March 6, 2009, Newsletter Issue #169: What are my rights when purchasing Medigap insurance?

Tip of the Week

Shopping for a Medigap policy in the past used to be difficult experience. Today, there is a list of federal and state regulations that have standardize Medigap practices and provided consumer protections. Some of the more important ones include a Federal law which requires that all Medigap plans, A through L, must cover the exact same things regardless of what company you purchase the plan from and regardless of which state you live in. Other state laws can restrict which of the 10 plans are available for sale in their states.

Of the plans available to you in your state, all must be guaranteed renewable, which means the plans automatically renew as long as you pay your monthly premium on time. Your plan cannot be cancelled, and you cannot be forced to "reapply" for coverage. State and federal law also guarantee that for six months from the time you are at least 65 years old and enrolled in Medicare Part B, you can purchase a Medigap policy of your choice regardless of your health.

By law your insurance company is required to deliver a written copy of the policy within 30 days of purchase. Once you have received the written policy, you are guaranteed a 30-day "free look" period. During that period if you decide you wish to cancel the plan for any reason, you can do so and receive a full refund of any premiums paid. However, if you switch insurance companies, the new company must waive any waiting periods for pre-existing conditions that you met under your old policy. If your new plan has benefits for which you have not met a waiting period under your old plan, a waiting period for pre-existing conditions may be applied to that benefit(s).

It also against the law for an insurance company to sell you more than one Medigap policy unless you provide written notice of your intention to cancel the first policy. This is to avoid scams that separate senior citizens from their money by confusing them with the nuances of the 10 Medigap plans--something that once was a common practice. As for doctors, effective in 1993, doctors are not allowed to charge Medicare recipients more than 15 percent above the amount allowed by Medicare. That means that if you go to a doctor who does not accept Medicare insurance and you receive a service for which Medicare's allowed amount is $100, the doctor cannot charge you more than $115 for that service. These are just a few highlights, but there are more regulations and that apply to Medigap policies.

If you have any questions or suspect you may have been the victim of insurance fraud, contact Medicare at 800-633-4227.

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