Medicare, Medicare Supplement (Medigap), Medicaid, and long-term care basics are federal or national material and are covered in the national Senior and Special Needs guide. Alaska's exam adds the state rules for selling Medicare supplement policies (3 AAC 28.410-.510) and long-term care insurance (AS 21.53 and 3 AAC 28.550-.560). Most of those rules exist to stop high-pressure sales, duplicate coverage, and post-claims underwriting, and the exam tests the specific time periods.

Federal backdrop in one paragraph

Medicare Part A covers hospital care, Part B covers physician and outpatient services, Part C (Medicare Advantage) delivers A and B through private plans, and Part D covers prescription drugs. Medigap policies fill gaps in Original Medicare and are standardized into lettered plans. Medicaid is needs-based and jointly funded by the federal government and the states. It pays for custodial long-term care for people who qualify, and asset transfers for less than fair value in the 60 months before applying can trigger a penalty period. Medicare largely does not pay for custodial care, which is the gap long-term care insurance fills.

Medicare supplement rules in Alaska

Open enrollment. Alaska's Medigap open enrollment period lasts six months. It begins on the first day of the first month in which the person is both 65 or older and enrolled in Part B (3 AAC 28.457). During it the issuer may not deny coverage, condition issue, or vary the price based on health status. An applicant with at least six months of prior creditable coverage cannot be given a preexisting condition exclusion.

Plans C and F. People who became newly eligible for Medicare on or after January 1, 2020 may not buy Plans C, F, or high-deductible F, the plans that pay the Part B deductible (3 AAC 28.457(c)).

Policy content.

• The first page must display: "Notice to buyer: This policy might not cover all of your medical expenses" (3 AAC 28.504).
• A Medigap policy may not base benefits on "usual and customary" or "reasonable and customary" standards (3 AAC 28.490(c)).
• A policy may not exclude, limit, or reduce coverage for specifically named or described preexisting conditions (3 AAC 28.440).

Free look. A Medicare supplement policy must state the right to return it within 30 days of delivery for a premium refund (3 AAC 28.490(e)).

Required documents. Anyone eligible for Medicare who applies for hospital or medical expense coverage must receive the Guide to Health Insurance for People with Medicare (3 AAC 28.490(f)).

Application questions and agent disclosure. On the application, the agent lists the applicant's other health policies the agent sold that are still in force, plus those sold in the past five years that are no longer in force (3 AAC 28.500(b)).

Suspension rights.

• A policyholder who becomes eligible for Medicaid may suspend Medigap benefits and premiums for up to 24 months if the request is made within 90 days of becoming eligible (3 AAC 28.500(a)).
• A policy suspended because the insured gained employer group coverage due to disability is reinstituted if requested within 90 days of losing that group coverage.

Medicare Advantage. An issuer may not issue a Medigap policy to a Part C enrollee unless the Medigap coverage starts after the Part C coverage ends (3 AAC 28.505(c)).

Prohibited sales practices.

• A sale that would give a person more than one Medicare supplement policy is prohibited (3 AAC 28.505(b)).
• So are force, fright, threat, or undue pressure, and methods that hide the fact that the purpose is to sell insurance (3 AAC 28.504(b)). These are in addition to the general unfair trade practices in AS 21.36.

Replacement. When a Medigap sale replaces existing coverage, the applicant and agent sign a replacement notice. It tells the applicant the new policy gives 30 days to decide, without cost, whether to keep it (3 AAC 28.500).

Long-term care insurance in Alaska

Definition. A long-term care policy covers each insured for at least 12 consecutive months for services provided somewhere other than an acute care hospital unit (AS 21.53.200).

Sales and delivery.

• In an agent solicitation, the outline of coverage must be delivered before the application is presented (AS 21.53.050(b)).
• The policy carries a 30-day right to return for a premium refund (AS 21.53.050(a)).
• An individual life policy with a long-term care rider comes with a policy summary explaining how the LTC benefits interact with the death benefit (AS 21.53.060(a)).

Producer training. Before selling LTC, a producer with a life or health license completes a one-time 8-credit-hour course, followed by 4 hours of LTC training every 24 months (AS 21.53.066).

Underwriting limits.

• A preexisting condition may be defined by treatment recommended or received within no more than six months before coverage begins. An exclusion may apply only to a loss beginning within six months after coverage starts (AS 21.53.030).
• Benefits may not be conditioned on a prior hospitalization. For noninstitutional benefits, they may not be conditioned on a prior institutional stay of more than 30 days (AS 21.53.040).
• For an applicant 80 or older (other than guaranteed issue), the insurer must obtain a physical exam, functional assessment, physician's statement, or medical records before issuing. This is meant to prevent post-claims underwriting (3 AAC 28.558).

Contestability (AS 21.53.062):

• Between six months and two years in force, the policy can be rescinded only for a misrepresentation that is material and pertains to the condition for which benefits are sought.
• After two years, it can be contested only for a knowing and intentional misrepresentation of relevant health facts.

Renewability and lapse.

• An LTC policy may not be cancelled or nonrenewed because of the insured's age or deteriorating mental or physical health (AS 21.53.020).
• Before issue, the applicant either designates another person to receive lapse notices or signs a waiver (3 AAC 28.554).
• A policy may not lapse for nonpayment until notice goes to the insured and the designee at least 45 days before the lapse date.
• If the insured was cognitively impaired or had lost functional capacity before the grace period ended, the policy must be reinstated on a request made within five months after termination.

Inflation protection and nonforfeiture.

• The insurer must offer inflation protection at least as favorable as benefits increasing 5% compounded annually (3 AAC 28.560).
• It must also offer a nonforfeiture benefit. If the applicant declines, a contingent benefit upon lapse applies after a substantial premium increase (AS 21.53.064).

Claims. If an LTC claim is denied, the insurer provides a written explanation within 60 days of a written request (AS 21.53.060(c)).

Group LTC for associations requires at least 100 members and at least one year of active existence (AS 21.53.080).

Key numbers

Common exam traps

• Open enrollment requires both age 65 and Part B enrollment, and lasts six months.
• Plans C and F are closed only to people newly eligible on or after January 1, 2020.
• Medigap benefits cannot be based on "usual and customary" charges.
• The LTC outline of coverage comes before the application, not at delivery.
• An LTC policy cannot be nonrenewed for age or declining health.
• Medicaid's asset-transfer look-back is 60 months under federal law. Don't confuse it with the 6-month LTC preexisting look-back.