Tobacco User with a Non-tobacco Plan

[Fisher]

So I hear from a guy today that has a MoO Plan G and wants to shop it. Turns out the plan he currently has is priced for a non-tobacco user yet he does in fact use tobacco (and did at the time of the MoO application.)

I know how this would be dealt with for a life insurance claim but what kind of exposure is he potentially facing with a med supp?

 

[goillini52]

So I hear from a guy today that has a MoO Plan G and wants to shop it. Turns out the plan he currently has is priced for a non-tobacco user yet he does in fact use tobacco (and did at the time of the MoO application.)

I know how this would be dealt with for a life insurance claim but what kind of exposure is he potentially facing with a med supp?

What's his age...how long has he had Medicare Part B? In many states, when in the Open Enrollment smokers get non smoker rates and will stay that way until they change companies...then they'll be charged for being a smoker.

 

[Fisher]

He was not in OE when the current non-smoker plan was written.

 

[goillini52]

He was not in OE when the current non-smoker plan was written.

Then that's a clean sheeted app. A few companies(like BCBS in my state) have the same rates whether smoker/non smoker. MoO ain't one of them.

 

[Fisher]

I realize that. My question is what's the possible worst case scenario for this guy as things stand? I'm not even sure if there IS a worst case scenario.

 

[goillini52]

I realize that. My question is what's the possible worst case scenario for this guy as things stand? I'm not even sure if there IS a worst case scenario.

Did he lie on the app? Has he had the policy more than 2 years? If so probably nothing can be done to him after the 2 year contestable period, unless the company wants to try and prove fraud, and I doubt they'd do it over smoking. I'd call MoO with him and ask...anonymously.

 

[Fisher]

It appears that the agent who wrote the app decided to ignore the smoking cigarette in the ashtray when the app was written. Do med supps have a 2 year incontestible period? I've never heard of that... but I learn something new every day.

 

[goillini52]

It appears that the agent who wrote the app decided to ignore the smoking cigarette in the ashtray when the app was written. Do med supps have a 2 year incontestible period? I've never heard of that... but I learn something new every day.

All life and health policies have a 2 year period(I think some states might have 3 years).

 

[openmindedone]

It appears that the agent who wrote the app decided to ignore the smoking cigarette in the ashtray when the app was written. Do med supps have a 2 year incontestible period? I've never heard of that... but I learn something new every day.

There is a two year contestable period.

However the tobacco question isn't an eligibility question it's a rate question. The policy cannot be rescinded for that.... I think.

 

[jdeasy]

There is a two year contestable period.

However the tobacco question isn't an eligibility question it's a rate question. The policy cannot be rescinded for that.... I think.

AmCon told me they could rescind over that. It was an odd case and I don't know if they could or not.

I wrote the lady a little over a year ago. 71 year old smoker. Wrote it as a smoker, quoted it as a smoker. She did the phone interview and answered yes to the smoking question. For some reason they charged her the non tobacco rate. She didn't notice. I didn't notice and the company didn't notice.

A year later they just start charging her the smoking rate. She calls me about her rate going up $20/mo. She tells me what they are charging and I see that it's exactly the rate I quoted a year earlier.

AmCon wouldn't admit to just catching the error. They claimed it was a normal rate increase. But the Indiana rate increase was 6%. And it was exactly what the smoking rate would have been.

That's when they said it had to be fixed or her policy could be rescinded for misrepresentation. I told them good luck with that since she hadn't misrepresented anything.

Turns out the new CLI rates in Indiana were less than the rate she was quoted a year earlier. We just moved her to CLI. At the tobacco rate.

Anyway, they claimed that they could rescind over the tobacco question.