Medicare Supplement Insurance, often called Medigap, is private insurance designed to help cover out-of-pocket costs remaining after Original Medicare (Part A and Part B) pays its share. These costs include copayments, coinsurance, and deductibles, which can accumulate significantly even with federal coverage. Securing a Medigap policy generally requires medical underwriting, where insurers assess an applicant’s health status before issuing coverage. However, certain federal rules grant beneficiaries a special right known as Guaranteed Acceptance, which bypasses this health screening process. This article defines Guaranteed Acceptance and explains the circumstances under which it applies.
The Meaning of Guaranteed Acceptance
Guaranteed Acceptance, frequently referred to as Guaranteed Issue rights, means that an insurance company must sell you a Medigap policy if you meet certain criteria. Under these special circumstances, the insurer cannot use your current or past health status, medical history, or any pre-existing conditions as a reason to deny coverage.
When applying for Medigap outside of a guaranteed issue period, insurance companies typically employ medical underwriting. This process involves reviewing an applicant’s health background and past diagnoses, which can lead to denial of coverage or a waiting period for pre-existing conditions. Guaranteed Acceptance removes this barrier entirely, ensuring that coverage is accessible regardless of health.
In addition to prohibiting denial, Guaranteed Acceptance also prevents the insurer from charging a higher premium than they would charge a person in good health. The policy must be offered at the same rate as a healthy applicant of the same age and gender applying for the same plan. This rule ensures equitable access to coverage for individuals who have lost other health insurance through no fault of their own.
This federal mandate ensures that individuals transitioning between certain types of coverage or returning to Original Medicare are not penalized for their health status. The protection is designed to prevent gaps in coverage.
Qualifying Events for Guaranteed Issue Rights
Guaranteed Issue rights are triggered by specific life events involving the involuntary loss or change of certain health coverage. To exercise this right, the individual must submit their Medigap application within a specific time frame, typically 63 calendar days from the date their previous coverage ends.
Common Qualifying Events
Guaranteed Issue rights are triggered by several specific events, including:
- Loss of coverage under a Medicare Advantage (MA) plan because the plan leaves the service area, or the beneficiary moves out of the plan’s service area.
- Using the “trial right,” which allows a beneficiary to switch back to Original Medicare within the first twelve months of enrolling in an MA plan when they were first eligible for Medicare at age 65.
- Termination of an employer-sponsored group health plan that had been supplementing Medicare.
- Termination of a Medigap policy because the insurer goes bankrupt or closes its business.
- Being misled or misrepresented by an insurance agent or company when selecting initial coverage.
The 63-day period begins the day the prior coverage ends, not the day the beneficiary receives notice. This deadline is strictly enforced by federal regulation, and missing it means the individual will likely be subjected to full medical underwriting for any subsequent Medigap application. Exercising the right requires providing proof of the qualifying event and the date the prior coverage ceased.
Medigap Plans Offered During Guaranteed Acceptance
Guaranteed Acceptance does not mandate that insurers offer every available Medigap plan. Federal rules require insurers to offer a specific selection of standardized plans to beneficiaries who qualify for Guaranteed Issue rights. These plans must include Medigap Plan A, and the insurer must also offer at least one of the higher-benefit plans (B, C, F, K, L, M, or N).
Standardized Medigap plans are identified by letters (A through N) and offer the same benefits across all insurance companies, though premiums can vary. Plans A, B, K, L, M, and N are widely available to all eligible beneficiaries during a Guaranteed Issue period. The selection ensures that individuals have access to a range of coverage levels.
Medigap Plans C and F are only available to individuals who were first eligible for Medicare before January 1, 2020. This restriction applies even during a Guaranteed Issue period, meaning newer Medicare beneficiaries must select from the other available standardized plans due to the phase-out of Part B deductible coverage.
While the minimum required plan offerings are federally mandated, some states offer additional protections, such as requiring a broader selection of plans. The basic federal guarantees serve as the minimum standard across the country.