Senior Solutions: Medicare and Open Enrollment Period

Q. I am 57 and recently qualified for disability benefits with Social Security. I was advised that I am eligible for Medicare and could purchase Medi-gap insurance. But when I tried to buy insurance, the company turned me down. Don’t companies have to take you if you are on Medicare?—Sarah L.

A. I believe you are referring to the Open Enrollment Period that guarantees insurance coverage regardless of the insured’s health or medical background. Medicare does contain such a provision, but it is only for those who qualify by age, and number of quarters contributed to Medicare. There is no such provision for those who are eligible for Medicare due to a disability. At turning age 65, you will be eligible for Open Enrollment.

Until then, you will probably find your choices of insurance companies and plans offered to be very limited. Check with your state department of insurance. They normally maintain a list of companies and HMOs that offer coverage to those on disability.

Q. I just received word that my HMO will no longer be providing coverage in my area. In their letter they mention I will have no trouble obtaining replacement coverage because of Guarantee Issue. Just what is Guarantee Issue, and how do I use it?— Kelly K.

A. Medicare allows an individual who has been involuntarily cancelled by his carrier 63 days from the date of cancellation to replace his coverage without evidence of insurability. Most companies will want to see some evidence of cancellation by your current carrier. By all means, save the letter you received from your HMO. It may be wise to have a copy or two on hand in case the new company wants a copy.

It is important to remember that while you have 63 days to replace your plan, you have no coverage during that period until you do. My recommendation is to have the new insurance in place before the old expires. This is easily done. Direct your agent to make the new coverage effective the same date the old coverage expires.

Q. My wife and I have a Plan D. We recently heard that a Plan F would be better for us and agreed to switch insurance companies. The new company now tells us that my wife is not eligible for their coverage due to a hospital stay this year. I thought once you are on Medicare, the insurance companies had to take you, no questions asked. Isn’t that true?—Harry R.

A. No. Individual insurance companies have the right to deny coverage based on medical or health issues if the individual is not in an Open Enrollment or Guarantee Issue period. My advice for those who desire to change plans is to visit with a reputable agent beforehand to be sure your individual needs would be better served by changing. If a change is warranted, never allow your existing coverage to expire until you have proof the new plan is in place.

Peter Gulatto has been associated with the insurance industry for more the 30 years. He has held a Certified Insurance Counselors (CIC) designation since 1983. His responsibilities have included those of an insurance agent, risk manager, consultant and insurance educator. His interest now is focused on providing answers to the insurance challenges facing our senior population.

Submit your questions to Peter J. Gulatto c/o The Centurion Group Inc., P.O. Box 3333, Rockford, IL 61106, or call at 815-229-0994.

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