Elderly shielded from insurance abuses


New York -- A wonderful new law recently took final effect that should save older people from predatory health-insurance salespeople. It affects Medicare Supplement Insurance, commonly known as Medigap. These policies, sold by private insurers, pick up certain doctor and hospital bills that are not covered by Medicare.

In the past, a small group of ruthless insurance agents sold multiple policies to worried elders. The buyers mistakenly thought that the extra coverage meant more security. But where there's duplicate insurance, only one policy normally pays -- so all the extra premiums were wasted.

The new law establishes 10 standard Medigap contracts, developed by the National Association of Insurance Commissioners. They have letter names, from Policy A to Policy J, and each of them provides the basic benefits you need. Policy A pays basic benefits only. The rest include various mixes of extras, like

home-health care and some reimbursement for prescription drugs.

The states decide which of the policies can be sold within their borders. From these, the insurers can choose the ones they want to offer (although all Medigap carriers have to offer Policy A). This greatly simplifies your buying decision. Each company's products are now alike, so

they're competing solely on service, reliability and price.

One major change occurred last November, but many seniors (or soon-to-be-seniors) aren't aware of it yet. For six months after you turn 65, you cannot be turned down for Medigap coverage -- at regular prices -- even if you're sick. Insurers can put off covering your pre-existing illnesses for up to six months, but they have to accept you.

Once that six-month window has passed, however, insurers are free to turn you down. So be sure to join while you know you still can.

Robin Talbert, assistant manager of consumer affairs for the American Association of Retired Persons (AARP), advises people with health problems to use their window to buy a policy with a lot of extras, like home-health benefits or coverage for prescription drugs. The AARP takes all comers into seven of its Medigap plans, at all times. But after the six-

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month window closes, applicants in poor health may be turned down for the three AARP plans that offer coverage for prescription drugs.

What if you work past age 65? You still get a six-month window for buying policies regardless of health. The clock starts running from the time you first register for Medicare Part B (which pays a portion of your doctor bills).

It's newly illegal for a company to sell you duplicate policies. Before making the sale, the agent has to ask if you already have Medigap insurance. If you do, he's supposed to make a detailed comparison between the old policy and the new.

It's also illegal to sell Medigap to someone on Medicaid, because Medicaid already covers these bills.

It's easier to switch policies under the new law.

If you've already had a six-month waiting period on your present Medigap policy, your new insurer has to cover your pre-existing illnesses from day one. It cannot put you in limbo for another six months. That's great, for people in good health who discover a better insurance policy. But insurers may now be more reluctant to accept anyone with a hint of an ailment. So it's all the more important to choose a good policy the first time around.

Although benefits are now the same from company to company, you'll find differences in service and price.

Some insurers give a cut rate to couples who buy two policies, says Susan Polniaszek, director of national services for the United Seniors Health Cooperative in Washington.

Some charge less in the year you buy but raise premiums steeply for older people -- so check policy prices at older ages as well as at your current age.

Some pay claims more quickly, or offer a toll-free number, or have a stronger solvency rating.

Look at safety first and then at price. In any state, you may find a policy several hundred dollars a year cheaper than the most expensive brand.

Washington Post Writers Group

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