AHIP Medicare Supplement (Medigap) Plans 2 — Questions and Answers
Question 1: What does 'guaranteed issue' mean in the context of Medigap insurance?
- The insurer guarantees the lowest premium available in the market
- The insurer must sell a Medigap policy regardless of health status without charging extra for pre-existing conditions (Correct answer)
- The federal government guarantees payment of all Medigap claims
- The policy is guaranteed to automatically renew without premium increases
Correct answer: The insurer must sell a Medigap policy regardless of health status without charging extra for pre-existing conditions
Guaranteed issue means an insurer cannot deny you a Medigap policy or charge higher premiums based on pre-existing health conditions during qualifying periods.
Question 2: A Medicare beneficiary involuntarily loses their employer-sponsored retiree health coverage. What Medigap right does this qualifying event trigger?
- They must wait until the next Annual Enrollment Period to apply for Medigap
- They have a guaranteed issue right to purchase certain Medigap plans without medical underwriting (Correct answer)
- They must wait 6 months before applying for any Medigap plan
- They automatically qualify for Medicaid as a secondary payer
Correct answer: They have a guaranteed issue right to purchase certain Medigap plans without medical underwriting
Losing employer-sponsored coverage is a qualifying event that grants guaranteed issue rights, allowing purchase of specific Medigap plans without medical underwriting.
Question 3: Which statement BEST describes medical underwriting as it applies to Medigap?
- A process where insurers review a beneficiary's financial history before issuing a policy
- A process where insurers evaluate health status to decide whether to sell a policy and at what premium (Correct answer)
- A federal mandate requiring all Medigap plans to accept pre-existing conditions at any time
- A process that applies only to beneficiaries under age 65 with disabilities
Correct answer: A process where insurers evaluate health status to decide whether to sell a policy and at what premium
Medical underwriting allows Medigap insurers to review health status outside of guaranteed issue periods, potentially resulting in denial or higher premiums.
Question 4: Under Medigap Plan N, a beneficiary may be required to pay which of the following cost-sharing amounts?
- The full Medicare Part B monthly premium
- Copayments of up to $20 for some office visits and up to $50 for emergency room visits (Correct answer)
- A 50% coinsurance for all Medicare Part B services
- The full Medicare Part A inpatient deductible
Correct answer: Copayments of up to $20 for some office visits and up to $50 for emergency room visits
Plan N requires copayments of up to $20 for certain office visits and up to $50 for ER visits that don't result in hospital admission, in exchange for lower premiums.
Question 5: How do Medigap insurers structure their premium pricing methodologies?
- Community-rated, issue-age-rated, and attained-age-rated are the three recognized methods (Correct answer)
- All insurers are federally required to use only community-rated (same premium for all) pricing
- Premiums are set uniformly by CMS and must be identical across all private insurers
- Premiums are based solely on the beneficiary's income and Social Security benefit amount
Correct answer: Community-rated, issue-age-rated, and attained-age-rated are the three recognized methods
Medigap premiums may be community-rated (same for everyone), issue-age-rated (based on age at purchase), or attained-age-rated (increases as you age).
Question 6: Can a Medigap insurer cancel a beneficiary's policy because the beneficiary develops a serious illness?
- Yes, if the illness was a pre-existing condition at the time of enrollment
- Yes, after a mandatory 90-day notice period
- No — Medigap policies are guaranteed renewable as long as premiums are paid on time (Correct answer)
- No, but the insurer can increase premiums based on the beneficiary's deteriorating health
Correct answer: No — Medigap policies are guaranteed renewable as long as premiums are paid on time
Medigap policies are guaranteed renewable, meaning the insurer cannot cancel coverage due to health status as long as premiums continue to be paid.
Question 7: Which Medigap plans cover skilled nursing facility (SNF) coinsurance?
- Plans A and B only
- Plans C, D, F, G, M, and N at 100%; Plans K and L at reduced percentages (Correct answer)
- All 10 standardized Medigap plans cover 100% of SNF coinsurance
- No standardized Medigap plan covers skilled nursing facility coinsurance
Correct answer: Plans C, D, F, G, M, and N at 100%; Plans K and L at reduced percentages
Plans C, D, F, G, M, and N cover 100% of SNF coinsurance; Plans K and L cover it at partial percentages; Plans A and B do not cover SNF coinsurance.
AHIP Medicare Supplement (Medigap) Plans 2
What does 'guaranteed issue' mean in the context of Medigap insurance?