Medicare Parts A to D, the standardized Medigap plans, Medicaid and long-term care design are covered in the national Senior and Special Needs guide. This guide covers North Carolina's Medicare supplement law (G.S. Chapter 58, Article 54) and long-term care law (Article 55), plus the state's special licensing step for these products.

A separate license step

An accident and health license by itself doesn't authorize Medicare supplement or long-term care sales. A resident producer must also:

• pass a supplemental Medicare supplement/LTC exam, and
• pay the supplemental registration fee (58-33-26(f), 58-33-30(e)(6)).

Only applicants licensed for accident and health may take that exam.

LTC Partnership policies carry extra training. Producers licensed after March 7, 2011 complete 8 hours of Partnership education before selling them, then 4 hours every compliance period. Insurers must verify that their agents comply (11 NCAC 06A .0814).

Medicare supplement (Article 54)

Sale and disclosure

• Outline of coverage. It's delivered at the time of application (58-54-25(a)).
• Free look. The buyer may return the policy within 30 days of delivery for a full premium refund (58-54-30).
• Advertising. Insurers give the Commissioner a copy of every Medigap advertisement before it's used in North Carolina (58-54-35).
• Attained-age rating. It must be disclosed at application, with an illustration of premium increases over at least 10 policy years (58-54-25(f)).
• "Above Medicare" policies. A policy whose benefits are limited to Medicare-approved amounts must carry a 10-point caution that benefits are limited to those approved by Medicare (58-63-15(9)).

Benefit rules

• Preexisting conditions. Claims for losses more than six months after the effective date can't be denied for a preexisting condition, and the look-back can't exceed six months (58-54-10(d)).
• No duplication. A Medigap policy may not duplicate benefits Medicare provides (58-54-10(a)).

Replacement commissions. When a policy is replaced with a substantially similar one from the same insurer, the producer may be paid no more than the renewal compensation on the old policy (58-54-20(c)).

Under 65 on Medicare due to disability

• Plan A must be offered to a person eligible for Medicare because of disability before 65.
• Plan D or G must also be offered if the insurer markets either to people turning 65.
• Both apply when the person applies within six months of enrolling in Part B (58-54-45(a1)).
• If such a person loses managed care coverage, they have a guaranteed right to buy Plan A, D or G within 63 days (58-54-45(b)).

Counseling. NCDOI's SHIIP (Seniors' Health Insurance Information Program) gives free counseling on Medicare, Medigap and long-term care (58-2-31).

Long-term care insurance (Article 55)

Before the sale

• The personal worksheet and the "things you should know before you buy" disclosure are completed and given before the application is taken (58-55-31(c)(1)).
• The outline of coverage is delivered at the time of application, or by policy delivery for direct-response sales (58-55-30(h)).
• Financial suitability. Insurers must use a financial suitability test. An applicant who doesn't meet the standards gets a letter and may waive the results and still buy (58-55-31(c)(2)).

Policy rules

• Free look. 30 days from delivery, with a full refund unless benefits were received (58-55-30(f)).
• Renewal. The policy can't be canceled or nonrenewed because of the insured's age or declining health (58-55-30(b)(1)).
• Levels of care. A policy can't cover only skilled nursing care, or give significantly more coverage for skilled care than for lower levels of care (58-55-30(b)(3)).
• Preexisting conditions. The look-back is at most six months, and losses may be excluded only if they begin within six months of the effective date (58-55-30(c)(2)).
• No prior hospitalization may be required for any benefit (58-55-30(d)).
• Prior institutional stays. Noninstitutional benefits that require a prior institutional stay can't require more than 30 days. Home health care can't require one at all (58-55-30(d3)).
• Nonforfeiture. Every policy must offer nonforfeiture benefits, at minimum reduced paid-up, extended term or a shortened benefit period (58-55-31(a)).

Older applicants under other health policies

For a new individual hospitalization or accident and health policy issued to someone over 65, preexisting conditions include only conditions specifically eliminated by rider (58-51-60).

Common exam traps

• Medigap and LTC sales need a separate supplemental exam on top of the A&H license.
• The free look is 30 days for both Medigap and LTC.
• The Medigap preexisting limit is six months.
• Disabled people under 65 who lose managed care have 63 days to buy Plan A, D or G.
• The LTC worksheet comes before the application, and the outline of coverage at application.
• An LTC policy can't be skilled-care only and can't require prior hospitalization.
• LTC Partnership training: 8 hours first, then 4 hours each period.