Updated: Nov 8
Over 26 million Medicare beneficiaries are enrolled in Medicare Advantage Plans for their health coverage. These popular private plan alternatives promise expanded benefits and lower costs. But can an insurance company turn you down if you apply for one of their Medicare Advantage Plans?
While any Medicare beneficiary can sign up for Original Medicare, that’s not always the case with Medicare Advantage. These private insurers can deny your application in certain situations.
Understanding Medicare Advantage enrollment rights and restrictions can save you wasted time and effort. Read on to learn the key facts about whether or not you can be rejected by a Medicare Advantage insurer.
Medicare Advantage Basics
First, a quick primer on what Medicare Advantage is and how it works.
Medicare Advantage, sometimes called Medicare Part C, refers to private Medicare Plans like HMOs and PPOs from insurance companies. They bundle together all your Part A, Part B, and usually Part D benefits in one plan.
Pros of Medicare Advantage can include:
Lower out-of-pocket costs
Benefit caps that limit your annual spending
Extra benefits not covered by Original Medicare
Prescription drug coverage built-in
Cons may include:
Restricted provider network
Prior authorization required for procedures/tests
Co-pays and other cost-sharing requirements
Plans vary widely, so benefits and costs differ. Medicare pays the insurer a set rate per member.
Now let’s dive into enrollment and see how it differs from Original Medicare.
Enrolling in Original Medicare P vs Medicare Advantage
When you first become eligible for Medicare at age 65, you have a seven-month Initial Enrollment Period to sign up. This enrollment window also applies if you qualify for Medicare earlier due to disability.
During this Initial Enrollment Period you can enroll in Original Medicare (Part A and/or Part B) and/or a Medicare Advantage Plan.
Original Medicare must accept all eligible beneficiaries who apply, regardless of pre-existing conditions. However, Medicare Advantage Plans can deny applications in certain situations which we’ll explain shortly.
What happens if you delay signing up for Medicare past age 65?
For Original Medicare - you may pay lifelong late enrollment penalties if you don't have a Special Enrollment Period.
For Medicare Advantage - you can only join during designated enrollment windows, including the Annual Election Period each fall.
As you can see, the rules differ between enrollment in Original Medicare vs. Medicare Advantage Plans.
Next let’s look at the specific reasons a private Medicare Advantage insurer can turn down an application.
When Can Medicare Advantage Plans Deny Coverage?
As private insurers, Medicare Advantage Plans can reject applications during Initial Enrollment and other windows. Here are some of the main reasons they may deny coverage:
You Don't Have Medicare Part A and B
To enroll in a Medicare Advantage Plan, you must be entitled to and enrolled in both Original Medicare Part A and Part B. Plan insurers can reject your application if you lack either part.
Having at least Part B is essential because that's how Medicare funds these plans - through your Part B premium. Some plans may also verify your enrollment in Part A.
You Don't Live in the Service Area
Each Medicare Advantage Plan defines a geographic service area where it provides coverage. If you apply for a plan but don't reside within its approved area, you can be denied.
Service areas are generally specific counties and zip codes where the plan has built an adequate provider network. Make sure to only apply for plans covering your location.
You Have End-Stage Renal Disease (ESRD)
Under most circumstances, Medicare Advantage Plans can choose not to accept applicants with End-Stage Renal Disease (ESRD).
There are two exceptions:
You were already enrolled in that plan before being diagnosed with ESRD.
You enroll in a Special Needs Plan specially designed for people with ESRD.
But otherwise, expect potential denial if you have ESRD without prior Medicare Advantage enrollment.
Plan Capacity Reached
Rarely, a Medicare Advantage Plan may hit a capacity limit approved by Medicare for number of members. When this enrollment cap is reached, the plan can turn down new applicants until space opens up again.
You Missed the Enrollment Deadline
As mentioned earlier, there are set enrollment periods for joining a Medicare Advantage Plan. Outside of these windows, insurers can deny coverage until the next opportunity.
Make sure to carefully note enrollment deadlines each year like the Annual Election Period.
Other Administrative Reasons
There may be other administrative issues that could cause a Medicare Advantage application to be denied. For example, incomplete paperwork or missing enrollment requirements.
Work closely with the plan to avoid denial for fixable oversights. Appeal any rejection you believe is unjustified.
Now that we’ve covered reasons for denial, let’s look at some key enrollment tips.
Avoiding Medicare Advantage Denial
You can minimize the chances of having your application rejected by following these best practices:
Verify your eligibility - Make sure you have Original Medicare Parts A and B in force before applying. And only consider plans covering your local area.
Mind the timing - Apply during an accepted enrollment period like your Initial or Annual Election Period. Don't wait until you have a health emergency.
Avoid ESRD issues - If you develop ESRD, try to stay enrolled in your existing plan if possible. Or apply for a Special Needs Plan.
Check for errors - Carefully review your application for mistakes and confirm receipt to reduce administrative denials.
Appeal wrongful denial - If you believe a plan's rejection of your application violates Medicare rules, file an appeal.
Following these tips can help ensure your Medicare Advantage application goes through smoothly. But also have a backup plan in case you do get denied.
Your Options If Denied by Medicare Advantage
Say you go through Initial Enrollment expecting to get into a Medicare Advantage Plan but get rejected. Or you attempt to switch plans during the Annual Election Period only to find out you've been denied. What are your options?
Here are some ideas if your Medicare Advantage application gets turned down:
Enroll in Original Medicare - You can always sign up for Medicare Parts A and B as your coverage foundation.
Add a stand-alone Part D Plan - Shop for a prescription drug plan to pair with Original Medicare.
Purchase a Medigap policy - Consider adding a Medigap Supplement Plan for low out-of-pocket costs.
Apply to a different Medicare Advantage Plan - Try another insurer that may accept your application.
Investigate Special Needs Plans - If you have a chronic condition, research SNPs you may qualify for.
Wait for the next Enrollment Period - You can reapply to Medicare Advantage Plans during the next opportunity.
With a little bit of preparation, you can end up with solid Medicare coverage even if denied by a particular Medicare Advantage insurer. Just be ready with fallback options in case you get rejected.
Right to Appeal Medicare Advantage Denial
If you believe your Medicare Advantage application was wrongfully denied, you have the right to appeal. Depending on the situation, you may need to follow one or both processes below:
Appeal to the Medicare Advantage Plan - You can request an appeal/reconsideration from the insurer to review their decision. Provide supporting details.
File a complaint with Medicare - If you believe the plan violated Medicare enrollment rules, contact 1-800-MEDICARE to submit a complaint.
An upside of Medicare Advantage being part of the Medicare program is that you have recourse options if wrongly denied. Make sure to appeal if you think the plan's reasons are invalid or discriminatory.
Avoid the Headaches of Denial
While anyone can sign up for Original Medicare, that's not the case with Medicare Advantage. These private plans can reject applications under certain circumstances.
Knowing the rules and reasons for possible denial allows you to avoid unpleasant surprises. Have backup options ready just in case. And appeal wrongful rejection if warranted.
Following the tips in this guide will help make your path into Medicare Advantage smoother. Over 26 million beneficiaries enjoy the benefits of Medicare Advantage Plans. Learn the ins and outs of enrollment and unlock your options.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Next Steps Insurance a Call at (717)-271-2326. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
Can I be denied coverage for pre-existing conditions with a Medicare Advantage Plan or Medicare Supplement?
No, Medicare Advantage Plans cannot deny coverage for pre-existing conditions. However, Medicare Supplement Plans (also known as Medigap Plans) may deny coverage for pre-existing conditions in certain situations.
What is a Medicare Supplement Plan?
A Medicare Supplement Plan is a private insurance plan that helps fill the gaps in coverage with Original Medicare. It helps pay for things like deductibles, copayments, and coinsurance.
Can I be denied a Medigap Plan?
Yes, insurance companies can deny you coverage for a Medigap Plan if you have a pre-existing condition. However, there are certain times when you have guaranteed issue rights, such as during the open enrollment period.
What is the open enrollment period for Medicare Supplement Plans?
The open enrollment period for Medicare Supplement Plans is a 6-month period that begins on the first day of the month in which you are 65 or older and enrolled in Medicare Part B. During this period, insurance companies cannot deny you coverage or charge you higher premiums based on your health status.
What is Medicare Advantage?
Medicare Advantage (also known as Medicare Part C) is a type of health insurance plan offered by private insurance companies that combines the benefits of Medicare Part A and Part B. It often includes additional benefits such as prescription drug coverage and may have lower out-of-pocket costs.
Can Medicare Advantage Plans deny coverage?
Yes, Medicare Advantage Plans can deny coverage for certain services or treatments if they are deemed unnecessary or not medically necessary. Prior approval may be required for certain procedures or treatments.
What is the difference between Medicare Supplement and Medicare Advantage?
Medicare Supplement Plans work with Original Medicare to cover the gaps in coverage, while Medicare Advantage Plans replace Original Medicare and provide all your Medicare benefits through a private insurance plan.
Can I have both Medicare Supplement and Medicare Advantage?
No, you cannot have both Medicare Supplement and Medicare Advantage at the same time. You must choose one or the other.
Is Medicare Supplement part of the federal Medicare program?
No, Medicare Supplement Plans are sold by private insurance companies and are not part of the federal Medicare program. However, they are regulated by the government.
How do I sign up for a Medicare Advantage Plan?
To sign up for a Medicare Advantage Plan, you can contact a Medicare agent or insurance agent who can help guide you through the process. You can also enroll directly with the insurance company offering the plan.