The national guide covers Medicare (Parts A, B, C and D), Medigap plan letters, Medicaid and the basics of long-term care insurance. Hawaii adds its own rules for Medicare supplement policies (HRS Part 431:10A-301 ff.) and a detailed long-term care insurance chapter (HRS Article 431:10H). These notes cover those Hawaii rules.

National concepts in brief

• Medicare is generally available at 65, or after 24 months of Social Security disability benefits (42 U.S.C. 426(b)).
  • Part A: hospital insurance.
  • Part B: medical insurance.
  • Part C: Medicare Advantage plans run by private insurers.
  • Part D: prescription drugs.
• Medigap policies fill Original Medicare's gaps, such as deductibles and coinsurance. They do not work with Medicare Advantage.
• Medicaid is the needs-based federal-state program. A person eligible for both programs is "dual eligible."
• Long-term care pays for custodial care. Benefits are usually triggered by loss of activities of daily living or by cognitive impairment.

Medicare supplement in Hawaii

• Free look: 30 days from delivery, with a full premium refund (HRS 431:10A-308). Compare the 10-day free look for ordinary individual health policies.
• No duplication: a Medicare supplement policy in force in Hawaii may not duplicate benefits Medicare pays (HRS 431:10A-304(a)).
• Preexisting conditions (HRS 431:10A-304(d)):
  • A preexisting condition is one treated or advised within six months before coverage starts.
  • Such a condition can be excluded only for losses in the first six months of coverage.
• The Hawaii Life and Disability Insurance Guaranty Association does not cover Medicare Part C and Part D plans (HRS 431:16-203).

Long-term care insurance in Hawaii (Article 431:10H)

Definitions (HRS 431:10H-201):

• Activities of daily living include at least bathing, continence, dressing, eating, toileting and transferring. Shopping, cooking and housework are not on the list.
• Cognitive impairment is a deficiency in memory, orientation, reasoning, or judgment related to safety awareness.
• Adult day care is a daytime program for six or more people.

Policy standards:

• Renewability: individual policies must be guaranteed renewable or noncancellable (HRS 431:10H-202).
• No termination for age or declining health, and no coverage limited to skilled nursing care only (HRS 431:10H-107).
• Replacement within the same company: no new waiting period, except for benefit increases the insured chooses.
• Preexisting conditions: a condition treated within six months before coverage can be excluded only for losses beginning in the first six months (HRS 431:10H-108).
• Incontestability: after two years in force, the insurer can contest the policy only for knowing and intentional misrepresentation of relevant health facts (HRS 431:10H-115).
• Inflation protection must be offered. One acceptable option is 5% compounded annually, and a rejection must be signed (HRS 431:10H-220).
• Third-party lapse notice: before issuing an individual policy, the insurer must get a written designation of at least one other person to receive notice of lapse, or a signed waiver (HRS 431:10H-208).

Sales and suitability:

• Outline of coverage: delivered before the application is presented in a producer sale (HRS 431:10H-112). It summarizes benefits, exclusions, renewal terms and tax-qualified status. It does not show the producer's commission.
• Suitability (HRS 431:10H-231):
  • Give the applicant the "Long-Term Care Insurance Personal Worksheet" and the disclosure form "Things You Should Know Before You Buy Long-Term Care Insurance" at or before application.
  • The review looks at ability to pay, the applicant's goals and needs, and existing coverage.
  • The suitability rule does not apply to life policies that accelerate benefits for LTC.
• Free look: 30 days from delivery. Refunds are made within 30 days of the return (HRS 431:10H-111).

Senior-related sales rules elsewhere in the Code

• Senior designations: using a self-conferred or misleading senior-specific credential (for example an invented "certified retirement specialist" title) is an unfair and deceptive act (HRS 431:10D-642).
• Annuity sales to seniors follow Hawaii's best interest standard; see the Annuities guide.
• Life replacements carry a 30-day right to return the new policy; see the Life Policy Provisions guide.
• The guaranty association protects LTC benefits up to $300,000 (HRS 431:16-203).

Common exam traps

• Senior free looks are 30 days: Medicare supplement, long-term care and replacements. Ordinary individual life and health is 10 days.
• The Medigap preexisting exclusion is limited to six months back and six months forward. LTC uses the same six-and-six rule.
• LTC must be guaranteed renewable or noncancellable. It cannot be dropped because of age or worsening health.
• A rejection of LTC inflation protection must be signed.
• Shopping is not an activity of daily living.