If different states have different laws governing underwriting and who must be accepted, what happens, for example, to a NY resident who moves to PA or vice versa?
Question:
Question from Karen: I continue to faithfully read and appreciate all your posts. Thank you for all you do.
Your recent column about the costs of Supplement policies in states that require Supplement companies to accept all applicants without medical underwriting raised some questions for me.
I thought that Supplement policies purchased in any state provided coverage nationwide, but I’m wondering how this works if different states have different laws governing underwriting and who must be accepted? What happens, for example, to a NY resident who moves to PA or vice versa? This is more than a theoretical question as we have a relative currently considering a move and want to be sure of what rules will govern her AARP Supplement.
Answer:
Answer: The individual laws and regulations governing Supplements and Supplement insurance companies in different states, including those who are forced to accept everyone such as New York, Connecticut, and Massachusetts, have no bearing on access to doctors and hospitals. Even when someone moves from one of those states to another who does allow companies to use underwriting and deny people with certain pre-existing conditions, access to medical providers doesn’t change. All Supplements provide coverage at any medical provider that accepts Medicare Assignment. This is the case regardless of what state it was purchased in, company that issued the policy, and letter plan (C, F, G, N, etc.) someone has. No state can override this regulation and several others when it comes to Supplements.
It’s also important to understand and remember that doctors, hospitals, and labs don’t bill Supplement companies. They only bill the primary insurer, Medicare, who then coordinates with the Supplement company to get the provider paid in full minus any cost sharing such as the Part B deductible or a co-pay on Plan N. This is yet another reason why the company you buy a Supplement from doesn’t matter. Too many people get caught up in the name and logo, getting a false sense of security that they’re protected better with those that are well known. This is often a very expensive mistake that too many people make.
However, there is something interesting and important that can vary from company to company as far as what happens when someone moves from state to state. Karen’s relative, who is considering a move to Pennsylvania from New York, where Supplements are expensive due to the “Guaranteed Issue” law, may get some good news if she does indeed change her residence. This is because some companies, including AARP, allow/force people to take on the rate in the new state they move to. In the case of Karen’s relative, I say “allow” because doing so will result in her premium being reduced by well over $100 per month with no underwriting required! However, I also said “force,” because people who move from states with lower premiums to another with higher premiums will have their premiums increased. We’ve had many clients who moved from Pennsylvania to Florida and had their premiums go up over 200%!
There are companies like HealthSpring (formerly Cigna), on the other hand, who we’ve written more policies with than any other in the last 18 months, who allow people to keep the premium from the state they originally purchased the policy. Pennsylvania has some of the lowest Supplement premiums in the country so we ask clients if they plan on moving out of state in the future before deciding what company we’re going to recommend. If they say it’s possible or likely, and the move might be to Florida or another higher cost state, we want to write them with a company like HealthSpring, even if they’re a bit more expensive at inception because it protects them from getting huge rate increases upon relocating.
Taking these types of considerations and other intricacies into account when helping clients choose the best possible plan is what separates well versed, well trained, and experienced agents at The Health Insurance Store from others.
So do the services we provide after the enrollment process has been completed and the policy issues. These includes getting involved and making calls directly to Medicare, insurance companies, medical providers or pharmacies, etc., on client’s behalf if there are ever issues with premiums, questionable bills, unexpected prescription costs, claim denials, and anything even remotely related to their policies. We also determine clients’ qualifications for state and federal programs such as PACENET, Part B premium assistance, Medical Assistance, “Extra Help,” among others and then assure the application is submitted correctly and approved.
We take great pride in looking out for every client the same way we would our own parents! There also is never a fee for our advocacy services or a consultation.
If you have any questions, give us a call at the office, 724-603-3403 or email me personally, Aaron@GetYourBestPlan.com.