If you apply for Medicare Supplement Insurance during your Initial Enrollment Period, insurers cannot deny you coverage due to pre-existing conditions or charge you more than they would charge a healthy individual for the same coverage. However, it is important to note that individuals with pre-existing conditions may need to wait for a specified period of time before their Medicare supplemental insurance begins to pay for expenses relating to the pre-existing condition.
Outside of the Initial Enrollment Period, those with pre-existing conditions can still apply for Medigap coverage, but may find their plan options diminished. In addition, insurers may charge a higher premium for coverage of pre-existing conditions or deny coverage altogether.
It is estimated that about 54 million non-elderly adults in the U.S. (27% of the population) have one or more “deniable” pre-existing conditions. If you’re one of those affected by a pre-existing condition, read on to learn more about how Medigap can work for you.
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What Is a Pre-existing Condition?
A pre-existing condition can be any type of health condition that was diagnosed and/or treated before the start date of your new insurance coverage. This differs from a new condition, which is a medical issue that develops after you are already covered by your current policy.
There is no official list of pre-existing conditions. Instead, this can vary among insurers. Generally, you can assume that any illness, ailment, disorder, disease, or physical or mental injury that was diagnosed before the start of your new policy may be considered a pre-existing condition. However, some medical issues that are commonly considered pre-existing conditions include:
- Acne
- Asthma
- Atherosclerosis
- Cancer
- COPD (chronic obstructive pulmonary disease)
- Diabetes
- Epilepsy
- Extreme obesity
- Heart disease
- Hypertension (high blood pressure)
- Sleep apnea
- Stroke
Issues such as substance abuse disorders, anxiety, depression, and other mental health issues may also be considered pre-existing conditions.
There was a time when a pre-existing condition could spell trouble for individuals seeking any type of health insurance coverage. However, provisions of the Affordable Care Act (ACA) that went into effect in 2014 prohibit insurers from denying coverage based on pre-existing conditions. These provisions also do not allow insurers to exclude the conditions from coverage. But while Original Medicare cannot exclude pre-existing conditions from coverage, Medigap policies can deny coverage outside of the Initial Enrollment Period.
What Costs For Pre-existing Conditions Can Medigap Cover?
A Medigap policy can help offset Medicare costs such as deductibles and coinsurance after Original Medicare helps pay for many medically necessary healthcare services and supplies. The exact amount of coverage you receive varies depending on the specific plan you choose. Here’s a look at some of the out-of-pocket costs that Medigap plans can help cover.
- Coinsurance: This is the percentage of your Medicare Part A and Part B covered medical expenses you are expected to pay. For example, your Medigap policy could help cover the $400 per-day coinsurance required for days 61 to 90 of a hospital stay in Medicare Part A, or a 20% copy on a doctor’s visit in Medicare Part B. If your condition requires frequent doctor visits or hospital stays, this coverage can reduce your out-of-pocket costs.
- Deductibles: This is the amount you pay for covered healthcare services before Medicare starts to pay. In 2023, the Medicare Part A deductible is $1,600 for each inpatient hospital benefit period. Individuals with pre-existing conditions that require hospitalizations may find this benefit helpful.
- Hospitalization: A new Medicare Part A deductible applies with each hospitalization. If you’re hospitalized for more than 90 days, your coinsurance increases to $800 until you use up your lifetime reserve days. After that, you are responsible for 100% of the expenses. A Medigap policy can help offset these costs and pay for up to an additional 365 days after your Medicare benefits are used up.
- Durable medical equipment (DME): This includes reusable medical equipment such as hospital beds, wheelchairs, walkers, and home oxygen equipment. Generally, Medicare recipients are responsible for paying a deductible and 20% of the Medicare-approved amount. A Medigap policy can be advantageous for those with pre-existing conditions who need items like blood sugar monitors and glucose strips, oxygen equipment and accessories, or infusion pumps and supplies.
- Lab work: This includes certain blood tests, some screening tests, tests on tissue specimens, and urinalysis. Medigap can help cover the deductible, which you must pay before Medicare steps in to help cover costs.
- Specific benefits: Some benefits are important to individuals with pre-existing conditions, such as up to three pints of blood for transfusions, emergency medical costs while abroad, coinsurance for skilled nursing facility care, and hospice coinsurance or copayment costs. These may also be covered by a Medigap policy.
Original Medicare and Medigap policies are designed to work together, but you cannot purchase a Medigap policy if you have opted for a Medicare Advantage plan instead of Original Medicare. There are a variety of Medicare Supplement plans available, including Plans A, B, C, D, F, G, K, L, M, and N. Each plan offers different types of coverage and some options are not available in certain states or to newly eligible Medicare recipients.
What Does Medigap Not Cover?
Certain medical expenses are not covered under supplemental Medicare health insurance policies. These include:
- Long-term care, such as non-skilled care in a nursing home
- Private-duty nursing, such as live-in nurses
- Vision or dental services
- Eyeglasses
- Hearing aids
Medigap policies also do not cover the cost of prescription drugs, as this is covered under Medicare Part D. If your pre-existing condition requires you to take medication, you may benefit from looking into Part D coverage as well.
Enroll When You’re First Eligible for Medigap Coverage
Many Medicare beneficiaries choose to apply for their Medigap policy during their Initial Enrollment Period for Medicare Supplement. This period begins on the first day of the month in which you are both 65 years old or older and enrolled in Medicare Part B. It lasts for 6 months from this date. Enrolling during this period can help you avoid being charged higher rates or being denied coverage.
For individuals with pre-existing conditions, purchasing a Medigap policy when it is first available can help offset expensive medical expenses. For example, studies show that Medicare enrollees with Medicare Supplement coverage are three times less likely to have trouble paying their medical bills when compared to enrollees who do not have supplement policies.
Out-of-pocket expenses are not the only issue if you wait to purchase your Medicare Supplement policy. If you do not enroll before your enrollment period ends, you may have to pay a higher premium. The insurance company could also refuse to sell you a Medicare Supplement plan at all, or subject you to a pre-existing condition waiting period of up to 6 months.
What Is the Pre-existing Coverage Waiting Period for Medigap?
If you are subject to a Medicare Supplement pre-existing condition waiting period, your policy does not pay costs associated with your pre-existing condition during that time. This means that you have to pay all the out-of-pocket costs related to your pre-existing conditions during the waiting period, which can last up to 6 months.
However, Original Medicare doesn’t have the same waiting period as a Medigap policy, so Part A and Part B might cover a pre-existing condition when your Medigap policy will not. In this case, you may need to cover your own deductibles and coinsurance, but the rest of the costs may be covered. The pre-existing condition waiting period also does not affect your coverage for other conditions that are not related to your pre-existing condition. In certain situations, it may also be possible to skip the waiting period altogether.
Can You Skip the Waiting Period for Pre-existing Condition Coverage?
If you had health insurance that qualifies as “creditable coverage” prior to your Medicare Supplement plan enrollment, this could shorten or even eliminate your pre-existing condition waiting period. To qualify as creditable coverage, a health insurance or other health benefit plan must provide coverage that’s at least as good as what Medicare provides.
Legally, Medigap providers must shorten the waiting period by the number of months you had creditable coverage directly before you enrolled. In other words, your waiting period is reduced by one month for each month you were enrolled in creditable coverage before you enrolled in your Medigap plan. For example, if you had creditable coverage for 5 months before enrolling, you may be eligible to skip 5 months of your waiting period.
If you had creditable coverage for 6 months or longer before enrolling in a Medicare Supplement plan, the provider may not impose a waiting period at all and must cover all pre-existing medical conditions as soon as the policy coverage period begins. However, if there was a gap of more than 63 days before you purchased your Medicare Supplement plan, the insurer may still impose a waiting period.
Medigap Plan Options
| Benefits | Plan A | Plan B | Plan C | Plan D | Plan F | Plan G | Plan K | Plan L | Plan M | Plan N |
|---|---|---|---|---|---|---|---|---|---|---|
| Part A coinsurance and hospital costs for up to 365 additional days after Medicare benefits are disbursed | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Part B coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | 100% coinsurance; but copays may still apply |
| Part A hospice care coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part A deductible | Not covered | Yes | Yes | Yes | Yes | Yes | 50% | 75% | 50% | Yes |
| Part B deductible | Not covered | Not covered | Yes | Not covered | Yes | Not covered | Not covered | Not covered | Not covered | Not covered |
| Part B excess charge | Not covered | Not covered | Not covered | Not covered | Yes | 100% | Not covered | Not covered | Not covered | Not covered |
| Out-of-pocket limit | N/A | N/A | N/A | N/A | N/A | N/A | $6,940 in 2023 | $3,470 in 2023 | N/A | N/A |
| Blood (first three pints) | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Skilled nursing facility care coinsurance | Not covered | Not covered | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Foreign travel exchange up to plan limits | Not covered | Not covered | 80% | 80% | 80% | 80% | Not covered | Not covered | 80% | 80% |
Comparing Medigap Policy Options
Medigap policies are issued by private insurance companies, but they are also standardized. These policies must follow both federal laws and state regulations, which are designed to protect the consumer.
In many states, the plans are identified by the letters A through N. Although they’re offered by dozens of different insurers, plans of the same letter generally have the same basic coverage regardless of the insurer. The primary difference is the premium cost and nuances of coverage. In Massachusetts, Minnesota, and Wisconsin, Medicare policies are standardized differently.
When choosing a Medicare Supplement Plan, it’s important to understand your options and how they compare to your individual healthcare needs, your budget, and your state’s regulations. Weighing all these considerations can help you choose the appropriate plan for your health care routine.