Medicare Supplement Underwriting: Are You Eligible to Buy a Medigap Policy?

In most states, once you are beyond your first six months on Medicare Part B, you usually have to answer a list of health questions and provide a list of your medications on a Medicare Supplement/Medigap application.

Then, that application is sent to an underwriter at the insurance company who determines whether or not you are eligible to purchase a Medicare Supplement. This can be a nerve-wracking experience, but it doesn’t have to be.

In this video, we’ll go through what kinds of questions are asked on Medigap applications, which medical conditions are likely to result in a denial, which medical conditions are not a problem for Medicare Supplement applications, and the situations when you don’t have to go through underwriting at all to purchase a Medigap policy. 

Confused about your Medicare coverage options? Watch our free video: How to Find the Best Medicare Coverage Without Paying More Than You Need To… ​

Medicare Supplement Open Enrollment Period

Your first six months on Medicare Part B are your Medicare Supplement Open Enrollment Period. During this time, you are able to purchase any Medigap policy sold in your state without having to answer any health questions.

So the first question is: why would you be purchasing a Medicare Supplement policy once you are past your first six months on Medicare Part B?

There are many reasons why this happens. People successfully go through underwriting to purchase Medicare Supplement policies all the time.

If you’ve had a Medigap policy for a few years, and the rates have gone up, you might be applying to purchase a new Medicare Supplement with the same level of coverage for a lower monthly premium. 

​Or you might decide to change Medicare Supplement coverage: from a Plan F to a Plan G, or from a High Deductible Plan G to a Plan N, to give just a couple examples.

Or you may have been in a Medicare Advantage plan and switched back to Original Medicare Parts A and B and want to add Medigap coverage.  

What kinds of questions are asked on the application?

Every insurance company has slightly different health questions. This is to your advantage when working with a Medicare plan broker. Your broker can compare the questions from several different companies to find the one most likely to accept your application.

The health questions are usually very straightforward. The notes and instructions on the application tell you if your medical conditions will result in the application being declined. If that’s the case, you know before even completing the application that applying to that particular company would be a waste of time.

With some health conditions, the Medigap company will consider your application, but it does have to be sent to an underwriter who may call you or your medical provider for more information in deciding whether to accept your application. 

What medical conditions lead to an application being declined?

As mentioned earlier, every insurance company has different applications, but in general the following conditions are likely to result in an application being declined.

1. Necessary medical treatment that hasn’t been performed yet. This is a knockout question for most companies. If your doctor has told you that you need surgery, testing, or treatment for a medical condition, finish your testing and treatment first before applying for a Medigap policy.
   
2. Currently hospitalized, confined to a bed, in a nursing facility or assisted living, or receiving home health care. If you fall into any of these categories, you will most likely be declined. If your situation is temporary, you may be able to pass underwriting once all treatment is done and you are completely recovered.
   
3.  Currently being treated for internal cancer. Usually, insurance companies will decline your application until you have been cancer-free for two years. There is some variation depending on the type of cancer from one company to another.
   
4. Recent medication changes. These may or may not be a problem, depending on the medication and the insurance company. If your medications have been the same for more than 2 years, you shouldn’t have an issue. However, if your medical condition is not under control and your doctor is still trying to find medications that will work for you, that may lead to a decline.
   
5. Serious, chronic conditions. Again, each company varies slightly, but if you have any of the following conditions, you are unlikely to pass underwriting for a Medigap policy: rheumatoid arthritis, insulin-dependent diabetes with cardiac conditions, MS, AIDS, osteoporosis with fractures, COPD and other severe lung disorders, dementia, Parkinson’s disease, ALS, serious heart problems (heart attack, stroke, TIA, stent placement, valve replacement, pacemaker, congestive heart failure), kidney failure, and organ transplants other than corneal transplants.

Which medical conditions are generally not a problem for Medigap underwriting?

1. High blood pressure and cholesterol. Unless these conditions are severe and require far more than the usual medication to control, they aren’t a problem for passing Medicare Supplement underwriting.
   
2. Osteoarthritis. While rheumatoid arthritis is a declinable condition, osteoarthritis is not. An exception to that is if you need a joint replacement that hasn’t been performed yet.
   
3. BMI. Medigap applications do ask for your height and weight, but underwriting is usually pretty lenient. As long as you are not seriously obese, a high BMI won’t result in your application being declined.
   
4.  Type 2 diabetes not requiring insulin. If you are taking medication for Type 2 diabetes but don’t need insulin, and don’t have any cardiac complications, you can pass underwriting.
   
5. Mental health medications. If you take prescriptions for anxiety or depression, you can pass underwriting provided you have not had to receive inpatient mental health care.
   
6. Some types of cancer. If you have certain types of cancer, you can be approved for coverage from some Medigap insurers. This varies from one company to another, so ask a broker to research options for you if you find yourself in this situation.

Underwriter phone calls and medical records checks

As part of the underwriting process, your underwriter may call you to confirm the answers you gave on the application. It’s important to both fill out the application honestly and respond to underwriter questions accurately and honestly. On the application you agree to give underwriters access to your medical records, so any discrepancies will easily be found.

The underwriter is only allowed to ask the same questions that were asked on the application. Keep responses simple and short. Sometimes Medicare Supplement applicants say far too much on underwriter phone calls and end up being declined based on information they gave that the underwriter didn’t request.

Once my application is in underwriting, can I assume I’m approved?

No. Do not assume your Medicare Supplement policy has been approved until you have written confirmation of that.

Underwriting can take up to three weeks. During that time, do not cancel your current coverage, in case your application is eventually declined.

If you are approved, you will receive a policy or ID number and your policy, either electronically or in paper form. Once you have that, it’s safe to cancel your other coverage.

If you are replacing a different Medicare Supplement, your old policy will not automatically be canceled. You need to contact your old insurance company and request the cancellation.

What if my application is declined?

That’s not the end of your options. Every company handles underwriting differently. There may be another company that will accept you.

If your application is declined, the underwriter can tell you what issue caused the application to be declined, and then your broker can look for a Medigap company that may be more accepting of whatever it was that the first company could not accept.

In some areas, there are guaranteed issue companies, which accept everyone who is 65 or older and has both Medicare Parts A and B.

Another option is to keep your current coverage until the Annual Enrollment Period begins in October and then look at Medicare Advantage plans in your zip code.

Are there times when you can switch Medicare Supplements without having to answer health questions?

Yes. There are guaranteed issue situations when you can purchase certain Medicare Supplement policies without having to answer health questions.

Examples include leaving a group employer plan, moving away from the service area of your Medicare Select or Medicare Advantage plan, or if you tried a Medicare Advantage plan for the first time and chose to return to Original Medicare in the first 12 months.

There are also state specific laws that allow bypassing underwriting. In Washington state, you can switch from a Medigap Plan A to another Plan A or from a Medigap Plan B-N to another Medigap Plan B-N at any time without answering health questions or providing a list of medications.

Medigap underwriting can be somewhat stressful. It is much easier and more likely to succeed in you being approved when you have a knowledgeable, experienced broker on your side who knows the underwriting differences between companies and can help you find a plan that fits your needs and budget and is most likely to approve your application. 

If you have questions about your Medicare coverage, feel free to give our office a call at 877-312-1414 or schedule a free, no obligation Medicare Plan Consultation.