High Medical Denial Rates – Not in Medicare

A story  in USA TODAY in September 2011 highlighted excessive denial rates for individuals who apply for health insurance. It reports that denial rates of 20% are the norm, and that some companies in some states deny policies 40% of the time, and some companies have even higher rates. These denials are mostly for medical reasons.

But with Medicare not to worry. As long as you meet the criteria for eligibility (for seniors, this is usually just age 65 and having 40 quarters of Social Security coverage; all the rules are in Chapter 1 of Managing Your Medicare) you will get Medicare. There is no “medical underwriting” for seniors to see if you have any health problems. If you meet the eligibility criteria, you get Medicare. And you get it in full with no “waiting period.”

And this is true of any part of Medicare. So, for example, if you apply to join a Part C Medicare Advantage Plan (that is, a managed care organization), they can’t deny you membership for any health reason (with the sole exception that you can’t have end state renal disease). And a Part D drug plan, if you apply, can never deny you for medical reasons.

And basically, if you want to purchase a Medicare supplement policy (these are usually called Medigap policies) during you Medigap open enrollment period, you have a guaranteed issue right to one. A company which sells policies in your state must sell you any policy they offer, and can’t charge you more if you have health problems. They can, however, restrict your coverage for up to six months for a specific preexisting condition. (And in some states, they can’t even do this.) And if you have had good health insurance in the months before you get a Medigap policy, this restriction must be reduced by the number of months you have had it.

So basically seniors going on Medicare don’t have to worry about the high medical denial rates reported in USA TODAY.


Keywords: High Medical Denial Rates Medigap Medicare Entitlement


Originally Posted 09-13-11