Medicare Rights on Supplemental Insurance

Original Medicare comes in two parts, called Part A and Part B. Parts A and B cover medical services such as inpatient and outpatient hospital stays, doctor's visits, home health care, hospice, mental health and preventive screenings. However, Original Medicare also comes with an array of annual deductibles, copayments and coinsurance rates. Medicare supplemental insurance, often referred to as Medigap, can help seniors and other Medicare users pay these costs. Medigap is not mandatory, but Medicare beneficiaries do have certain rights regarding it.

Guaranteed Issue Rights

• During certain times, Medicare users have the right to purchase any Medigap policy offered in their area, at the best price available for their age, with no health screening. This is called the guaranteed issue right. Medigap companies may demand a waiting period for people with pre-existing conditions, however. There are several times when a beneficiary has guaranteed issue rights, although these may vary slightly by state. The most important is during Medicare's initial open enrollment period, which lasts for the seven months surrounding a person's 65th birthday. Other circumstances where a person may have guaranteed issue rights are if his Medicare Advantage plan leaves his area, or if an employer-sponsored Medicare supplemental plan terminates or reduces benefits.

Right to Free Look

• Medigap customers are entitled to a 30-day "free look" period when purchasing their plans. The free look period allows Medigap buyers to try out their plans without risk. If they decide they do not like their new Medicare supplements before the end of the 30-day period, they are entitled to cancel their policies without penalty and with a full refund.

Right to Renew

• As long as a Medicare beneficiary pays her monthly premiums, she has the right to renew her Medigap policy every year automatically. Unless a plan was purchased before 1992, Medigap insurance companies cannot decline a renewal as long as the payments are being met and all other conditions of the policy are being fulfilled.

Right to Purchase Under 65

• Not all Medicare beneficiaries are 65 or older. People with certain health conditions and disabilities may also enroll in Medicare. People under 65 do not have all the same Medigap rights that those 65 or over do, however. Federal law does not require Medigap companies to sell to those under 65. Medigap companies are not generally required by state law to offer the same selection of plans to Medicare users under 65. But if there is a state law requiring Medigap companies to offer one or more plans to those under 65, they must do so. They must also extend guaranteed issue rights to Medicare users under 65 if the state allows open enrollment period rights to them.