The California Birthday Rule
Lower your monthly Medicare Supplement Plan premium within 60 days of your birthday.
What is the California Birthday Rule?
The California Birthday Rule is a statewide window of time a Medicare beneficiary can move from a like Medicare Supplement Plan to a like Medicare Supplement Plan, or lower Medicare Supplement Plan without going through medical underwriting for approval. During this window, you have what’s known as guaranteed-issue rights. This means a client can select a different insurance company’s Medicare Supplement Plan that is offering a lower premium for the same coverage and the application for the new, lower premium insurance company is guaranteed to be approved without the risk of losing coverage. In order to take advantage of the California Birthday Rule, you must be currently enrolled in a Medicare Supplement Plan. If you decide to move plans, the newly issued Medicare Supplement Plan is guaranteed-renewable just like you current Medicare Supplement Plan. This means the plan can never be cancelled as long pay your monthly premium, nor can the coverage be changed or cancelled like it can be with Medicare Advantage Plans.
The California Birthday Rule does not apply to clients in Medicare Advantage Plans looking to transfer back to Original Medicare and move to a Medicare Supplement Plan. Although moving from a Part C Plan to a Medicare Supplement Plan is possible through medical underwriting (health questions asked), the California Birthday Rule cannot be used to bypass underwriting when attempting to make this change from a Medicare Advantage Plan.
Note: If you enrolled in a Medicare Advantage Plan the first time you were eligible with Medicare, and within the first 12 months of being in the Medicare Advantage Plan, you chose to return to Original Medicare, you have guaranteed-issue into the Medicare Supplement Plan of your choice. Remember, this is only a one time window the first year you are in Medicare and selected a Medicare Advantage Plan. Some carrier may offer a 24 month window to make this change. Contact us for me details if you’re trying to move back to Original Medicare and add a Medicare Supplement Plan within the first two years of being on Medicare.
California Birthday Rule - Medicare Supplement Plan
30 days before
Insurers may allow you to apply before your birthday. The new plan begins after your birthday.
Birthday date
Apply on your birthday or up to 60 days after for guaranteed-issue rights.
60 days after
New plan effective the 1st of the next month, or the second month. You choose.
Move from a like plan to a like plan (or lower plan) within 60 days from the date of your birthday. 30 days before (with some insurers), the day of, and 60 days after, you’re able to sign and date an application for guaranteed-issue. To be clear, you will never be able to start the new plan prior to your birthday. Therefore, it will always go into effect after your birthday (1st of the month following). Some insurance companies will allow you to apply early with an application, where as others may require that you only apply in the 60 day window after your birthday. Regardless, you will always have a 60 window to make the transition.
If you were to send in a signed application for the same coverage under a new insurance carrier with lower rates using your guaranteed-issue rights:
– Before your birthday date and/or within your birthday month, your Medicare Supplement Plan will begin the 1st of the month following your birthday, or the first of the following month. You will not be able to start the new insurance plan (same coverage) before your birthday. Since plans always start on the 1st, it will never be before your birthday.
– Anytime after your birthday month within the 60 day window, you’ll be able to choose to have the coverage begin the 1st of the following month, or the 1st of the second month after you applied with most carriers. Choosing your effective date up to 2 months after the signed application may vary insurance carrier to carrier, however, the coverage, guaranteed-issue rights, the plan being guaranteed-renewable, continue to apply.
Now when to cancel the more expensive plan Medicare Supplement Plan? Cancel as soon as you get confirmation, and/ or when the new application is submitted for coverage. Although it is guaranteed-issue, it may take a week or more for approval. Therefore, you’re allowed to be flexible with your new start date. Maybe you have a birthday that falls on a day later in the month? If so, and you would prefer to start the new plan the following month, then great, That makes sense! The 60 day window applies to the application being dated and signed within the 60 days, not necessarily the start date of the new plan.
Go with the new effective date you’re most comfortable with. Regardless, the full coverage of your new plan will go into effect the day it becomes effective and we will end the old plan on the same day (no lapse in coverage). You can continue seeing the same physicians and/or continue your current medical treatment plans, surgeries, as planned. Remember, your access to physician services and providers is all based on Medicare being your primary insurance, not the secondary policy that follows Medicare– your Medicare Supplement Plan is the piece we are changing. Therefore, this has no effect on your access to medicare physicians and/or providers.
California Birthday Rule - Moving like plan to like plan. Plan G to Plan G.
For example, moving from Plan G to Plan G or like Medicare Supplement Plan to like Medicare Supplement Plan. Like plan to like plan is the simplest and most straight forward move for most clients. Moving from company “ABC” Plan G to company “XYZ” Plan G and save anywhere between $15-75 a month. The average savings us usually around $20-$30 a month. Most clients do this every 2-3 years to keep their coverage exactly the same, while lowering their premium every couple years.
Moving like plan to like plan doesn’t change the clients coverage whatsoever. Remember, if you’re in a Medicare Supplement Plan, you have chosen to keep Original Medicare as your primary coverage. Therefore, the Medicare Supplement Plan is secondary– picking up the costs that Original Medicare doesn’t cover. Thus, moving to a like plan with lower premiums is merely choosing a new insurer to pick up the remaining costs (i.e. 20%), just as the previous Medicare Supplement Plan had done before the move to the new insurer with the same coverage.
Also, the Part B deductible doesn’t “restart”. Once the deductible is paid in the calendar year (ie. Plan G), the new “like Medicare Supplement Plan” would continue paying for the 20% just as it did before once the Part B deductible had been paid. You would only be subject to the Part B deductible if you hadn’t already paid it in that calendar year. You would be subject to the Part B deductible the following calendar year just as any Plan G plan would on January 1st (subject to change annually).
Moving like plan to lower Plan. Plan F to Plan G. Plan G to Plan N.
The same guaranteed-issue rule applies for like plan to lower plan. For example, with Plan F being a grandfathered plan that is not available after January 1, 2020, the rates have typically increased for those clients in the Plan F model. Many clients have kept Plan F and moved carriers for better rates, while other have moved to Plan G to get more value if the Plan F rates are too high in their ZIP code. Why?
Well, the only difference from Plan F to Plan G is the Part B deductible of $226 (2023). Yes, that is it! If the difference from Plan F to Plan G premiums is, say $70 a month, that would equate to $840 a year in premium. With only a $226 deductible in 2023, a client would save $607 in insurance premiums for that year with the same benefits once the deductible is paid. For a couple this would save them over $1200!
California Birthday Rule Guaranteed-Issue.
Within 60 days of your birthday, use the California Birthday Rule to move to any carrier with a lower premium while keeping exactly the same coverage and access to your physicians. No health questions asked!
For example, Plan G to Plan G from company “X” to company “Y” and pay $20-45 less per month. Guaranteed-issue move within 60 days of your birthday!
California Birthday Rule - Moving to a higher plan. Plan N to Plan G.
If someone were looking to move from a lower Medicare Supplement Plan’s coverage (regardless of the insurance carrier), to a more comprehensive Medicare Supplement Plan, such as, moving from Plan N to Plan G, this would not be a guaranteed-issue situation. In the event a client is looking to upgrade coverage, they will need to go through medical underwriting (answer health questions to qualify). The medical underwriting process on the application would be the same as it would be for someone who is initially applying for Medicare Supplement Plan coverage outside a guaranteed-issue period. This would apply to someone outside their Initial Enrollment Period (IEP) when turning 65, or in many circumstances, trying to move from away from a Medicare Advantage Plan back to Original Medicare with a Medicare Supplement Plan.
Moving from a Medicare Advantage Plan to a Medicare Supplement Plan
Contact my office for more specifics if you’re trying to upgrade coverage, or trying to move away from a Part C Plan/Medicare Advantage Plan as there are specific times for when you should try to accomplish this transition. I recommend applying for the Medicare Supplement Plan during AEP, and if successful, add a stand alone Part D Medicare Prescription Plan to the Medicare Supplement Plan.
Why during AEP? If you’re not successful going through medical underwriting, meaning you were not approved for the Medicare Supplement Plan, you would still have sufficient time to select another Part C or Medicare Advantage Plan within the AEP window of October 15th – December 7th for the new plan coverage to begin the first of the year. As always, you may remain in the same Medicare Advantage Plan while applying for the Medicare Supplement Plan. I’ll review with the strategy of timing the applications so we aren’t changing anything until you know the status of your Medicare Supplement Plan application approval or denial.
This transition can also be done in the MAOEP or Medicare Advantage Open Enrollment Period, but it is not as flexible, as it only allows you to make one Part D choice after leaving a Part C plan while returning to Original Medicare. By all means, use either enrollment period when working with us. The MAOEP happens in the early Spring from January 1st – March 31st. Thus, it can be easier to make the move during the Fall’s AEP and have the new plan go into effect the 1st of the year as opposed to later in the Spring with MAOEP.
Note: If you enrolled in a Medicare Advantage Plan the first time you were eligible/enrolled in Medicare and within the first 12 months of being in the Medicare Advantage Plan, you choose to return to Original Medicare, you have guaranteed-issue into the Medicare Supplement Plan of your choice. Remember, this is only a one time window the first year you began Medicare and enrolled in a Medicare Advantage Plan.
Another example: If you were to enroll in a Medicare Supplement Plan when first turning 65 and/or first enrolled in Medicare, and say, two years later you were talked into a Medicare Advantage Plan for your 3rd year of being in Medicare. Continuing on with the scenario, let’s say, the plan wasn’t what you thought it was and you wanted to return to your Medicare Supplement Plan. Well, unfortunately, you will need to go through medical underwriting (answer health questions to qualify) as you no longer have guaranteed-issue. You could be denied the Medicare Supplement Plan coverage based on your past medical history and be “stuck” in the Part C health plan model until your health was good enough to qualify for the Medicare Supplement Plan.
If you have concerns about your plan options and you want clear answers about your guaranteed-issue rights, please give us a call. John would be happy to walk you through each scenario before helping you lower your Medicare Supplement Plan monthly premiums.
