Chapter 17 - Private Insurance for Senior Citizens and Special Needs Individuals

Question 1

What are Medicare Supplement Plans (aka Medigap)? (4)

Answer 1

• Policies issues by private insurance companies that are designed to fill in some of the gaps in coverage attributable to Medicare’s deductibles, copayment requirements, and benefit periods.
• Sold and serviced by private insurers and HMOs
• They must meet certain requirements and must be approved by the state department of insurance
• They pay some or all of Medicare’s deductibles and copayments.

Question 2

What was Omnibus Budget Reconciliation Act of 1990 (OBRA)? (3)

Answer 2

• OBRA authorized NAIC to develop a standardized model for these policies which they did and that model requires plans to meet certain requirements as to participant eligibility and the benefits provided.
• Purpose was also to eliminate questionable marketing practices and to provide consumers with a degree of protection and standardize the protection afforded
• Under OBRA Medigap plans may not discriminate in pricing or be denied on the basis of an applicant’s health status, claims experience, receipt of health care, or medical condition.

Question 3

Who may purchase a Medicare Supplement Policy? (2)

Answer 3

• Anyone that qualifies for Medicare.

- Applicant must generally have both Medicare Part A and Part B

Question 4

When is the open enrollment period for Medigap?

Answer 4

• It is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.
• In NYS applicants must be accepted at all times throughout the year for any Medigap benefit plan available from an issuer.

Question 5

What is Plan A (not Part A)?

Answer 5

• NAIC developed standard Medicare Supplement plan benefits with are identified with the letters A through N
• Core benefits found in plan A must be offered in all the plans
• Plan A must be offered by any insurer marketing Medigap plans, while the other plans are optional.

Question 6

What must an insurance company do during the Medigap open enrollment period?

Answer 6

• Sell the patient a Medicare supplement policy
• Cover all pre-existing conditions incurred more than 6 months from the effective date of coverage, and
• Not charge more for a supplement policy because of past or present health problems.

Question 7

What do the core benefits of a Medicare Supplement Plan A cover? (5)

Answer 7

• Part A coinsurance/copayment (NOT Part A deductible)
• Part A hospital costs up to an additional 365 days after Medicare benefits are used up
• Part A hospice care coinsurance/copayment
• Part B coinsurance/copayment
• The first 3 pints of blood (“blood deductible” for Parts A and B

Question 8

What does Plan B cover? (2)

Answer 8

Core benefits plus

-Medicare Part A deductible

Question 9

What does Plan D cover? (4) (NOT PART D)

Answer 9

Core benefits plus

• Medicare Part A deductible
• Skilled Nursing Facility Coinsurance
• Foreign travel benefit

Question 10

What does plan G cover? (6)

Answer 10

Core benefits plus

• Medicare Part A deductible
• Skilled Nursing Facility Coinsurance
• 100% of Medicare Part B excess charges
• Foreign travel benefit
• Must pay for services of activities of daily living (ADL) that Medicare doesn’t cover

Question 11

Which 2 Medigap plans have different core benefits than the others?

Answer 11

Plans K & L (lower premiums, higher out-of-pocket costs)

Question 12

What are the different core benefits in Plans K & L? (6)

Answer 12

• Approved hospital costs for the copayment for days 61 through 90 in any Medicare benefit period
• Approved hospital costs for the copayments for lifetime reserve days 91 through 150
• Approved hospital costs for an additional 365 days after all Medicare benefits are used
• 50% of charges for the first 3 pints of blood in Plan K, 75% of charges for the first 3 pints of blood in Plan L
• 50% of Part B coinsurance amount in Plan K, 75% of Part B coinsurance in Plan L
• 50% of hospice cost-sharing and respite care expenses for Part A in Plan K, 75% of of hospice cost-sharing and respite care expenses for Part A in Plan L

Question 13

Besides the alternative core benefits, what does Plans K & L Cover

Answer 13

Plan K:
50% of Medicare Part A deductible
50% of skilled nursing facility coinsurance
Plan L:
75% of Medicare Part A deductible
75% of skilled nursing facility coinsurance

Question 14

Define Twisting

Answer 14

High-pressure tactics and misleading advertising

Question 15

What is required by NYS of the disclosure statement for Medigap? (4)

Answer 15

• Must be in clear format and language
• In at least 12-point type
• Provided to the applicant along with the application
• Must consist of 4 parts:
  
  1. A cover page
  2. Premium information - on the cover page or immediately following it
  3. Disclosure pages
  4. Charts displaying the features of each benefit plan offered by the insurer, displayed on the cover page.

Question 16

The guaranteed issue provision stipulates that during the 6-month period after an individual is eligible for Medicare coverage because of age signs up for Part B, an insurance company issuing Medigap plans cannot do what? (3)

Answer 16

• Deny or condition the issuance of the effectiveness of any Medicare Supplement policy available for sale in this state
• Discriminate in the pricing of that policy because of the health status, claims experience, receipt of health care or medical condition of the applicant,
• Impose an exclusion of benefits based on a pre-existing condition under the policy. (This does not prevent the exclusion of benefits during the first 6 months based upon a pre-existing condition for which the policyholder received treatment or was otherwise diagnosed during the 6 months before it became effective)

Question 17

For Medigap policies, since they are guaranteed renewable, the insurer has no right to make any changes to the policy provisions, except for what? (3)

Answer 17

• Change benefits designed to cover cost-sharing amounts under Medicare to coincide with any changes in the applicable deductibles and copayments
• Amend the policy to meet the minimum standards for Medicare supplement insurance, or
• Revise premium rates on a class basis.

Question 18

Medicare is for people who?

Answer 18

• Are age 65 or older
• Have been eligible for SS disability income benefits for 2 years
• Have a permanent kidney failure (ESRD)

Question 19

OBRA requires that large group health plans (100 employees or more) must provide primary coverage for who?

Answer 19

Disabled individuals under age 65 who are not retired

Question 20

How is it determined, for those employed over age 65 and covered by group insurance, whether that or Medicare is primary coverage in groups with fewer than 20 employees? In groups with 20 or more employees?

Answer 20

• In groups with fewer than 20 employees, Medicare is primary
• In groups of 20 or more, the group coverage will be primary.

Question 21

What are the 4 Parts of Medicare?

Answer 21

1. Part A - Hospital insurance - financed through payroll taxes (FICA)
2. Part B - Medical Insurance - financed by insureds and general revenues
3. Part C - Medicare Advantage - allows for receipt of health care services through available provider organizations
4. Part D - Prescription Drug Coverage

Question 22

What are the three enrollment periods for Part A?

Answer 22

• Initial enrollment period - starting 3 months before turning 65, ending 3 months after turning 65
• General enrollment period - Jan 1st to March 31st annually
• Special enrollment period - Any time during the year if the individual or their spouse is still employed and covered under a group health plan.

Question 23

What does Part A cover? (4)

Answer 23

1. Inpatient skilled care
2. Skilled nursing facility care
3. Home health care
4. Hospice care

Question 24

What does Part B cover? (7)

Answer 24

1. Doctor services
2. Outpatient hospital services
3. Home health visits
4. Other medical and health services
5. Prescription drugs (limited coverage)
6. Outpatient treatment of mental illness
7. Yearly wellness visit

Question 25

When a person applies for Medigap, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?

Answer 25

The Insurer

Question 26

The premiums of issue age policies can only increase in response to what?

Answer 26

An increase in benefits