Med Supp Lapse

[bill3173]

Had a client that ignored lapse notices and a couple of calls from me to pay their premium. Claimed that they had paid, etc. Anyway, they realized a week after they received their final notice, that they had not paid it.

Curious if the carriers' usually reinstate in these cases. I don't think I've ever had one, with a med supp lapsing for non payment, unless it was intentionally being dropped.

I did have the same person do this with their part d, and ended up with a penalty..same scenario. I called and they refused to pay until they received notice from the carrier that they had been dropped. Had to wait til AEP.

 

[somarco]

@bill3173 over the years I have had a few Medigaps lapse due to non-payment of premium . . . including one where the client was in the hospital for a month+ and his policy went 60 days past the due date.

He had to sit out for a year before applying for reinstatement.

I have had a few go 45 days past the due date and were reinstated without underwriting but once you go that far you will usually not get back in the club unless you can prove insurability.

I always encourage folks to pay by auto bank draft but some are stubborn.

Worst case was a lady who intentionally lapsed coverage because she was getting married and would be on her new husband's plan.

Problem was, after letting coverage lapse she was in a car accident . . . ran up thousands in medical bills and no insurance . . . then her fiance' cancelled the wedding leaving her without a husband, no insurance and thousands of dollars in unpaid medical bills.

 

[goillini52]

Problem was, after letting coverage lapse she was in a car accident . . . ran up thousands in medical bills and no insurance . . . then her fiance' cancelled the wedding leaving her without a husband, no insurance and thousands of dollars in unpaid medical bills.

OUCH!!!

 

[kak6407]

Depends on the carrier. I have had a client with UHC that had hers lapse and no payment for 90 days and they reinstated. This happened to her twice

 

[bill3173]

@bill3173
I have had a few go 45 days past the due date and were reinstated without underwriting but once you go that far you will usually not get back in the club unless you can prove insurability.

45 days is an enormous concession, on the carrier's part. Does this carrier do that for everyone, or was it based on health history?

 

[somarco]

45 days is an enormous concession, on the carrier's part. Does this carrier do that for everyone, or was it based on health history?

I can't say if they do it for everyone . . . but they did it for a few of my clients.

Last year a client who was always late in paying her premium, taking it to the bitter end of the grace period, was sick and missed over 2 months premium payments. Her sister (also a client) contacted me . . .


Bob,
I am sending this email on behalf of my sister. Carol is in a Physical Therapy Rehabilitation Center after a hospital stay. She does not have access to contact you as her phone does not work well there.She wanted me to ask you to renew her medicare supplement health insurance with the same plan she had last year


Sorry to hear about Carol.

Her coverage with XXXX lapsed on October 1 due to non-payment of premiums. I don't know if it can be reinstated or not.


The last correspondence was 11/10/2024. I gave the sister information about reinstatement and never heard any more. Today I checked and her policy is active.


Another carrier refunded 2 years premiums after it was discovered they were paying premiums to the "old" carrier as well as the new one.

Of course there was a charge back to me . . . Until the client contacted me I had no idea they had never cancelled the old policy.


I don't cancel policies for clients. Also don't make address or bank changes. I tell them when to do it and how and leave it up to them.

In both situations above, I used smaller, regional carriers. I doubt the big boys would ever make these kind of accomodations.

 

[Millwood]

What carrier? Bet the Forum can help with that specific info.

 

[somarco]

What carrier?

If you are asking me, there were two different carriers. Philadelphia American and Bankers Fidelity.

 

[StephanieCJ]

I had a Cigna go 2 months and there was only reinstatement available if they could pass underwriting. I had someone lapse a UHC for 6 months of non-payment, and it was reinstated (despite COPD and other health issues). It is going to be carrier specific.