Understanding Medicare Supplement Underwriting and Insurance Costs

Medicare Supplement underwriting can be a complex process, but understanding the basics can help you navigate it more easily. The underwriting process is a review of your medical history to determine the premium costs for your Medicare Supplement insurance.

Medicare Supplement insurance companies use a standardized underwriting process, which means the process is similar across all companies. This process typically involves a review of your medical history, including any pre-existing conditions, and may include a medical exam or phone interview.

The underwriting process can affect your premium costs, with some companies charging more for certain conditions. For example, some companies may charge more for diabetes or heart conditions.

You'll encounter questions about your health history on your Medigap application, which can include ongoing health conditions, weight, blood pressure, and prescriptions. Most applications have at least one page of questions about your health.

Insurance companies use medical underwriting to limit their risk and contain costs, which means they may raise premiums, limit coverage, or deny coverage completely if you have too many high-cost health conditions.

The federal government regulates Guarantee Issue rights, but not underwriting, so each insurance carrier has different underwriting guidelines. As an agent, you need to be familiar with each carrier's Medicare Supplement agent underwriting guidelines and the health questions portion of the application.

Common illnesses that usually result in being declined for coverage include autoimmune disorders, such as lupus, and rheumatoid and psoriatic arthritis, cancer (unless you've been cancer-free for more than two years), and chronic cardiac disease.

Medicare Supplement plans work alongside your Original Medicare coverage to help cover some of the costs you would otherwise have to pay on your own. These plans, also known as "Medigap", are standardized plans with a letter assigned to each one.

The basic benefit structure for each plan is the same, no matter which insurance company is selling it to you. For example, Medicare Supplement Plan A is not the same as Medicare Part A (hospital insurance).

You can enroll in a Medicare Supplement plan without underwriting if you sign up for the Medigap plan during your six-month Medigap Open Enrollment Period. This period begins on the first day of the month that you’re both 65 years old and enrolled in Medicare Part B.

If you're 65 or older and enrolled in Medicare Part B, you're eligible for a six-month Medigap Open Enrollment Period, which starts the first day of the month you turn 65 and are enrolled in Medicare Part B.

During this period, you can enroll in any Medicare Supplement plan available in your area without underwriting, and your acceptance into the plan is guaranteed. This means the plan can't charge more if you have a health condition, as long as you're enrolled in Original Medicare, Part A and Part B.

Some states have special Medigap enrollment rules that provide added guaranteed issue protections to make Medigap enrollment more flexible. For example, Connecticut, Maine, New York, and Massachusetts have continuous or annual guaranteed issue protections.

Here are some states with special Medigap enrollment rules:

Additionally, some states offer extra enrollment periods. For instance, Maine lets beneficiaries switch plans with the same or fewer benefits during June, with no underwriting.

Medicare Supplement plans work alongside your Original Medicare coverage to help cover some of the costs you would otherwise have to pay on your own.

These plans, also known as "Medigap", are standardized plans, which means each plan has a letter assigned to it and offers the same basic benefits.

The basic benefit structure for each plan is the same, no matter which insurance company is selling it to you.

Note that the letters assigned to Medicare Supplement plans are not the same as the parts of Medicare, so for example, Medicare Supplement Plan A is not the same as Medicare Part A (hospital insurance).

Most Medicare Supplement insurance companies ask similar questions about your health history, including your age, chronic health conditions, and family health history.

You can expect to be asked about your weight or BMI, alcohol and tobacco use, and prescription drugs. These questions may affect the cost of your policy or even lead to a denial.

Some common health conditions that may be inquired about include cancer, heart conditions, diabetes, osteoporosis, and a stroke. You may be asked about diagnoses and treatments in the past few years or within your lifetime.

If you answer no to all the questions, you should be granted Medigap coverage. However, the severity of your health condition(s) and the leniency of the insurance company can impact your chances of approval.

Here are some examples of questions you may be asked on a Medigap application:

Insurance companies can charge a higher monthly premium for pre-existing conditions since these health issues increase claim risk.

Most Medicare Supplement insurance companies ask about pre-existing conditions during the application process, and this can affect the cost of your policy.

The pre-existing condition waiting period can last up to six months, depending on your current policy.

Some states have additional Open Enrollment periods and Guaranteed Issue requirements, which can provide more protection for seniors.

For example, in Connecticut and New York, Open Enrollment and Guaranteed Issue is ongoing, and Medicare Supplement plans are guaranteed available.

Here are some common underwriting questions asked by Medicare Supplement insurance companies:

Medicare Supplement insurance premiums vary by insurance company and can change yearly, so it's essential to shop around for the best rates.

The more comprehensive the coverage, the higher the premium. This means that if you want a plan that covers more of your out-of-pocket costs, you can expect to pay more each month.

Insurance companies can charge a higher monthly premium for pre-existing conditions, such as high cholesterol or high blood pressure, since these health issues increase claim risk.

The pre-existing condition waiting period can last up to six months, depending on your current policy.

If you're planning to enroll in a Medicare Supplement insurance plan, you'll need to go through the application process. This process can be complex, but understanding the basics will help you navigate it smoothly.

The best time to enroll in a Medicare Supplement plan is during your Medicare Supplement Open Enrollment period, which starts on the first day of the month you turn 65 and are enrolled in Medicare Part B. This is a crucial fact to keep in mind, as your acceptance is guaranteed during this period.

If you apply outside of Open Enrollment or Guaranteed Issue periods, you may be denied coverage or charged more based on your health history. This is why it's essential to plan ahead and enroll during the Open Enrollment period.

Some states have additional Open Enrollment periods and Guaranteed Issue requirements, so be sure to check your state's specific rules. For example, residents of Connecticut and New York have ongoing Open Enrollment and Guaranteed Issue, and Medicare Supplement plans are guaranteed available.

The application process can take some time, with Medigap underwriting taking as long as two months. However, carriers try to have an application decision within 7 to 14 business days.

You can avoid underwriting and enroll in any Medicare Supplement plan available where you live if you sign up for the Medigap plan during your six-month Medigap Open Enrollment Period. This is a great option, as your acceptance into the plan is guaranteed, and the plan can't charge more if you have a health condition.

To give you a better idea of what to expect during the application process, here are some common underwriting questions that Medigap insurance companies may ask: