When you enroll in Original Medicare, Medicare can’t deny your application because you have a medical condition, also known as a preexisting condition. Similarly, if you enroll in a Medicare Advantage (MA) plan, it can’t deny your application so long as you’re eligible for Medicare Parts A and B and don’t have end-stage renal disease. However, if you’re considering a Medicare Supplement Insurance policy (sometimes called Medigap), you should be aware that your preexisting condition may delay some Medigap benefits for up to six months. This is called the Medicare Supplement Waiting Period, which starts on the effective date of Medicare Part B and can be six months.
Most people have a chance to avoid the Medicare Supplement Waiting Period entirely. It won’t impact new medical conditions or your Original Medicare benefits.
What’s a Preexisting Condition?
A preexisting condition is a health issue you already have before the insurance policy starts, such as diabetes or COPD. If you have a preexisting condition, you’re not alone. According to an analysis by the Department of Health and Human Services, up to half of Americans under age 65 already have some type of preexisting condition (in this case, a health issue that developed before your Medicare Supplement start date).
Unfortunately, there’s no cut-and-dried list of what does or does not qualify as a preexisting condition that may prevent you from getting coverage. The criteria can vary from plan to plan. You can assume that any physical or mental injury, illness, disorder, ailment, or disease that was diagnosed before the start of a new policy may count.
What is the Medicare Supplement Waiting Period?
For up to six months after your Medicare Supplement plan begins, your new plan can choose not to cover its portion of payments for preexisting conditions that were treated or diagnosed within six months of the start of the policy. This forces you to pay out-of-pocket for standard Medicare costs like Medicare Part B’s 20% coinsurance. After six months, the plan will cover those payments.
Keep in mind that:
- Medicare Supplement plans must continue to cover medical costs for new ailments and injuries during your waiting period.
- Original Medicare does not have waiting periods for preexisting conditions.
- Even if you are subject to a Medigap waiting period due to your previous medical history, your Medicare plan will still cover its portion of care for your preexisting condition during this time. And after six months, your Medicare Supplement plan will kick in as well.
- Most people will not have any waiting period (read more below).
Why Apply for Medigap During Your Medigap Open Enrollment Period?
Most Medicare beneficiaries apply for a Medigap policy before or during their Medigap Open Enrollment Period, which starts when your Medicare Part B becomes effective. Medigap doesn’t have annual enrollment periods. Your open window to apply is specific to you.
If you apply before or during your Open Enrollment Period, the insurer can’t deny your application and must give you the best rate for your age. If you apply before your Open Enrollment Period, you can have the Medigap policy start the same date as Medicare Part B. Keep in mind, however, that the insurer may impose a waiting period for preexisting conditions.
If you sign up after your Medigap Open Enrollment Period, things can get a little tricky. Medigap insurance companies are legally allowed to:
- Ask you to go through medical underwriting — a process to figure out your health status
- Charge you a higher premium than someone who’d signed up during their Medigap Open Enrollment Period
- Subject you to a preexisting condition waiting period for up to six months of your policy
- Refuse to sell you a Medicare Supplement plan
Avoiding the Medicare Supplement Waiting Period for Preexisting Conditions
There’s a good chance that you won’t have a Medicare Supplement Waiting Period. Here’s why:
Your Recent Insurance
By law, Medicare Supplement plans must shorten any preexisting condition waiting period by the number of months you had creditable coverage directly leading up to your enrollment. Fortunately, most forms of health insurance are considered to be creditable.
If you were covered under a group or individual insurance plan, chances are it met the criteria. Some exceptions to creditable coverage are short-term plans.
Your creditable coverage grants you a one-for-one exchange for up to six months. This means your preexisting condition waiting period is reduced one month for each month you were enrolled in creditable coverage prior to signing up for your Medicare Supplement plan.
So, if you had creditable coverage for four months before enrolling, you may only have a two-month waiting period imposed on your plan.
If you maintained six or more months of prior creditable coverage, the Medicare Supplement provider may not impose a waiting period but must cover all your preexisting medical conditions when the policy becomes effective. However, if you did not have creditable coverage more than 63 days before getting a Medicare Supplement plan, then the Medigap company can impose a waiting period.
Switching Medicare Supplement Plans
If you successfully switch between Medicare Supplement plans, then your new plan cannot exclude coverage for any preexisting conditions.
Under 65 Years Old
If you get Medicare before your 65th birthday, most states do not guarantee enrollment into a Medigap plan. If you live in a state that requires Medigap companies to sell to people under 65 and you are accepted into a Medigap plan, the maximum possible waiting period is the same.
Special Enrollment Exceptions to the Preexisting Waiting Period Rule
After your initial Medigap Open Enrollment window closes, you can be declined or charged more for your plan based on your preexisting conditions and medical history.
There are certain situations, however, in which you can buy a Medigap policy without the risk of being declined or charged more. These include (but are not limited to):
- You move out of your Medicare Advantage plan’s area
- Your Medicare Advantage plan has been discontinued or is leaving your service area
- You lose your Medicare Supplement insurance plan because the insurance company went bankrupt
- You end your Medigap coverage because the insurance company misled you or was not compliant with the law
- You joined your Medicare Advantage or PACE plan at age 65, you’ve had it for less than a year, and you want to sample another plan
- You joined a Medicare Advantage or Medicare SELECT plan for the first time and want to switch back to Medigap
- You live in a state with its own exceptions (New York, Connecticut, California, Maine, Missouri, Oregon or Washington, in some circumstances)
If you meet the criteria for any of the exceptions, you’ll be automatically granted a Medicare Supplement guaranteed issue period. This helps you avoid expensive underwriting, and you won’t be subject to a preexisting condition waiting period.
Your Next Steps with Medicare Supplement
If you want a Medicare Supplement plan, it’s best to sign up during your Medigap Open Enrollment Period. Not only will you avoid medical screening and underwriting, you can get the best rate for your age. If you have a preexisting condition and had prior coverage, check the terms of the plan you want to make sure your previous insurance qualifies you for a shorter wait.
If you’re looking for Medicare Supplement insurance outside of your Medigap Open Enrollment window, you still have options, but they may be limited. In certain situations — listed above, such as moving out of a plan’s service area — you can still avoid the waiting period.
It’s best to check with multiple companies to save money and time. Different companies may have lower prices or easier enrollment guidelines. So while one company may deny coverage for your preexisting condition, a broker can guide you to others that won’t.