As an agent, helping clients navigate Medicare Supplement (Medigap) insurance can be both rewarding and challenging. One key aspect agents must understand and be able to explain to clients is what is Medicare supplement underwriting. Although Medigap plans offer standardized benefits, getting approved for coverage; especially outside of guaranteed issue periods, often depends on the underwriting process. Here’s what you need to know to guide your clients effectively.
Medicare Supplement Underwriting
Underwriting for Medicare Supplement plans refers to the process insurers use to evaluate an applicant’s health history before they issue a policy. This process determines whether an applicant qualifies for coverage and, in some cases, what premium they’ll pay. It typically includes a health questionnaire and a review of the applicant’s prescrption medications and medical history.
When Underwriting Is Required
Underwriting is generally required when a client applies for a Medigap plan outside of their open enrollment period or a guaranteed issue period. Here’s a breakdown:
Medigap Open Enrollment Period (OEP): This is a six-month window that starts the first month a client is 65 or older and enrolled in Medicare Part B. During this time, carriers must accept the applicant regardless of health status; CMS does not permit underwriting.
Guaranteed Issue Rights: These occur in specific situations (such as losing employer coverage or moving out of a Medicare Advantage plan’s service area). During this time, the client can enroll in certain Medigap plans without having to go through medical underwriting.
Learn more about Guaranteed Issue Rights
Unfortunately, outside of these periods, applicants are typically subject to underwriting and can be denied coverage based on pre-existing conditions.
Common Health Conditions That Affect Underwriting
While each carrier has it’s own underwriting criteria, common disqualifying conditions include:
- Congestive heart failure
- Insulin-dependent diabetes with complications
- Chronic obstructive pulmonary disease (COPD)
- Cancer within the past two years
- Alzheimer’s or dementia
- End-stage renal disease (ESRD)
In addition; some carriers may impose a waiting period for pre-existing conditions or adjust premiums based on health history.
Watch a quick YouTube video on Medicare Supplement underwriting
Navigating Medicare Supplement Underwriting
- Timing is everything: Try and encourage clients to apply during their OEP or another guaranteed issue window to avoid underwriting altogether.
- Pre-Qualify Applicants: Ask clients key health questions before submitting applications to avoid the disappointment of unnecessary declines.
- Know the Carriers: Different insurers have different underwriting guidelines. It is a good idea to familiarize yourself with each carrier you represent’s underwriting grids and health questions.
- Explore Alternatives: In the event the plan declines a client, they can opt for a plan that does not require underwriting, such as Medicare Advantage or other coverage options.
Understanding Medicare Supplement underwriting is essential to provide viable options to your clients. By staying informed about carrier guidelines and knowing how to time applications correctly, you can help clients get the coverage they need with fewer issues.
Leave a Comment