Medicare and Medicare supplement rules

Medicare appears in the social-insurance domain and again in Florida health law, so the same material earns points twice. Know what each part covers and how Florida regulates supplement sales.

Questions and answers, explained

All 12 questions above, with the correct answer and why it is correct. Everything here is on medicare and medicare supplement rules.

1. A Medicare supplement policy delivered in Florida must give the policyholder a free-look period, during which it may be returned for a full premium refund, of:

   • A10 days
   • B14 days
   • C21 days
   • D30 daysCorrect

   Why: Under s. 627.674, F.S., every Medicare supplement policy issued in Florida must provide a 30-day free look: the policyholder may return the policy within 30 days of delivery for a full refund of all premiums. The 14-day period applies to life policies and 21 days to annuities — much shorter than the senior-product standard.

   Reference FL-III.D; s. 627.674, F.S.

2. Medicare Part A primarily provides coverage for which of the following?

   • APhysician office visits and outpatient diagnostic tests
   • BInpatient hospital careCorrect
   • COutpatient prescription drugs
   • DRoutine dental and vision care

   Why: Part A is the hospital insurance portion of Medicare: it covers inpatient hospital care, skilled nursing facility care after a qualifying stay, hospice care, and certain home health care. Physician and outpatient services fall under Part B, and outpatient prescription drugs fall under Part D.

   Reference Outline VII (Social Insurance): Medicare Part A

3. Carlos, age 66, has retired and enrolled in Medicare Parts A and B. He wants to continue making contributions to the health savings account (HSA) he opened while working. Which factor now disqualifies him from making new HSA contributions?

   • ABeing older than 65 by itself
   • BHaving no earned income after retirement
   • CHaving a large existing HSA balance
   • DBeing enrolled in MedicareCorrect

   Why: To contribute to an HSA, an individual must be covered by a qualifying high-deductible health plan, have no other first-dollar coverage, not be enrolled in Medicare, and not be claimed as a dependent. Enrollment in Medicare ends eligibility for new contributions — age alone does not, and unlike an IRA, an HSA does not require earned income. Carlos may still spend his existing HSA balance tax free on qualified medical expenses. (Outline V.C)

   Reference Outline V.C (HDHPs and HSAs)

4. Under Florida law, a Medicare supplement policy may limit or exclude benefits for a preexisting health condition for no longer than how many months after the policy's effective date?

   • A6 monthsCorrect
   • B12 months
   • C24 months
   • DNo exclusion of any length is permitted

   Why: Florida limits Medicare supplement preexisting condition exclusions to a maximum of 6 months after the effective date, and the condition cannot be defined more restrictively than one for which medical advice or treatment was given or recommended within the 6 months before the effective date (s. 627.6741, F.S.). Choice D overstates the protection — a limited exclusion is allowed, it just cannot exceed 6 months. (Outline VI.B)

   Reference Outline VI.B; s. 627.6741, F.S.

5. Elsa is 67, still actively working, and covered by her employer's group health plan. The employer has 45 employees. She is also enrolled in Medicare Parts A and B. Which coverage pays first?

   • AMedicare, because she is over age 65
   • BThe two plans split each claim equally
   • CThe employer group health plan, because the employer has 20 or more employeesCorrect
   • DNeither — she must choose one coverage and drop the other

   Why: Under the Medicare Secondary Payer rules, a group health plan of an employer with 20 or more employees is primary for active employees age 65 or older and their covered spouses, and Medicare pays secondary. Choice A would be correct only if the employer had fewer than 20 employees; note that the threshold rises to 100 employees when Medicare entitlement is based on disability rather than age.

   Reference Outline VIII (Other Health Insurance Concepts): coordination with Medicare — Medicare Secondary Payer

6. A woman turned 65 in September and enrolled in Medicare Part B that same month. In December, she applies for a Medicare supplement policy and discloses she has diabetes. The insurer must:

   • AIssue the policy — she is within her 6-month open enrollment period, so coverage cannot be denied based on healthCorrect
   • BDecline the application because of her health history
   • CIssue the policy but permanently exclude all diabetes-related claims
   • DRequire a physical examination before deciding

   Why: Section 627.6741, F.S., establishes a 6-month open enrollment period beginning the first month in which the individual is 65 or older and enrolled in Medicare Part B; during this window the insurer may not deny or condition issuance because of health status. A preexisting-condition waiting period of no more than 6 months could apply, but a permanent exclusion of diabetes claims is prohibited.

   Reference FL-III.D; s. 627.6741, F.S.

7. Rosa, age 67, has premium-free Medicare Part A. She now wants coverage for physician services and outpatient care. Which statement about the coverage she needs is TRUE?

   • AIt is provided automatically at no cost to anyone enrolled in Part A
   • BIt is available only through a Medicare Supplement policy
   • CIt requires a 24-month waiting period before benefits begin
   • DIt is voluntary and requires payment of a monthly premiumCorrect

   Why: Part B (medical insurance) covers physician services, outpatient care, and diagnostic tests; it is optional and is financed in part by monthly premiums paid by enrollees. The 24-month wait applies to Medicare eligibility for Social Security disability recipients under age 65, not to Part B enrollment for someone already eligible.

   Reference Outline VII (Social Insurance): Medicare Part B

8. A Florida resident turns 65 and enrolls in Medicare Part B effective June 1. During what period must insurers accept her Medicare supplement application without denying coverage or charging more because of her health status?

   • AThe 30 days after she receives the issued policy in the mail from the insurance company
   • BThe 6-month open enrollment beginning the first month she is 65 and enrolled in Part BCorrect
   • CThe 90 days following her 65th birthday, whenever that falls
   • DThe 12 months beginning with her Medicare Part A enrollment

   Why: Florida law gives applicants a 6-month Medicare supplement open enrollment period beginning with the first month in which they are age 65 or older and enrolled in Part B; during it, insurers may not condition issuance on, or price the policy based on, health status (s. 627.6741, F.S.). Choice A confuses open enrollment with Florida's 30-day Medigap free-look period. (Outline V.D)

   Reference Outline V.D; s. 627.6741, F.S.

9. A 48-year-old Florida resident just enrolled in Medicare Parts A and B after qualifying due to a disability. He asks an agent whether he can buy a Medicare supplement policy. The correct answer is:

   • ANo — Medicare supplement policies may only be sold to people who have already reached the age of 65
   • BYes, but only if he first passes the insurer’s full medical underwriting and is approved
   • CYes — Florida requires an offer to under-65 enrollees, with 6-month open enrollment after Part BCorrect
   • DNo — he must wait until he has been on Medicare for a full 24 months

   Why: Section 627.6741, F.S., requires insurers selling Medicare supplement policies in Florida to make them available to individuals eligible for Medicare by reason of disability or end-stage renal disease, regardless of age, with a 6-month guaranteed-issue open enrollment period once enrolled in Parts A and B. This is a Florida-specific protection; in some states, under-65 enrollees have no Medigap access at all.

   Reference FL-III.D; s. 627.6741, F.S.

10. A client wants to enroll in a Medicare Advantage (Part C) plan. To be eligible, the client must

    • Abe enrolled in both Medicare Part A and Part BCorrect
    • Bfirst exhaust all Part A hospital benefits
    • Calso purchase a Medicare Supplement policy
    • Dqualify financially for Medicaid

    Why: Part C plans are offered by private companies approved by Medicare and replace the way Part A and Part B benefits are delivered, so the enrollee must be enrolled in both and continue paying the Part B premium. Medicare Supplement (Medigap) policies cannot be used alongside a Medicare Advantage plan, so option C is wrong.

    Reference Outline VII (Social Insurance): Medicare Part C (Medicare Advantage)

11. In Florida, a Medicare supplement policyholder may return the policy for a full refund of premium within how many days after receiving it?

    • A10 days
    • B14 days
    • C21 days
    • D30 daysCorrect

    Why: Florida requires a 30-day free-look period on Medicare supplement policies: the policyholder may return the policy within 30 days after receiving it for a full refund of any premium paid, refunded directly to the person who paid it (s. 627.674, F.S.). The 14-day figure is Florida's life insurance free look — a common point of confusion. Florida long-term care policies also carry a 30-day free look. (Outline V.D)

    Reference Outline V.D; s. 627.674, F.S.

12. Under s. 627.6741, F.S., a Medicare supplement policy issued in Florida may exclude benefits based on a preexisting condition for no more than:

    • A30 days
    • B6 monthsCorrect
    • C12 months
    • D24 months

    Why: Florida limits Medicare supplement preexisting-condition exclusions to 6 months, and only conditions for which medical advice or treatment was received within the 6 months before the effective date qualify as preexisting (s. 627.6741, F.S.). When the policy replaces another Medicare supplement or creditable coverage, the new insurer must credit waiting periods already satisfied.

    Reference FL-III.D; s. 627.6741, F.S.

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