With little fanfare, Blue Shield of California is again offering its “underwriting holiday” for two of its “Plan G” Medicare supplemental plans, with enrollment starting October 1 and the plan year starting Jan. 1, 2024.
This means that applicants don’t have to answer questions about their health that would reveal conditions that could disqualify them, and underwriting approval is not required.
This year, supplemental plans for traditional Medicare beneficiaries pick up 20% of Part B costs that Medicare doesn’t reimburse for services such as imaging, doctor appointments, emergency department visits, ambulatory surgery, and other outpatient care. They also pay a beneficiary’s $1,600 deductible for each episode of Part A hospitalization.
Unlike Medicare Advantage (MA) plans, enrollees in traditional Medicare are not limited to narrow provider networks, or prior authorization delays and denials, which have been the subject of growing national criticism and Congressional scrutiny.
The offered plans during Blue Shield’s underwriting holiday are Plan G Extra and Plan G Inspire. Although the G plans have higher monthly premiums than most of the company’s other supplemental offerings, this year they offer extra benefits such as hearing and vision services.
Supplemental plan underwriting — subjecting applicants to a health questionnaire — is prohibited in only four states: Connecticut, Maine, Massachusetts, and New York. For the rest of the nation, after an initial trial period in an MA plan, a beneficiary who tries to switch out must be fairly healthy to meet the supplemental plan’s eligibility requirements.
The underwriting holiday allows those who aren’t sure if they’d qualify or those who do have health conditions the freedom to seek care from any providers who accept Medicare without worrying about the cost. For instance, a cancer diagnosis, high blood pressure, a recent hospitalization, or diabetes could exclude them, and they would be liable for bills beyond what Medicare covers, which can be extremely expensive.
In the Blue Shield FAQ, the agency specifies that “consumers who are NEW to Medicare or NEW to Blue Shield of California — including Medicare Supplement members from another carrier and Blue Shield commercial and IFP [individual and family plans] age-ins, are eligible for this underwriting holiday (for a Jan. 1, 2024 effective date.)”
Another part of the Blue Shield document suggests that only those new to Medicare would be eligible. However, anyone new to Medicare would have the right to buy a supplemental plan without underwriting under their initial enrollment period rights.
Three agents confirmed to MedPage Today that their training materials for enrollment specifies that enrollees in non-Blue MA plans are eligible for the underwriting holiday.
One downside with supplemental plans is that premiums increase with age in California and many other states. A 75-year-old enrolled in the Part G Extra plan in San Diego is paying $272 a month in 2023; a 77-year-old is paying $306.
Another downside is that neither traditional Medicare nor supplemental plans usually pick up costs for outpatient prescription drugs, a benefit offered by most MA plans. A traditional beneficiary must enroll in a separate Part D drug plan with a separate monthly premium for that benefit.
Blue Shield did set some restrictions on eligibility for the two G plans:
- Any applications submitted before October 1 cannot take advantage of the holiday and if they are rejected, they can’t be resubmitted after this date
- Plan G Inspire is only available in Northern California
- Current Blue Shield MA and Blue Shield Medicare Supplement enrollees are not eligible
- California residency is a requirement
Although the 2024 details and pricing for its Part G Extra and Part G Inspire plans aren’t available online to the public until next week, enrollees with Plan G Extra had no co-pays for typical medical services in 2023, except the $226 annual Part B deductible.
That may be a relief to the many MA enrollees — some 32,000 in San Diego — who learned this week they will lose coverage for the 1,000 doctors and advanced practitioners in two well-known provider groups, the Scripps Clinic Medical Group and the Scripps Coastal Medical Group.
Scripps sent out letters late Tuesday saying these physician groups were cancelling their MA contracts. If enrollees wanted to continue seeing those Scripps doctors, they would have to get out of their plan and enroll in “original Medicare (Part A and Part B).”
Otherwise, beneficiaries will have to either find another medical group that still contracts with their MA plan or find another MA plan, such as Kaiser Permanente’s.
Scripps officials said that low reimbursement and prior authorization denials prompted them to cancel contracts with UnitedHealthcare, SCAN, Blue Cross Blue Shield, and Health Net MA plans.
On Wednesday, UC San Diego Health also announced it is terminating two MA plans, Blue Shield 65 Plus HMO for primary care services and Brand New Day, both effective Jan. 1, 2024, but will still accept enrollees with SCAN and Humana, traditional Medicare, and most supplemental plans. The organization did not give a reason why it is dropping these contracts, which enroll 1,600 and 198 individuals, respectively.
San Diego resident Terry Rodgers, 70, who has been enrolled in the SCAN MA plan with doctors from Scripps Clinic, said the Scripps announcement “was a big surprise,” and letters he received from the plan and from Scripps left him a bit confused. “It’s been difficult to get good information,” he said.
For now, he thinks he wants to stay with his current doctors, whose offices are near his Del Mar home, where he can ride his bike to appointments — and that means dropping his current plan and enrolling in a supplement by taking advantage of Blue Shield’s underwriting holiday.
Even though it’s more expensive, it seems worth it to avoid having this happen to him again later on with another MA plan, he noted.
Although Rodgers has no serious health issues, he doesn’t want to risk having to answer health questions, which would be, he said, “rolling the dice and getting rejected.” The underwriting holiday seems to be coming at just the right time, he added.
Although underwriting holidays are relatively unknown, this is not the first time Blue Shield of California has offered them, with offers in 2019, 2020-2021, and 2022, although the windows for applying and effective dates of coverage varied.
Blue Shield of California did not respond to inquiries about why it is offering the holiday, since it will surely absorb more costly patients. It is unknown whether other Medicare supplemental health plans offer similar underwriting holidays, although Blue Shield of Arizona did offer the holiday in at least one prior year.