The Birthday Rule is a very important requirement to know if you have a Medigap policy or are approaching the age when you are eligible for Medicare.
Although Medicare is a federal program, in the state of California (and Oregon), Medigap enrollees have the benefit of a state law that allows you to change your Medicare supplement insurance with no medical underwriting, as long as this is done within 30 days before or after your birthday.
Known as the “Birthday Rule,” this law carries many benefits for Medicare policy holders, and is especially important to understand for those who have signed up for Medigap policies.
Below, we’ll outline:
- What Medicare supplemental insurance is
- How the Birthday Rule impacts Medigap
- Why it’s important for those who have Medigap policies
- What help is available to assist you with any questions about Medigap and the Birthday Rule
The Basics Of Supplemental Insurance
For the Birthday Rule to affect you, you must have a supplemental insurance policy to Medicare, otherwise known as Medigap or Medicare Gap. Supplemental insurance helps cover some of the costs Original Medicare insurance does not.
If you’re enrolled in an Original Medicare policy, Medicare will pay its share of the Medicare-approved health care costs first. Then, your supplemental insurance policy kicks in, paying the remaining portion that the policy covers. Examples of what Medigap policies cover include coinsurance, co-payments, deductibles and emergency foreign travel expenses.
Our article, A Guide To Medicare Gap Insurance, explains more about what you should know if you’re thinking about purchasing a Medigap policy. But, in relation to the Birthday Rule, you should know that the best time to purchase Medigap policies is during your open enrollment period.
This begins the month you turn 65 and enroll in Medicare Part B. There are no restrictions other than your age, even if you experience health problems. If you wait until after your open enrollment period, or decide to change your Medigap policy later, it can cost you more. Or worse, insurance companies that provide supplemental insurance can deny you altogether.
How The Birthday Rule Impacts Medigap
Here’s where the Birthday Rule becomes important. Once you enroll in a plan, on your birthday each year after, you should review your policy to see if there are other policies available that are lower in price.
That’s because this rule gives those living in California the option of changing their Medigap policies with no medical underwriting required. That means you will not have to answer any health-related questions. This can be done up to 30 days following your birthday, or in the 30 days leading up to your birthday. (However, the new policy only takes effect on your birthday or in the 30 days that follow your birthday.)
That means, just like with your open enrollment period when you first signed up for a supplemental insurance policy, an insurance carrier can’t deny you for having health issues.
There is one important rule to remember when taking advantage of the Birthday Rule: California law states that the new policy must have the same or lesser benefits as the old policy. In California, insurance companies must offer the same Medicare Supplement plan coverage, but each insurance carrier can charge different prices for the same policy.
For example, if you have Plan G, under the Birthday Rule, you can change to another plan IF it offers equal coverage or a lesser coverage level.
Why The Birthday Rule Is Important
Although you can change your Medigap plan at any point in the year (there is no restriction on this), if you attempt to make a change that’s not in the timeframe of the Birthday Rule, you will have to qualify medically for the policy.
That means if you have health conditions, you may be denied by an insurance company that offers Medigap policies. Under the Birthday Rule, you are guaranteed acceptance even if you would normally be disqualified because of a health condition.
The Birthday Rule also is important because it helps stimulate competition among the private insurance companies that offer supplement insurance. Competition can lower premiums, and give Medigap policy owners an opportunity to find something more affordable with the same level of coverage.
What Help Is Available
One of the biggest benefits of working with a licensed insurance agent is that your agent will continue to advocate for you and provide you with service even after you initially sign up for a Medicare policy and any Medigap policies.
This becomes especially important when your birthday comes each year and you have the opportunity to re-evaluate how much you pay for your supplemental insurance policies and the coverage they provide.
Because agents work with several different insurance carriers, they can provide you with options and several price points to consider. In doing this, their advice and services are free to you because they receive a commission paid by the insurance company.
A licensed insurance agent who is an expert in Medicare coverage can help you navigate the confusing nature of Medicare, make sure you don’t miss important deadlines, and ensure that if you do decide to change supplemental policies, that you still get the coverage you need to meet your specific needs.
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