Medicare Supplement (Medigap) Insurance
Some important considerations when shopping for a
Medicare Supplement policy:
Consider Your Alternatives -
on your health care needs and finances, you may want to consider continuing the group
coverage you have at work, joining a managed care plan, buying a Medigap policy, a
long-term care insurance policy or a specified disease policy.
Pre-Existing Conditions -
evaluating a policy, you should determine whether it limits or excludes coverage for
existing health conditions. Many policies do not cover health problems that you have at
the time of purchase. Pre-existing conditions are generally health problems you saw a
doctor about within the 6 months before the date the policy went into effect. If you had a
health problem, the insurer might not cover you for expenses connected with that problem.
Medigap policies, however, are required to cover pre- existing conditions after the policy
has been in effect for 6 months. Some companies have shorter waiting periods before
covering a pre-existing condition.
Replacing Existing Coverage -
careful when buying a replacement Medigap policy. Make sure you have a good reason for
switching for one policy to another - you should only switch for different benefits,
better service, or a more affordable price. On the other hand, don't keep inadequate
policies simply because you have had them for a long time. If you decide to replace your
Medigap policy, you must be given credit for the time spent under the old policy in
determining whether and to what extent any pre-existing conditions restrictions apply
under the new policy. You must also sign a statement that you intend to terminate the
policy to be replaced. Do not cancel the first policy until you are sure that you want to
keep the new policy. You have 30 days to decide.
Policy Delivery and Refunds -
insurance company should deliver a policy within 30 days. If it does not, contact the
company and obtain in writing the reason for the delay. Refunds should also be handled
promptly, should you request one. If 60 days go by without a response, contact your state
Prohibited Marketing Practices -
It is unlawful for a company or agent to use high pressure tactics to
force or frighten you into buying a Medigap policy, or to make fraudulent or misleading
comparisons to get you to switch from one company or policy to another. Deceptive
"cold lead" advertising also is prohibited. This tactic involves mailings to
identify individuals who might be interested in buying insurance. If you fill in and
return the card enclosed in the mailing, the card may be sold to an insurance agent who
will try to sell you a policy.
State or Federal Government Affiliation -
Policies to supplement Medicare are neither sold nor serviced by the state
or federal governments. State insurance departments approve policies sold by private
insurance companies, but approval only means the company and policy meets requirements of
state law. Do not believe statements that insurance to supplement Medicare is a
government- sponsored program. If anyone tells you that they are from the government and
later tries to sell you an insurance policy, report that person to your state insurance
department or federal authorities.
This type of misrepresentation is a violation of federal and state law. It is also
unlawful for a company or agent to claim that a policy has been approved for sale in any
state in which it has not received state approval or to use fraudulent means to
approval. NOTE: If you believe that federal law has been violated, you may call
1-800-638-6833. In most cases, however, your state insurance department can offer the most
assistance in resolving insurance- related problems.