If you have a pre-existing condition, such as cancer, heart disease, or asthma, you’re far from the only one. According to the Department of Health and Human Services, up to 50% of non-elderly Americans have a pre-existing health condition.
But when you need to apply for a Medicare supplement insurance plan, that pre-existing condition could complicate things.
Medicare coverage isn’t at all restricted by pre-existing conditions. However, Medigap plans offered by private insurance companies follow different rules.
If you understand when to sign up and how to find a plan that’s right for you, you can minimize the effect that a pre-existing condition can have on your coverage.
Pre-Existing Conditions for Medicare Supplement Plans
Medicare supplement plans, also known as Medigap plans, are supplied by private insurers who can consider your pre-existing conditions if you don’t sign up during your Medigap Open Enrollment Period.
If you sign up after this period ends, you may have to wait up to six months before the plan covers costs associated with your pre-existing condition.
This six-month waiting period begins once your policy starts, and can have significant implications on your out-of-pocket medical costs.
Once the waiting period has ended, your policy may be subjected to medical underwriting, which can further affect your coverage and your policy costs.
Understanding the Six-Month Waiting Period
Federal law allows Medigap policy insurers to refuse to cover your pre-existing medical conditions for the first six months of your policy. This six-month waiting period, also known as the “look back period,” allows insurers to delay coverage for health conditions that were diagnosed or treated within six months before the date when the Medigap policy started.
During this waiting period, your Original Medicare, Part A and Part B, will continue to offer you coverage for these pre-existing conditions. Your Medigap plan, though, may not cover costs associated with these pre-existing conditions, like copayments or coinsurance.
Once the waiting period has ended, your Medigap policy will cover your out-of-pocket costs associated with your pre-existing conditions.
It’s important to understand what the waiting period might mean for your health care needs. For instance, if you need to go to the hospital as a result of a car accident while you’re still in that waiting period, your Medicare Supplement plan may cover your hospital coinsurance because the car accident wasn’t a pre-existing condition.
But if you’re hospitalized because of a heart-related issue that was a pre-existing condition, then while your original Medicare plan will pay a portion of your hospital bill, you will probably need to pay the rest of the bill out-of-pocket.
If you have a pre-existing condition and plan on enrolling in or changing your Medigap plan outside of your Medigap Open Enrollment Period, then you will want to budget carefully to make sure that you can cover any associated medical costs during the next six months.
How to Avoid the Pre-Existing Condition Waiting Period
You can avoid going through the six-month waiting period by strategically buying your Medicare supplement plan.
In order to access the most plans available to you, and to avoid the waiting period, purchase a Medigap plan during your Medigap Open Enrollment Period. This period starts once you’re at least 65 and have a Medicare Part B policy, and it lasts six months.
Your Medigap Open Enrollment Period gives you a one-time guaranteed right to enroll in a Medigap plan of your choosing. If you enroll in a Medigap plan during this period, then the Medigap insurance company cannot deny you coverage or charge you a higher premium because of your pre-existing conditions.
If you must purchase a Medigap plan outside of the Medigap Open Enrollment Period, you may be able to shorten or avoid the waiting period entirely depending on the coverage that you previously had.
If you had creditable coverage for at least six months before applying for Medigap, the insurance company usually can’t make you wait before covering the costs associated with your pre-existing conditions. Creditable coverage includes:
- Individual health insurance
- Group health insurance (such as that supplied by your employer)
- And more
The good news is that your Medigap plan’s pre-existing condition waiting period is often reduced by the number of months (up to six months) that you had creditable coverage before enrolling.
That means that if you were enrolled in a creditable coverage insurance plan for six months before applying for your Medigap plan, your entire waiting period could be waived.
Making the Right Medigap Plan Choice
If you have a pre-existing condition, it is best to enroll in a Medigap plan during your Medigap Open Enrollment Period. This is the simplest way to enroll, since the insurer cannot deny you coverage or charge you a higher premium based on your pre-existing condition.
If you are shopping for a Medigap plan outside of the Open Enrollment Period, then you will need to budget for the potential expenses you might encounter during the waiting period or be able to prove that you had credible coverage for at least six months before your enrollment.
The benefit here is that your Medicare Part A or Part B will cover your pre-existing conditions with no waiting period required.
The expenses that you may need to cover will be those that Original Medicare doesn’t cover, so you won’t be entirely without coverage while waiting for your Medigap waiting period to end.