treatments, then it is best to get them done before applying. Serious health conditions such as rheumatoid arthritis, dementia, chronic lung disorders, lupus, MS, major heart disorders, and kidney failure will be an automatic denial of coverage for the company.

If you are still within your Medicare Supplement Plan Open Enrollment Period, then great, no better time to get started and sign up for a plan. If you have passed this guaranteed issue window, you can still apply with caution. And if you get denied, then it is not the end of the world, our agents will search through all available Medicare Supplement plans and help you.

EZ.Insure has highly trained agents who will search through all the Medicare Supplement carriers in your region, whether you are within the open enrollment period or not. Your personalized agent will compare all the plans, their coverage, and their quotes. To get started, you can enter your zip code in the bar above, or speak to an agent directly by emailing [email protected] or calling 855-220-1144. We will be by your side throughout the process, walking you through it, while providing you with the best advice and options.

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