For many years California law has allowed Medicare beneficiaries to switch Medigap policies without health underwriting for no less than 30 days following their birthday. Their choices are limited to another Medigap with same for fewer benefits.
California law was expanded by SB 407 (Monning) in 2019. The effective date of the changes made by SB 407 is January 1, 2020. This legislation made the following changes to the birthday rule:
- The 30 day window to replace a Medigap was expanded to at least 60 days
- If extra benefits have been added to a Medigap by an insurer, in addition to the standardized benefit package A through N, those extra benefits must be ignored when determining whether one Medigap has greater benefits than an existing Medigap
- The premium attributed to any extra benefits added to a standardized Medigap benefit package must be shown as a separate line item on an insurer’s premium billing.
- The Department of Insurance (CDI) and the Department of Managed Health Care (DMHC) must issue, on or before July 1, 2020, guidance on the requirements added by SB 407. That guidance will be effective through December 31, 2022, or until the director and the commissioner promulgate regulations.
- Requires DMHC and CDI to collaborate with specified individuals and entities, including consumer group representatives, to develop and implement various policies and procedures related to the new requirements in the bill, such as standardizing new or innovative benefits added to a standardized Medigap benefit package and approved for sale.
California Health Advocates (CHA) has received information from some of its member HICAPs that one or more insurer has refused coverage under the new requirements, citing an effective date of July 2020.
This interpretation is incorrect, and DMHC has verified that the effective date of these new requirements is January 1, 2020. The July date applies only to the guidance that must be issued by DMHC and CDI, a date that may not be met due to the current situation and implications of the Corona virus.
Agents and brokers are encouraged to contact CHA at (916) 231-5110 or e-mail [email protected] with any questions about Medigaps and California law since our law is more expansive than federal law or the laws of many other states.