Key Points:
Switching Medicare Supplements Can Save You Money While Maintaining Great Coverage
Your Medicare Supplement Company Doesn't Matter For Coverage Decisions
You Can Switch Medicare Supplements Year Round But Have To Go Through Underwriting
Some States Are "Guaranteed Issue", Meaning Companies Can't Deny You For Pre-Existing Conditions
We have helped thousands of people with their Medicare, and one of the most common ways people overspend is with their Medicare Supplements. These policies are amazing, but they can be pricey. Your premium is likely to rise each year due to your age or the health of your community. And by the time you are 70 or 75, your monthly budget could be hurting.
How do you maintain the coverage you love while keeping costs manageable?
NJ Life and Health has helped thousands of people switch their Medicare Supplements throughout the years, and in this article, we’ll outline what you should expect. Let’s dive into it.
Your Medicare Supplement Company Doesn’t Matter
Before discussing how to switch Medicare Supplements, we have to clarify something: The Medicare Supplement company you choose doesn’t matter when it comes to coverage. Many people don’t believe this, but it is true. This is because when you have a Medicare Supplement, Original Medicare is your primary insurance.
It is Original Medicare that determines your networks and your covered procedures, and it is Original Medicare that processes the majority of your bills.
Your Medicare supplement doesn’t have any say in any of these decisions. If Original Medicare covers it, your supplement must also cover it, regardless of the company. The only difference between all the insurance companies is their monthly premiums. The plans themselves are federally standardized, and the insurance companies cannot vary what the plans cover.
We like to say a Medicare Supplement is like a jar of Skippy peanut butter. You can get a jar of Skippy peanut butter at Shop-Rite, Wal-Mart or CVS, and the price is going to vary. But it’s still the same jar of Skippy peanut butter. The contents of that jar are the same. Just the price is different. The same is true of Medicare Supplements. If you have a Plan G, it’ll be the same no matter what company you get it from. It doesn’t matter if it’s from Company A or B; the coverage and the deductible will be the same. If Company A charges $50 more monthly for a Plan G than Company B, it can be worth looking into switching to Company B to save money each month.
Will My Doctors Take My New Medicare Supplement?
Even after we tell clients that the Medicare supplement company they choose doesn’t matter – and that it’s the specific PLAN they choose that matters -- they often ask, “Will my doctors take my new Medicare Supplement?” The answer to that is that if they take Original Medicare, they absolutely will! Any doctor who takes Original Medicare is compelled by law to take every type of Medicare Supplement and every insurance carrier that offers them.
And here’s a very important point to remember: Even if a doctor typically doesn’t take insurance from Company A, they still have to take a Medicare Supplement from Company A.
Let’s repeat that...
Even if a doctor typically doesn’t take insurance from Company A, they still have to take a Medicare Supplement from Company A.
If you call a doctor’s office and are told that they don’t accept XYZ Insurance (your supplement), remember that with Original Medicare as your primary, that doctor is compelled to accept your supplement, regardless. Original Medicare is your primary, and your Medicare Supplement is just helping pay your bills.
How to Switch Medicare Supplements
We have good news: You can switch Medicare Supplements year-round! However, you must go through underwriting in most states to switch your Medicare supplement.
Underwriting is the process of an insurance company determining if you are healthy enough to switch to their insurance. They will start by asking you health questions, and if you pass all of them, they will check your medical records for accuracy. If you have only a few minor health issues, chances are you can switch. Companies tend to look for recent instances of more serious conditions such as cancer, severe heart issues, kidney disease, and more.
Some common situations we see most insurance companies flag include:
· Having a surgery scheduled or recommended that hasn’t been performed yet
· Being in a nursing home or needing help with the Activities of Daily Living (eating, toileting, etc)
· Kidney Disease that requires dialysis
· Cancer
· Lung Conditions such as COPD and Emphysema
· AIDS/HIV
· Alzheimer’s or Dementia
· MS or ALS
Most companies will want to know that you haven’t had these conditions in the last 2-5 years, and some will deny you if you have had some of these conditions at any point. Each company has its own standards for who they will take. One company may have strict standards for diabetes, while another may not. One company may automatically decline people with depression, while another may not care. Talk to the brokers at NJ Life and Health to discuss your health and see which companies may be a good fit.
How Long Does Medicare Supplement Underwriting Take?
Underwriting times vary depending on the company. Some companies have instituted automated on-the-spot decisions. They can tell you within 5 minutes if you are approved or denied. Others may request an interview where they ask you questions about your health. Some companies will thoroughly review your medical records to determine if you can switch, which can take a week or two.
I Got Denied Trying to Switch Medicare Supplements
If you apply for a Medicare Supplement, there is always a chance you will get denied. But don’t fret. There may be some options.
In many cases, you can try a different company. Our clients will often first try to switch to the Medicare Supplement company with the lowest monthly premium. The problem is that the companies with the lowest premiums tend to have the highest standards for underwriting. Meaning, it is harder to get into these companies if you have health issues. If the lowest-cost company denies you, you can try another company with a slightly higher cost. They may be more lenient. You can still save money, but it may be less than you had hoped.
You also may have to wait. For instance, if someone has had cancer in the last two years, we won’t even put the application in because we assume it will be denied. We will, however, set a date in the calendar exactly two years from the date they were deemed cancer-free. It may be six months or 12 months, but we always set a goal. Once two years have passed, chances are we have a good shot at switching their supplement. The same holds if you have surgery coming up. Once the surgery is completed and you have been cleared of any future procedures, you can potentially switch Medicare Supplements then.
When Can’t I Switch Medicare Supplements?
If you currently have some of the more serious chronic conditions that we listed above, you may not be able to switch at all. If you have AIDS/HIV, Dementia, or Kidney Disease requiring dialysis, you most likely can’t even apply because of an expected denial. While this can be unfortunate, you can take comfort in knowing that your current Medicare Supplement will never lapse as long as you pay the monthly premium. Even if the premium is high, you are probably getting more than your money’s worth.
Switching Medicare Supplements In Guaranteed Issue States
Some states, such as New York and Connecticut, are “Guaranteed Issue” states. Companies must automatically accept you when you apply for a Medicare Supplement. They cannot deny you based on pre-existing health conditions. While this is great for people with serious health issues, it does raise the average price of a Medicare Supplement.
There also may be a “waiting period” for your coverage to start when you switch. While they can’t deny you based on pre-existing health conditions, they may be able to not pay any claims during the first few months of a policy. In New York, for instance, a 6-month waiting period is allowed on pre-existing conditions when someone switches Medicare Supplements: (https://www.dfs.ny.gov/consumers/health_insurance/information_for_medicare_beneficiaries).
Be careful when you switch and read the fine print.
What’s Next?
Talk to the brokers at NJ Life and Health to see if switching supplements makes sense. We can give you quotes to see if now the time is to switch and guide you through the process.
We also work with you for life and check in every year to see if there is a lower-cost Medicare Supplement for your specific health needs.
You can call our Toms River, NJ office at 848-226-6897 to review your options.
You can also visit our website at www.njlifeandhealth.com to schedule your no-cost Medicare consultation.
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