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Medigap underwriting loophole?
Old 12-17-2019, 11:12 AM   #1
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Medigap underwriting loophole?

I've seen a number of discussions lately on the forum about Medigap insurers "closing the books" and implementing large rate increases on policy holders going forward. Those policy holders may then be trapped and unable to pass the underwriting requirements to move to another carrier.

However, even if your health has taken a turn for the worse and you can't get through underwriting, is there a one-time loophole that will allow you to purchase a new Medigap policy under your guaranteed issue right? Note the following from Medicare.gov:


Quote:
You have a guaranteed issue right (which means an insurance company can’t refuse to sell you a Medigap policy) in these situations:

- You dropped a Medigap policy to join a Medicare Advantage Plan (or 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. (Trial Right)

You have the right to buy:

- The Medigap policy you had before you joined the Medicare Advantage Plan or Medicare SELECTpolicy, if the same insurance company you had before still sells it.

-If your former Medigap policy isn't available, you can buy a Medigap Plan A, B, C, F, K, or L that’s sold by any insurance company in your state

You can/must apply for a Medigap policy:

As early as 60 calendar days before the date your coverage will end
No later than 63 calendar days after your coverage ends
This strategy would require one to switch from a "closed book" Medigap policy to a Medicare Advantage plan, then during the 12 month trial period go back to a Medigap plan. It would also depend on the "closed book" company no longer selling policies in your state, allowing you to choose another (lower cost) insurer.

MBSC, is this a viable strategy?
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Old 12-17-2019, 11:24 AM   #2
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It would seem so. In fact even if your old issuer still sells policies in your state because it is a closed book it would not be "The Medigap policy you had before" you joined MA.

One impediment is that I think you have to go through underwriting for MA as well as Medigap if you are not in your initial enrollment period... so that may make what you are thinking as unviable.

The other issue that I see is that Plan G is not included in the list of plans that you can buy and Plan G is one of the most popular plans.

You might call Boomer Benefits and see what they say.
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Old 12-17-2019, 11:37 AM   #3
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Also, some states have a "birthday rule" or an "anniversary rule".

In MO we have an "anniversary rule". As I read it, on the anniversary of my enrollment each year I can change providers, with the same letter coverage, with no underwriting.

DW will be signing up soon for a plan G policy, and I intend to ask Via Benefits how this will work.
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Old 12-17-2019, 11:51 AM   #4
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Also, some states have a "birthday rule" or an "anniversary rule".

In MO we have an "anniversary rule". As I read it, on the anniversary of my enrollment each year I can change providers, with the same letter coverage, with no underwriting.

DW will be signing up soon for a plan G policy, and I intend to ask Via Benefits how this will work.
California similar rule. I plan on changing from Plan F to Plan G, AARP/United Health Care. Requires, underwriting. But, on Birthday + 29 days, no underwriting.
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Old 12-17-2019, 12:27 PM   #5
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Quote:
Originally Posted by pb4uski View Post

One impediment is that I think you have to go through underwriting for MA as well as Medigap if you are not in your initial enrollment period... so that may make what you are thinking as unviable.
According to Medicare.gov there is only one pre-existing condition that will prevent you from switching to MA:

Quote:
You can join a Medicare Advantage Plan even if you have a pre-existing condition , except for End-Stage Renal Disease (ESRD)
Quote:
Originally Posted by pb4uski View Post
The other issue that I see is that Plan G is not included in the list of plans that you can buy and Plan G is one of the most popular plans.
My guess is that list is currently accurate but will be updated to delete Plan F and replace it with Plan G effective 1/1/2020.
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Old 12-17-2019, 12:30 PM   #6
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Then in that case it looks like it might work. I'd bounce the idea off of Boomer Benefits.

If it is viable, I wonder how long one would have to be on a MA plan... would a month suffice? a week?
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Old 12-17-2019, 12:38 PM   #7
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I'm interested in hearing what MBSC has to say about the strategy. If it is viable I don't want to advertise it to BB with a call and increase the possibility the govt will shut it down.

(You 2,000+ folks reading this...mum's the word. )
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Old 12-17-2019, 12:54 PM   #8
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Yeah... like how the race-horse strategy advocates ruined Roth recharacterizations.
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Old 12-17-2019, 12:59 PM   #9
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Yeah... like how the race-horse strategy advocates ruined Roth recharacterizations.
Exactly
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Old 12-18-2019, 05:53 AM   #10
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Yes, this is used to escape from high premium Medigap plans that have closed. It only works if the person never had an Advantage plan and doesn't have ESRD. Switch to MA for one month during open enrollment and then switch back to original Medicare. Under the MA "trial right", the person is suppose to get their old Medigap plan back but can't because it's closed. This grants the person a Guaranteed Issue right to the Preferred Rate of certain Medigap plan letters. This method can only be used once.

The MA preferred pharmacy may be different so consider refilling early. There is a matching stand-alone PDP SEP for when the round trip is completed.

Some brokers who specialize in Medigap may not be aware of this as they usually don't bother to learn Advantage.

CT, MA, NY and WA allow Medigap changes anytime. CA and OR have a birthday rule and MO has an anniversary rule.

Quote:
Originally Posted by REWahoo View Post
My guess is that list is currently accurate but will be updated to delete Plan F and replace it with Plan G effective 1/1/2020.
The list remains the same for those eligible before 2020 (F includes F-HD). They can still buy the plans. Plans D, G, and G-HD replace C, F, and F-HD for those who become Medicare eligible in 2020 or later.
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Old 12-18-2019, 06:13 AM   #11
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MBSC, thanks for confirming and clarifying. Much appreciated.

I'm very surprised those of us eligible for Medicare prior to 2020 would be able to use this to purchase a Plan F or F-HD policy say 10 years from now. Doesn't seem logical, but then it is the govt making the rules.
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Old 12-18-2019, 08:47 AM   #12
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Good to know if this happens to me again, in the future. Was not a happy camper
when Geisinger Ins cancelled all medigap plans in Pa this year.

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Old 12-18-2019, 10:13 AM   #13
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I just turned 65 here in Arizona on Nov 1 and signed up for a Medicare Advantage Plan from Aetna for 2019 and now just switched to a new plan from Aetna for 2020. I should have trial rights to allow me to switch to a Medigap plan at some point. I have not received any definite absolute answer on when I can do this as I am trying to target deadlines and such.
Any thoughts here? I left another message at our local SHIP office.
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Old 12-18-2019, 10:17 AM   #14
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Quote:
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Yes, this is used to escape from high premium Medigap plans that have closed. It only works if the person never had an Advantage plan and doesn't have ESRD. Switch to MA for one month during open enrollment and then switch back to original Medicare. Under the MA "trial right", the person is suppose to get their old Medigap plan back but can't because it's closed. This grants the person a Guaranteed Issue right to the Preferred Rate of certain Medigap plan letters. This method can only be used once. ....
So it sounds like the simple closing of a plan wold not be the trigger to use this one-time right, but more once the premiums for the closed plan are significantly more than the premiums for similar open plans.... I'm guess that point might be many years after the plan has closed. Make sense?
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Old 12-18-2019, 10:29 AM   #15
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So it sounds like the simple closing of a plan wold not be the trigger to use this one-time right, but more once the premiums for the closed plan are significantly more than the premiums for similar open plans.... I'm guess that point might be many years after the plan has closed. Make sense?
That's the way I see it. It is an escape mechanism to seek relief if premium costs exceed the market by an uncomfortable amount.
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