Ask The Medicare Specialist

QUESTION:

Question from Earl: I’ll be 65 in September, have already enrolled for Parts A and B, and need to meet soon with a broker to enroll for Part D and Medigap policies. I only have one prescription drug (Calquence) but it’s very expensive. My question for you is about medical underwriting for Part D and Medigap policies. Assuming I enroll in company X for Part D and company Y for Medigap plan N, will I be prevented from ever switching to different companies for Part D and plan N?

ANSWERS:

Let me define medical underwriting. According to Wikipedia, “Medical underwriting is a health insurance term referring to the use of medical or health information in the evaluation of an applicant for coverage, typically for life or health insurance. As part of the underwriting process, an individual’s health information may be used in making two decisions: whether to offer or deny coverage and what premium rate to set for the policy. Underwriting is the process that a health insurer uses to weigh potential health risks in its pool of insured people against potential costs of providing coverage.” In other words, is the applicant more likely to provide the insurance company with a profit or loss?

There is never any underwriting for Part D. And as I’ve written about often, we evaluate every single client’s plan and get an updated list of medications during each Annual Election Period to ensure they are on the plan that not only covers all their medications but saves them the most money. Even those whose drugs haven’t changed from year to year need to have this done. Despite Earl is taking an extremely expensive medication ($15,000 per month retail), all Medicare Part D prescription plan companies must accept his application and pay for his meds day one of the policy effective date.

Medicare Advantage Plans also aren’t allowed to underwrite and must accept everyone who applies regardless of current or previous health conditions. We have thousands of clients on Advantage Plans. And like Part D, we analyze what plans and companies offer the best value for the upcoming year. If we have clients on a plan that dramatically increases rates, MOOP ( Maximum Out of Pocket) or co-pays, or basically diminishes the overall value of the plan and there are others available that offer an overall better benefit package for the same or less money, we let our clients know and they can move plans or companies with no questions asked. Supplement companies are legally able to utilize underwriting after six months past someone’s initial Part B effective date. With only a couple of somewhat rare exceptions, the three months prior to the original date and six months after, known as one’s “Open Enrollment,” is the only time Supplement companies must accept anyone into every letter plan they offer. This is why I’ve been writing so much about why it’s extremely important people understand this fact and others when it comes to the differences between Supplements and Advantage Plans. Earl has one chance, and one chance only to choose a Supplement. The medication he is taking is used to treat Chronic Lymphocytic Leukemia. This in one of several medical conditions that no Supplement company will ever accept someone outside of their “Open Enrollment.” And in Earl’s case, whatever Supplement letter plan and company he takes will be the only one he will ever have unless there are new regulations in the future. He won’t be able to change plans, even within the same company. Ever. The only move he can make is to an Advantage Plan. Besides not being able to get a Supplement again isn’t the only reason understanding the differences between the two types of Medicare health plans is important. There are financial repercussions as well. If Earl needed chemo at some point, which is likely, the cost for those infusions with Supplements is $0. Those on Advantage Plans pay 20% or the retail, which amounts to thousands of dollars. Earl mentioned he needs a broker to help him enroll in Part D and Medigap policies. I hope he and anyone else who reads the columns considers allowing The Health Insurance Store to do that. There are no hidden fees for our services for clients or potential clients, the cost is covered when we submit policies on a client’s behalf. By gaining new clients, we are able to continue providing exceptional services such as this column and the employment of our administrative and support staff who are tasked with helping clients whenever they have questions or concerns and advocating for them when a provider or insurance company has made a mistake, not provided what they’re entitled to, and anything even remotely related to their policies. This, along with the attention to detail and effort we put into ensuring new clients pick the best possible plan, super important in a situation such as Earls, is what separates us from other agents and agencies. Very few, if any, have brick and mortar offices with a full staff where one can walk in or call and get immediate attention and assistance. Thanks for reading everyone. Please submit questions to me for future columns or if you have any of a personal nature. You can also call to schedule an appointment for a no cost consultation. We can do those in office, over the phone, or via a virtual internet meeting.