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Recent Changes to Medicare Supplement Law and Rules

Idaho’s laws and rules for Medicare Supplement policies have changed. The Idaho legislature approved legislation to provide additional options and consumer protections for Idaho seniors. The Idaho Department of Insurance (“the Department”) published a temporary rule on November 3 related to Medicare Supplement policies in accordance with Senate Bill 1143, signed by Governor Little on April 22, 2021. The rule proposed went through negotiated rulemaking as required. 

The rule, IDAPA 18.04.10, was published November 3 in the Administrative Bulletin Volume 21-11, and includes two major changes effective after February 28, 2022:

  1. Medicare Supplement policyholders may change their insurance company and/or plan annually regardless of health conditions during a 63-day enrollment period beginning on the policyholder’s birthday; and 
  2. Premium rates for new Medicare Supplement policies (including when changing insurance companies) will no longer be based on the age of the applicant. This is referred to as “community rating.”

The proposed rule also prohibits charging application fees, higher premium rates based on the method of payment, and other unfair trade practices.

It is important to know that current Medicare Supplement plans are guaranteed renewable, and current policies will continue unless a change is requested by the policyholder. These rule changes provide flexibility to current Medicare Supplement policyholders who wish to change their policy, but no change is required. After February 28, 2022, existing Medicare Supplement policyholders may choose to shop for comparable community-rated coverage starting the day of their birthday.

The Department hosted a public webinar on this topic on November 18, 2021. Presentation slides are available by clicking the following link Changes to Idaho’s Medicare Supplement Rules

The event is eligible for 1 Continuing Education Credit under course number 3196441. See the Department Calendar for more information.

Frequently Asked Questions About Changes to Idaho’s Medicare Supplement Rules

Senate Bill 1143, signed by Governor Little on April 22, 2021, revised key provisions of Medicare Supplement policy eligibility and rating. The Department has engaged in negotiated rulemaking regarding IDAPA 18.04.10 to implement the changes in the bill.

Community rating is a rating method for Medigap insurance that assigns a single rate to all ages and classes of individuals in the group, regardless of risk factors such as age or health.

It depends. While the birthday rule only applies to people with Medicare Supplement policies, there may be other guaranteed issue rights available for someone to purchase a policy without underwriting.

People eligible for Medicare for reasons other than age may be charged up to 150% more than people eligible for Medicare based on age. When beneficiaries reach age 65 their premium will be changed to the premium for those eligible for Medicare due to age.

The rule allows you to leave your policy and purchase a new policy of similar or lesser coverage. For example, if you have a Plan G, you may purchase a Plan G or any plan with fewer benefits. You cannot upgrade/increase benefits. You may purchase the new plan from any company offering policies in Idaho.

If you have a Medicare Supplement policy you do not need to do anything. Your policy is guaranteed renewable. Even if the plan is issue-age rated (most common rating in Idaho), you do not need to change plans and companies cannot force you to move to a community-rated policy. You do have the opportunity to review your coverage and purchase a new, community-rated plan without underwriting as part of the new guaranteed issue or “Birthday Rule.”

These changes do not affect current policyholders. Your policy is guaranteed renewable. Even if the plan is issue-age rated (most common rating in Idaho), you do not need to change plans and companies cannot force you to move to a community-rated policy. You do have the opportunity to review your coverage and purchase a new, community-rated plan without underwriting as part of the new guaranteed issue or “Birthday Rule.”

These changes do not affect people with Medicare Advantage plans.

Not because of this law change. Medicare Supplement policy premiums typically change annually due to the increasing cost of medical care, and that is expected to continue.

Companies submit their premium rates to the DOI for review. Factors that may affect premiums include your age when you took out the policy (if issue-age rated), health conditions, and tobacco use. Companies are not permitted to change premiums based on attained age.

During the new, guaranteed issue or “Birthday Rule,” you may choose similar or lesser coverage from the same company, or from another company without underwriting. The Birthday Rule gives current policyholders an annual, sixty-three day enrollment period beginning on the policyholder’s birthday.

These changes do not affect beneficiaries with Prescription Drug Plans, unless they also have a Medicare Supplement policy. If you have a Medicare Supplement policy you do have the opportunity to review your coverage and purchase a new, community-rated plan without underwriting as part of the new guaranteed issue or “Birthday Rule.”

Plan F will not go away for anyone eligible for Medicare before January 1, 2020. If you have a Plan F, you may purchase a Plan F or lesser coverage, such as Plan G or any other letter plan, during the annual guaranteed issue (“Birthday Rule”) starting the day of your birthday.

“Dead-pooling” refers to an unfair trade practice where consumers are locked into their current plan while their insurance company offers a new plan to new consumers. The law change provides consumers the option to annually change their insurance company, regardless of any health conditions.

Idaho Medicare Supplement rules permit insurance companies to pay commission to agents for the sale of Medicare Supplement policies. The rule ensures commissions are paid regardless of the age of the policyholder, guaranteed issue status of the policyholder, or any other such bases.

The rule changes do not impact the Medicare Supplement Open Enrollment Period or existing guaranteed issue opportunities available to consumers. Contact SHIBA or a licensed agent for more information about your options.

Requests for additional information or other inquiries regarding the rule changes can be directed to Shannon Hohl at 208-334-4315.

For information about Medicare call the SHIBA Medicare Helpline 1-800-247-4422.

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