The Medicare birthday rule in several states allows anyone who has a Medicare Supplement to change their plan the month of their birthday or the month after with guaranteed issue.
This is the only insurance plan that requires underwriting if you are not within the first 6 months of your enrollment. After that, you must go through underwriting and could be denied coverage.
In Nevada, if you are after the 6 months on your current plan and want to change carriers you must go through underwriting and could be denied.
NAHU (National Association of Health Underwriters) local chapter is trying to change the law. We have talked to Mellissa Hardy and Keith Picard, both state legislators, and have agreed to sponsor this in their respective legislative bodies.
The other states that have this rule have had some minor rate adjustments but nothing significant to cause anyone to be concerned.
This is a good thing for all Nevadans who have supplements currently. It allows them the freedom of choice. Consider this; you are 68 and bought a supplement when you turned 65. As typically happens, you have developed an illness that would cause you to be denied coverage if you applied for different coverage. So, you are stuck with the coverage you bought when you turned 65 and will have no choice but to pay the annual increases or lose your coverage.
This change in Nevada state law will allow seniors the flexibility of choice where currently they do not have it. Too many supplement companies raise their rates annually because they can. Hopefully, this change will cause them to consider client loss due to excessive rate increases. Suppose you get a 5% rate increase annually for 5 years, which means your rate increase is over 25%. If your initial premium was $200, after 5 years that monthly premium is now over $230 per month. Seniors on fixed incomes cannot afford to keep those policies and end up with something of lesser cost and benefits. Not a good situation for seniors.
This proposed change in Nevada law would allow seniors the choice of changing like plans with lower monthly premiums. Medicare supplements are the only insurance in the country that requires underwriting to change plans. All other insurance is guaranteed issue. Why not supplements?
We will keep you updated as this develops.
Len Barend, broker
The Barend Agency Inc.