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December 29, 2021 at 03:42 PM
What You Need to Know
- The Illinois and Nevada rules take effect in January, and the Idaho rules take effect in March.
- California and Oregon already had birthday rules.
- Connecticut, Maine, Missouri, New York state and Washington state have other types of Medigap plan-switching rules.
Three states — Idaho, Illinois and Nevada — are adding rules that could help unhappy Medicare supplement insurance users change policies without going through medical underwriting.
The new state birthday rules will give people who already have Medicare supplement insurance policies, or “Medigap” policies, a chance to switch Medigap policies for a few weeks every year, around the time of their birthday anniversaries.
Jesse Slome, the director of the American Association for Medicare Supplement Insurance, put out an alert about the new state birthday rules. He emphasized, in a comment included in the alert, that Medigap users who want to switch policies should talk to insurance agents who regularly sell Medicare plans.
“This is probably one of the least-known opportunities available to seniors,” Slome said.
Getting professional advice is important, because each state has different rules, and understanding and meeting a state’s requirements is critically important, Slome said.
What the New Birthday Rules Mean
The start of the states’ new “Medigap” policy birthday rules could give insurance agents and brokers a new chance to reach out to Medigap users.
The new rules could also help insurance producers in the affected states present Medigap policies as attractive alternatives to Medicare Advantage plans.
For the affected health insurers that issue Medigap policies, the new rules will create a framework for offering plan switches on a guaranteed-issue basis, which may reduce the odds that sudden gushers of claim risk will cause some issuers to capsize.
But, because many of the plan switchers will be people with serious illnesses, hoping to get access to the best care providers for their conditions, the new rules could also add claim cost management headaches, at a time when the COVID-19 pandemic is already complicating efforts to predict and manage health care costs.
Medigap Basics
The Medicare Part A hospitalization program pays hospital bills, and the Medicare Part B program pays outpatient and physician services bills.
Medigap policies can help consumers pay their Medicare Part A deductible and meet the traditional Medicare copayment and coinsurance requirements.
Consumers can also buy Medicare Advantage plans. Those policies tend to offer enrollees broader coverage than the traditional Medicare program, in exchange for giving the enrollees financial incentives to use in-network providers and requiring the enrollees to get preauthorization for some medical procedures.
Many producers strongly prefer selling consumers Medigap policies, because they see both the rules for producers and the coverage rules for the patients as being more flexible.
For producers, one obstacle to selling Medigap policies has been higher monthly premium costs for Medigap coverage. Another obstacles has been the difficulties unhappy Medigap users have with switching policies.
