Medicare and Medigap Coverage Terminology

The federal Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) legislation and corresponding requirements under s. Ins 3.39, Wis. Adm. Code, regarding Medicare supplement coverage include terminology that has specific meanings when applied to Medicare beneficiaries or Medigap insurance policies. These terms include open enrollment period, special enrollment period, guaranteed issue, and creditable coverage.

Medicare legislation and s. Ins 3.39, Wis. Adm. Code, provide that Medicare beneficiaries are entitled to an "open enrollment" period during which they can apply for supplemental coverage. "Open enrollment" is defined as:

A one-time-only six-month period when Medicare beneficiaries in Wisconsin may buy any Medigap policy they want that is sold in Wisconsin. It begins the first month that a Medicare beneficiary is covered under Medicare Part B and is age 65 or older. During this period, the Medicare beneficiary cannot be denied coverage or charged more due to past or present health problems.

Medicare legislation allows and s. Ins 3.39, Wis. Adm. Code, provides that Medicare beneficiaries under age 64 are entitled to a "special enrollment" period during which they can apply for supplemental coverage. This "special enrollment" period is defined as:

A six-month period during which Medicare-eligible beneficiaries under age 64 may buy any Medigap policy they want that is sold in Wisconsin. The special enrollment period begins with the first month in which individuals first enroll for benefits under Medicare Part B.

Medicare legislation and s. Ins 3.39, Wis. Adm. Code, provide for guaranteed issue of Medigap coverage when individuals lose their employee welfare benefit plan, Medicare Advantage plan or Medicare supplement coverage. "Guaranteed issue" is defined as:

Rights Medicare beneficiaries have in certain situations when insurance companies are required by law to sell or offer a Medigap policy. In these situations, an insurance company cannot deny insurance coverage or place conditions on a policy, must cover the Medicare beneficiary for all pre-existing conditions, and cannot charge more for a policy because of past or present health problems.

Medicare legislation and s. Ins 3.39, Wis. Adm. Code, provide that Medigap policies are guaranteed renewable. "Guaranteed renewable" means:

A right that requires Medigap insurance companies to automatically renew or continue a Medigap policy, unless the applicant for coverage makes untrue statements to the insurance company, commits fraud or does not pay premiums.

Medicare legislation and s. Ins 3.39, Wis. Adm. Code, provide that individuals should be given credit for previous health coverage when moving from one employer group health plan to another, or from an employer group health plan to an individual policy. This is the concept of creditable coverage. Individuals who have outpatient prescription drug coverage under their Medigap policies that is at least as good as the new Medicare drug benefit have creditable coverage and therefore can enroll in Medicare Part D after the open enrollment period with no delayed enrollment penalty. "Creditable coverage" means:

Prior health care coverage that is taken into account to determine the allowable length of pre-existing condition exclusion periods for individuals seeking Medigap insurance coverage. For the purpose of Medicare Part D, coverage is considered creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with Centers for Medicare and Medicaid Services (CMS) actuarial guidelines.