Medicare Supplement Policies in Wisconsin
Medicare supplement insurance is where Wisconsin departs most from the lettered Medigap plans you studied earlier. Wisconsin sets its own benefit package, riders and sales rules in s. Ins 3.39, Wis. Adm. Code, adopted under s. 632.81, Wis. Stat., and the Commissioner approves no Medicare supplement that fails them. Because buyers are older and often unsure what Medicare already pays, the rule puts specific duties on you as the agent.
How a Wisconsin Medicare Supplement Is Built (s. Ins 3.39 (5t))
A Wisconsin Medicare supplement may provide “only the coverage set out” in the Wisconsin rule (s. Ins 3.39 (4t) (a) 1.). Instead of choosing among lettered plans, the buyer gets one standard core, Basic Medicare Supplement Coverage, and adds optional riders.
The benefits available depend on when the person first became eligible for Medicare Parts A and B: before June 1, 2010; from June 1, 2010, until January 1, 2020; or on or after January 1, 2020 (s. Ins 3.39 (3g)). People in the last group are “newly eligible,” and a policy sold to them may not offer a Medicare Part B deductible rider (s. Ins 3.39 (5t) (a) 1.).
The policy carries the designation MEDICARE SUPPLEMENT INSURANCE and a caption that ends: “Do not buy this policy if you did not get this guide.”
Basic Medicare Supplement Coverage
Every standard Wisconsin Medicare supplement includes, among other benefits (s. Ins 3.39 (5t) (d)):
- Hospital: Part A expenses from the 61st through the 90th day, lifetime reserve days, then an additional 365 days after Medicare hospital coverage runs out.
- Psychiatric hospital: at least 175 days per lifetime after Medicare’s inpatient psychiatric coverage is exhausted.
- Skilled nursing facility: coinsurance from the 21st through the 100th day.
- Part B: coinsurance after the Part B deductible.
- Blood: the first 3 pints.
- Home care: at least 40 visits per 12-month period.
- Preventive care Medicare does not cover: at least $120 a year.
- Wisconsin mandates: kidney disease treatment, diabetes supplies, chiropractic care, hospital and anesthesia charges for dental care, and breast reconstruction.
The last item is the Wisconsin difference: state mandated benefits are built into every basic policy, whatever riders the buyer chooses.
Optional riders
Each option is a separate, separately priced rider (s. Ins 3.39 (5t) (e)):
- Part A deductible rider: 100% of the Part A hospital deductible. A 50% Part A deductible rider pays half; an insured may not have both.
- Additional home health care rider: up to 365 visits per policy year.
- Part B copayment or coinsurance rider: the insured pays no more than $20 per office visit and $50 per emergency room visit, in addition to the Part B deductible.
- Part B excess charges rider: the gap between Medicare’s approved amount and the provider’s charge, up to Medicare’s limiting charge.
- Foreign travel emergency rider: at least 80% of billed charges for emergency care in the first 60 days of a trip, with a deductible of up to $250 and a lifetime maximum of at least $50,000.
Outside the enrollment windows described below, an insurer may underwrite a rider.
Insurers may also offer 50% and 25% cost-sharing plans, which share Medicare cost sharing up to an annual out-of-pocket limit, and a high deductible plan whose deductible is indexed each year (s. Ins 3.39 (5t) (g), (h), (k)). A Medicare select policy provides its coverage through a network of providers the insurer selects, and a Medicare cost policy covers services through the network of an insurer under contract with CMS (s. Ins 3.39 (3) (rm), (vm)).
Standards That Protect the Insured (s. Ins 3.39 (4t))
- Preexisting conditions: no waiting period longer than 6 months, and only for a condition treated or advised on within 6 months before coverage began (s. Ins 3.39 (4t) (a) 2.; s. 632.76 (2) (b)).
- Renewal: guaranteed renewable; cancelable “only for nonpayment of premium or material misrepresentation,” never for declining health. An HMO may also cancel if the insured moves out of its service area.
- Medicaid suspension: an insured who qualifies for Medicaid may suspend benefits and premiums for up to 24 months by notifying the insurer within 90 days. Coverage is reinstated if the insured gives notice within 90 days of losing Medicaid and pays the premium.
- Outline of coverage: given at application, with the applicant’s written acknowledgment.
- Right to return: 30 days from delivery, for any reason (s. 632.73 (2m)). The insurer mails the refund directly to whoever paid the premium (s. Ins 3.39 (24) (f)).
When an Insurer Must Accept the Applicant
Open enrollment. During the 6-month period beginning with the first month a person is enrolled in Medicare Part B, an insurer may not refuse a policy or rider, or charge more, because of health (s. Ins 3.39 (3r)). For someone enrolled in Part B before age 65, the window starts in the month they turn 65. An applicant with at least 6 months of continuous creditable coverage faces no preexisting condition exclusion at all.
For example, Dale’s Part B coverage begins March 1. From then through the end of August, any insurer selling Medicare supplements in Wisconsin must issue him a basic policy and any rider it offers, without charging more because of his heart condition.
Guaranteed issue. Certain events create a new right to buy without underwriting (s. Ins 3.39 (34)): an employer plan that supplements Medicare ends, a Medicare Advantage plan leaves the person’s area, or a person who joined Medicare Advantage on first becoming eligible at 65 leaves it within 12 months. Most of these windows close 63 days after the old coverage ends.
In either window, the application tells the applicant not to answer health questions (s. Ins 3.39 (23) (e)). Outside open enrollment, before issuing to an applicant 75 or older, the insurer must obtain medical evidence or agree not to rescind except for intentional fraud (s. Ins 3.39 (14t) (i)).
Your Duties When You Sell
At first contact. When you invite a prospect to apply, give them the Commissioner’s Wisconsin Guide to Health Insurance for People with Medicare and get a written acknowledgment (s. Ins 3.39 (11)).
On the application. The application states, “You do not need more than one Medicare supplement, Medicare cost or Medicare select policy.” On a form you sign, list every health policy you have sold the applicant that is still in force, and every one sold in the past 5 years that is not (s. Ins 3.39 (23)).
Appropriateness. Make reasonable efforts to determine whether a purchase or replacement is appropriate. A sale that leaves anyone with more than one Medicare supplement is prohibited (s. Ins 3.39 (25)).
Replacement. Before the policy is issued, give the replacement notice, signed by the applicant and you; the applicant and the insurer each keep a copy (s. Ins 3.39 (23) (c)). If the old policy was in effect at least 6 months, the new insurer credits time already served toward waiting periods (s. Ins 3.39 (27)).
Deadlines. Forward the application within 7 calendar days and premium within 7 days, and take no application more than 3 months before the person becomes eligible (s. Ins 3.39 (25)).
Compensation. First-year commission may not exceed 200% of the second-year commission, renewal commission must stay level for at least 5 renewal years, and a replacement pays no more than renewal commission (s. Ins 3.39 (21)). Moving seniors from policy to policy earns nothing extra.
Prohibited conduct. Twisting, high-pressure tactics and cold lead advertising are prohibited, as is discouraging anyone from complaining to OCI (s. Ins 3.39 (24)). “Medicare Supplement” and “Medigap” may describe only a complying policy. Advertisements are filed with the Commissioner before use, by the agent if they name no insurer (s. Ins 3.39 (15)).
Lesson summary
- Wisconsin Medicare supplements are Basic Medicare Supplement Coverage plus optional riders, not lettered plans.
- The basic coverage includes Wisconsin mandated benefits such as kidney disease treatment, chiropractic care and 40 home care visits.
- People newly eligible on or after January 1, 2020, cannot buy a Part B deductible rider.
- Preexisting limits are capped at 6 months, the policy is guaranteed renewable, and the buyer has 30 days to return it.
- Open enrollment runs 6 months from Part B enrollment; most guaranteed issue windows close 63 days after coverage ends.
- Give the Medicare guide at first contact, list prior sales, use the replacement notice, and never sell a second supplement.
- First-year commission is capped at 200% of the second-year commission, and a replacement pays only renewal commission.