Which statement about dropping another company’s Medicare Supplement policy is true?

The rationale behind stating that consumers typically are not eligible for guaranteed issue when dropping another company’s Medicare Supplement policy is grounded in the guidelines established for Medigap plans. Guaranteed issue rights allow individuals to enroll in a Medigap policy without being subjected to medical underwriting under specific circumstances. However, dropping an existing policy does not automatically grant these rights.

Guaranteed issue typically applies in situations where consumers are facing certain qualifying events, such as losing their current coverage due to specific reasons (like moving out of the service area or the policy ending). Therefore, if a person voluntarily drops their existing plan without a qualifying event, they generally lose the protection of guaranteed issue rights and may face medical underwriting if they seek a new policy.

For context, eligibility for guaranteed issue and the associated rights depend on distinct protections mandated by law. If a consumer simply decides to leave a plan without meeting those stipulated conditions, they may encounter challenges when applying for new coverage, which is why understanding the nuances of guaranteed issue eligibility is crucial for anyone considering their options in Medicare Supplement coverage.