Medicare Supplement insurance, also known as Medigap, is private health insurance designed to help cover out-of-pocket costs not paid by Original Medicare, Part A and Part B. These costs include copayments, coinsurance, and deductibles. Applying outside the initial six-month open enrollment period often requires medical underwriting, which can lead to coverage denial or higher premiums based on health status. Guaranteed Acceptance, or Guaranteed Issue, is a federal protection that overrides this standard process, ensuring an insurer must sell an eligible Medigap policy to a beneficiary regardless of their health history. This protection is triggered by specific, qualifying life events.
Specific Situations That Trigger Guaranteed Issue Rights
Guaranteed Issue rights are federally mandated and come into effect when a beneficiary experiences an involuntary loss of specific health coverage through no fault of their own. The most common trigger is the involuntary loss of coverage, such as when an employer-sponsored retiree plan ends or a Medicare Advantage plan is discontinued in the beneficiary’s service area.
A trial period also grants a Guaranteed Issue right for individuals who enroll in a Medicare Advantage plan upon first becoming eligible for Medicare at age 65 and decide to switch back to Original Medicare within the first year. This one-time right allows them to purchase a Medigap policy without medical underwriting. Similarly, if a beneficiary had a Medigap policy, switched to a Medicare Advantage plan for the first time, and then disenrolled within the first year, they also have a right to return to a Medigap plan.
These rights are time-sensitive. In most situations, the beneficiary has a 63-day window to apply for a Medigap policy, starting from the date their previous coverage ends. It is recommended to apply for the new policy as early as 60 days before the existing coverage terminates to prevent a gap in insurance.
Which Medigap Plans Must Offer Guaranteed Acceptance
Medigap plans are standardized by the federal government and identified by letters (e.g., Plan A, B, G, and N). When exercising a federal Guaranteed Issue right, insurers must offer specific, standardized Medigap plans. The available plans depend on the date the beneficiary first became eligible for Medicare.
For individuals eligible for Medicare on or after January 1, 2020, insurers must offer Plans A, B, D, G, K, L, M, and N under the Guaranteed Issue right. If the beneficiary was eligible for Medicare before January 1, 2020, they are also guaranteed the right to purchase Plans C and F, which cover the Part B deductible that newer plans do not. Insurers must offer at least one of the plans designated for Guaranteed Issue, such as the popular Plan G.
The insurer may not be required to offer the high-deductible version of a plan, such as High-Deductible Plan G, under the federal rule. Since benefits are standardized, Plan G from one insurer offers the exact same coverage as Plan G from another, though premiums will vary. The requirement focuses on ensuring access to core supplemental coverage.
Understanding Premiums and Medical Underwriting
The direct financial impact of Guaranteed Acceptance is the mandatory elimination of medical underwriting. Outside of a Guaranteed Issue period, an insurer can review an applicant’s health history, deny coverage, or charge a higher premium due to pre-existing medical conditions. When a Guaranteed Issue right is in effect, the insurer is prohibited from asking health questions, denying the application, or imposing a waiting period for coverage of pre-existing conditions.
The insurer must charge the applicant the “best available rate,” meaning they cannot charge a higher premium based on the person’s health status. Premium costs are still determined by the state’s approved rating methodology, which can be community-rated, issue-age rated, or attained-age rated. This protection ensures the applicant is treated as favorably as someone who enrolled during their initial open enrollment period, preventing health-based discrimination in pricing.
State Rules That Expand Guaranteed Acceptance Protections
While federal law sets the minimum standard for Guaranteed Issue rights, many states have enacted their own rules to expand these consumer protections. State-specific rules often provide beneficiaries with more opportunities to secure or switch Medigap policies without medical underwriting. This means a person may have a Guaranteed Issue right under state law even if they do not qualify under the federal rules.
A common state-level expansion is the “birthday rule,” which allows Medigap policyholders in certain states (e.g., California and Oregon) to switch to a different Medigap plan with equal or lesser benefits during a specific window around their birthday. Other states, including Connecticut, Massachusetts, and New York, have implemented continuous Guaranteed Issue, allowing beneficiaries to enroll in or switch certain Medigap plans at any time of the year without medical underwriting.