Medicare's parts, Medicaid and the basics of long-term care are covered in the national Senior and Special Needs guide. This guide covers Tennessee's Medicare supplement rules (Rule 0780-01-58) and long-term care rules (Tenn. Code Ann. 56-42 and Rule 0780-01-61).

Medicare supplement (Medigap)

Open enrollment (Rule 0780-01-58-.14)

• The 6 months that begin when a person is both 65 or older and enrolled in Part B.
• During that window, an issuer can't deny, condition or price coverage based on health status, claims or medical condition.
• Preexisting conditions: with 6 months or more of creditable coverage, no exclusion applies. With less, the exclusion is reduced by the creditable coverage.

Policy rules

• Free look: 30 days from delivery (.20).
• Required notice on the first page: "Notice to buyer: This policy may not cover all of your medical expenses" (.23).
• Benefits can't be based on "usual and customary" or similar standards (.20).
• Medicare change notices go out no later than 30 days before the annual effective date of Medicare's changes (.20).
• Medicaid suspension: benefits and premiums may be suspended for up to 24 months while the person is on Medicaid. The request must be made within 90 days of becoming eligible (.21).
• Loss ratios: at least 65% for individual policies and 75% for group (.17).

Selling rules

• The outline of coverage is given when the application is presented (.20).
• The Guide to Health Insurance for People with Medicare is given at application, and the applicant acknowledges receiving it.
• No duplicate policies: you can't sell a policy that would give someone more than one Medigap policy (.24).
• A Medicare Advantage enrollee can be issued Medigap only if it takes effect after the Part C coverage ends (.24).
• Replacing a policy that has been in force at least 6 months: the new policy can't impose new preexisting, waiting or elimination periods for similar benefits (.26).
• Commissions: first-year pay can't exceed 200% of second-year pay. Renewal pay equals the second year's for at least 5 renewal years (.19).
• Prohibited marketing (.23):
  • twisting
  • high-pressure tactics, meaning force, fright, threat or undue pressure
  • cold lead advertising, meaning hiding that an agent will make contact

Long-term care

Policy protections

• An LTC policy must cover at least 12 consecutive months of care outside an acute-care hospital unit (56-42-103).
• Free look: 30 days from delivery (56-42-105).
• An insurer can't cancel or nonrenew because of age or declining health (56-42-105).
• No prior hospitalization may be required. Home health benefits can't require prior institutionalization.
• Preexisting conditions: the look-back is no more than 6 months, and the exclusion lasts no more than 6 months after the effective date.
• Contestability: after 2 years, the insurer must show knowing and intentional misrepresentation (56-42-107).
• The insurer must explain a claim denial in writing within 60 days of a written request (56-42-105).
• Alzheimer's disease can't be excluded under a mental or nervous disorder exclusion (Rule 0780-01-61-.06).

Benefit triggers (Rule 0780-01-61-.27)

• A policy can require no more than a deficiency in 3 ADLs, or a cognitive impairment.
• The ADLs are bathing, continence, dressing, eating, toileting and transferring.

Protection against lapse (.07)

• The applicant names at least one other person to receive lapse notices, or signs a waiver.
• The lapse notice goes out at least 30 days before the lapse, and no sooner than 30 days after the premium was due.
• Reinstatement is available within 5 months if a cognitive or functional impairment caused the lapse.

Inflation protection

• It's included unless the policyholder signs a rejection (.13).
• Partnership policies require (.31):
  • compound annual protection under age 61
  • some protection from 61 to 75
  • optional at 76 and up

Selling rules

• The LTC shopper's guide is delivered before an application is presented (.30).
• Producers complete 8 hours of LTC training once, then 4 hours every 24 months (.31).

Common exam traps

• Medigap and LTC free looks are both 30 days. The individual health free look is 10 days.
• Medigap open enrollment requires 65+ and Part B.
• Medigap loss ratios: 65% individual, 75% group.
• LTC benefit triggers: at most 3 ADLs, or cognitive impairment.
• LTC lapse protection: a third-party designee, 30-day notice and 5-month reinstatement.