Medicare: California Birthday Rules

I am an insurance broker in Henderson, NV, and have been selling Medicare to seniors for 17 years. I am also licensed in CA, UT, and AZ.

Recently, I was in discussion with another broker who recently moved from CA to NV. We were discussing to CA birthday rule as it applies to Medicare Supplement clients. In CA, the month before and the month of your birthday you can change your supplement plan to another equal plan from any insurance carrier without having to prove you are insurable. Variations of that rule exist in several states like OR, WA, MS, NY, and CT.

Essentially, the rules governing Medicare Supplements state that the first 6 months of your becoming eligible for Part B or your 65th birthday you can buy a Medicare Supplement without having to answer any medical questions. After those dates you must answer medical questions and you could be denied or rated up based on the answers to those questions.

Believe it makes sense to see if we could get a law passed in NV accomplishing the CA birthday rule.

As part of the National Association of Health Underwriters(NAHU) and the local Medicare Chair our committee has decided to pursue this to help all seniors in NV. As the chair I am merely facilitating this and am working with the committee to see that this happens.

There are many steps to make that happen and this blogger has decided to start the process. Began by contacting the larger insurance carriers offering Medicare Supplements and have gotten a favorable response from several, pending, of course, how the bill is written. Also contacted at least one local legislator and he/she seems interested in perusing this change in the law.

Of course, swimming upstream has its moments and considerations for the, insurance carriers, local legislators, and the Department of Insurance all must be appeased. Not an easy task, but one worth taking.

Many Medicare Supplement clients have plans that as they age are getting very expensive. Medicare Supplements in NV rise annually as you age. Another consideration is that CMS (which governs Medicare) changes plans about every 10 years and those discontinued plans premiums continue to rise as the population decreases. With no new enrollees the costs keep rising as the population ages until many on a fixed income can no longer afford. Plan J was discontinued about 10 years ago and the pricing has risen significantly over the past 10 years. The plan F which was just discontinued in 2019 will suffer the same fate in several years.

What one must try to understand is that MAPD plans are also run by private insurance but are subsidized by the federal government, so the government makes the rules on eligibility so unless you have an end-stage renal disease you qualify for any MAPD plan. Medicare Supplements are also private insurance, and not subsidized so the government has no say in the underwriting process, other than the qualifications medically during the first 6 months of eligibility.

Back to the process. First, we need to get several bi-partisan legislators to sponsor a bill. Not easy in this political climate but ultimately, I believe the legislators will come around and sponsor the legislation. Once that is done, we need to get the major insurance companies to agree to the legislation because the last thing we want is to have the legislation cause rates to rise exponentially. That has not happened in other states because the law was written properly so everyone wins.

If that all works, the legislation should pass in next year’s legislative session. Please hope this works and NV will have better medical options for our seniors. It is long overdue.

 

Len Barend, broker

The Barend Agency Inc.

702-250-2200 

len@insurance4unevada.com

www.insurance4unevada.com

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