Medicare Supplement Underwriting

Summary: Applying for a Medicare Supplement plan outside of your Open Enrollment Period can result in having to undergo Medicare Supplement underwriting. The underwriting process involves answering questions about your health, including any pre-existing conditions, any medications you take, and more. In this article, we’ll explain how underwriting health questions work and provide some examples. Estimated Read Time: 6 min

What is Medicare Supplement Underwriting?

If you apply for a Medicare Supplement plan outside of your Medicare Supplement Open Enrollment Period, you may need undergo medical underwriting. HealthCare.gov defines medical underwriting as “A process used by insurance companies to try to figure out your health status when you’re applying for health insurance coverage to determine whether to offer you coverage, at what price, and with what exclusions or limits.”

Medicare Supplement underwriting questions help an insurer determine whether they are willing to undertake your risk and allow you to enroll in their Medicare Supplement plan. Each carrier offering Medicare Supplement plans will have its own list of questions during the underwriting process; these questions will be the same across all Medigap plans offered by the same carrier.

In addition to health questions, the Medigap underwriting process can also involve a basic physical exam by a healthcare provider. The insurance carrier may also ask you to sign a privacy release form so it can review copies of your medical records from the past few years.

When is Medicare Supplement Underwriting Used?

Carriers use Medicare Supplement underwriting anytime you apply for Medicare Supplement coverage and do not have guaranteed issue rights. If any of the following apply to you, then you should be prepared to answer medical underwriting questions:

• You’re outside of your Medicare Supplement Open Enrollment Period
• You don’t have guaranteed issue rights due to a qualifying life-changing event
• Your state doesn’t have state-specific rules regarding Medicare Supplement enrollment

Every Medicare beneficiary will have at least one opportunity in their life to enroll in a Medicare Supplement plan without medical underwriting. This occurs during your Medicare Supplement Open Enrollment Period (MSOEP). If you are concerned that you may have a health condition that will disqualify you from a Medigap policy, it is vital that you enroll in a plan during your MSOEP.

Why Do Medicare Supplement Plans Have Underwriting?

Medicare Supplement plans, like Medicare Advantage plans and Medicare Part D plans, are offered by private insurance companies that must follow rules set by the federal government. However, only Medicare Supplement plans have underwriting that can result in you being denied a policy. So, why is that?

Medicare Supplement (Medigap) plans help cover the costs left behind by Original Medicare, such as copayments, coinsurance, and deductibles. These benefits are standardized by the federal government, so carriers cannot put restrictions on what each plan covers.

By encouraging Medicare beneficiaries to sign up for a Medicare Supplement plan as soon as they are eligible, carriers get a mix of high-risk and low-risk policy holders. This mix of policy holders helps keep premiums reasonable while keeping the insurance company stable.

Just like with other insurance, some individuals will wait until they encounter a health problem to seek out coverage. By implementing medical underwriting, Medicare Supplement plan carriers can help ensure they don’t only get high-risk policy holders.

If the insurance company decides you are too much of a risk to take on, they can deny you coverage based on your current or previous health. In some cases, insurance companies will not completely deny you coverage, but may charge you more for your policy.

Examples of Underwriting Questions for Medicare Supplement Plans

As mentioned above, each carrier will have its own set of underwriting health questions for their Medicare Supplement applications. Below are some examples of health questions that carriers may ask and how it can affect your application.

“What is your height and weight?”

Some carriers will not accept applicants who are severely overweight or underweight. For some carriers, weight will have less of an impact on your application, but for others, it could result in your application being declined.

“Within the past six months, have you been advised to have further treatment, testing, or any surgery that has not ben performed?”

If you have an upcoming surgery or have been advised by your doctor to receive further treatment related to a diagnosed medical issue, it is best to have those procedures done before applying for a Medicare Supplement plan. This is a common reason for Medicare Supplement applications to be declined.

“In the past two years, have you received treatment for cancer, leukemia, heart attack, stroke, or another critical illness?”

There are some pre-existing conditions that can instantly disqualify you from a Medicare Supplement plan. Though underwriting varies between carriers, there are declinable conditions that are common across multiple carriers. We’ll look at common declinable conditions in more detail below.

Declinable Pre-Existing Conditions

Certain pre-existing health conditions are considered declinable or significant health risks for several Medicare Supplement insurance carriers. However, each company has different timelines as to how far back in your medical history they check.

Common declinable conditions include:

• AIDS, ARC or HIV
• Alzheimer’s Disease
• Cancer
• Chronic Obstructive Pulmonary Disease (COPD)
• Dementia
• Heart failure
• Immune deficiency disorders
• Kidney disease
• Lou Gehrig’s Disease (ALS)
• Parkinson’s disease
• Organ transplant
• Osteopetrosis
• Stroke

This list is not all-encompassing, and even if you answer yes to any of these questions, you may be admitted to a plan with the right carrier. Pre-existing conditions are not the only factor when insurers consider your answers to Medicare Supplement underwriting questions. The drugs you take may also affect your enrollment eligibility. Specific medications, especially some blood thinners, cause applications to be declined.

Even if you have a pre-existing condition or take a declinable prescription, your application may still be approved. Some carriers will accept applicants who have a declinable condition or prescription if they meet certain criteria. For example, if you are currently taking a one-time fill for blood thinners due to surgery and are expected to make a full recovery, your application may be accepted.

What to Do if Your Medigap Application is Declined Due to Underwriting Questions

If you apply for a Medicare Supplement plan and your application is denied due to underwriting, you may have other options.

• You can appeal the decision by following the provider’s appeal process. The State Health Insurance Assistance Program (SHIP) can help you navigate the appeals process.
• Since Medicare Supplement underwriting eligibility questions vary by carrier, you may be able to qualify for the same Medigap plan through a different carrier.
• If you are denied a Medicare Supplement plan, you can still explore other coverage options such as a Medicare Advantage plan.

If you are enrolling in a new Medigap plan, it is imperative to keep your current coverage until the new carrier accepts your application. If you disenroll from your current plan and are denied coverage due to underwriting, you will be unable to re-enroll in your original plan. Additionally, Medigap policy applications can take up to two months to be approved or denied. This is why it’s important to keep your coverage until you receive an acceptance notice for your new policy.

Underwriting for Medicare Supplement plans can sometimes be a challenging topic to navigate. If you have specific questions or are trying to determine if your pre-existing condition could impact your Medigap application, give us a call. Our team of licensed insurance agents can answer your questions and help you better understand the underwriting process.

You can learn more about Medicare Supplement plans and other coverage options, such as Medicare Advantage plans, by visiting our pages below.

Sources

 Medical Underwriting, HealthCare.gov. Accessed February 2024

https://www.healthcare.gov/glossary/medical-underwriting/

Get Ready to Buy – Your Medigap Open Enrollment Period, Medicare.gov. Accessed February 2024

https://www.medicare.gov/health-drug-plans/medigap/ready-to-buy