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Question 1Medicare
A beneficiary first becomes eligible for Medicare Part A in March. During which period may the beneficiary first enroll in a stand-alone Medicare Prescription Drug Plan (Part D)?
- The annual Open Enrollment Period running October 15 through December 7
- The 7-month period beginning 3 months before the month of Part A eligibility and ending 3 months after it Correct answer.
- Any time within 12 months after the Part A effective date
- Only during the Medicare Advantage Open Enrollment Period from January 1 through March 31
Explanation
The Initial Enrollment Period for Part D is a 7-month window: the 3 months before the month of first Medicare eligibility, the eligibility month itself, and the 3 months after. A beneficiary who does not enroll during that window generally must wait for a later valid enrollment period.
Question 2Medicare
Which statement accurately describes the standard Medicare Part B premium structure?
- It is a flat premium identical for every enrollee regardless of income
- It is set individually by each Medicare Advantage plan
- It is income-related, with higher-income beneficiaries paying an income-related monthly adjustment amount Correct answer.
- It is paid entirely by the federal government for all beneficiaries
Explanation
Part B uses income-related monthly adjustment amounts (IRMAA), so beneficiaries above certain modified adjusted gross income thresholds pay more than the standard premium. Most beneficiaries pay the standard amount, but the structure is explicitly income-related.
Question 3Medicare
A beneficiary enrolled in Original Medicare (Part A and Part B) wants coverage for routine dental care and hearing aids. What is the most accurate statement about that coverage?
- Original Medicare covers routine dental care but excludes hearing aids
- Original Medicare generally excludes routine dental care and hearing aids, so separate coverage may be needed Correct answer.
- Original Medicare covers these services only if the beneficiary also has Part D
- Original Medicare covers both services in full once the Part B deductible is met
Explanation
Original Medicare generally does not cover routine dental care or hearing aids, though it may cover dental services needed for certain covered medical treatments. Beneficiaries seeking routine dental and hearing aid benefits typically obtain separate coverage or enroll in a Medicare Advantage plan that offers them.
Question 4Medicare
A beneficiary who has only Original Medicare asks whether there is a limit on how much a hospital can bill for covered inpatient services. What is the correct answer?
- The hospital must accept Medicare's approved amount as payment in full for covered services, aside from applicable deductibles and coinsurance Correct answer.
- The hospital may charge up to 15 percent above the approved amount
- The hospital may bill the difference only if the beneficiary signs a private contract
- There is no limit, so the hospital may balance bill any remaining amount
Explanation
Participating providers agree to accept Medicare's approved amount as payment in full for covered services, with the beneficiary responsible only for deductibles and coinsurance. Balance billing restrictions do not apply the same way to nonparticipating providers, but the general rule for covered care is assignment.
Question 5Medicare
What is the primary purpose of Medigap (Medicare Supplement) coverage?
- To replace Part A and Part B entirely
- To help pay Medicare cost-sharing such as deductibles, coinsurance, and copayments Correct answer.
- To provide prescription drug coverage in place of Part D
- To pay for long-term custodial nursing home care
Explanation
Medigap policies are sold by private insurers to help cover Original Medicare cost-sharing, such as deductibles, coinsurance, and copayments. They do not replace Medicare itself and cannot be used with Medicare Advantage as a supplement.
Question 6Medicare
Which entity administers the Medicare program at the federal level and sets national coverage policy?
- The Centers for Medicare & Medicaid Services (CMS) Correct answer.
- The Social Security Administration
- The National Association of Insurance Commissioners
- The state department of insurance
Explanation
CMS is the federal agency within the Department of Health and Human Services that administers Medicare and establishes national coverage determinations. State insurance departments regulate insurance products such as Medigap but do not run Medicare itself.
Question 7Medicare
A beneficiary enrolled in a Medicare Advantage plan wants to know how the plan delivers Part A and Part B benefits. Which statement is correct?
- The plan contracts with CMS to provide all Part A and Part B benefits and may add extra benefits Correct answer.
- The plan is identical to a Medigap policy in how it pays claims
- The plan pays secondary to Original Medicare, which remains the primary payer
- The plan covers only hospital stays and excludes physician services
Explanation
A Medicare Advantage plan receives a capitated payment from CMS and is responsible for delivering all Medicare Part A and Part B benefits, often with additional benefits such as dental or vision. The beneficiary generally must use the plan's network and rules rather than Original Medicare's fee-for-service structure.
Question 8Medicare
Which service is covered under Medicare Part A rather than Part B?
- Clinical laboratory tests ordered in an office setting
- Physician office visits
- Inpatient hospital care Correct answer.
- Outpatient physical therapy
Explanation
Part A covers inpatient hospital care, skilled nursing facility care after a qualifying stay, hospice, and some home health services. Part B generally covers outpatient services such as physician visits, outpatient therapy, and lab tests.
Question 9Medicare
A beneficiary with Part B only receives a covered service from a physician who has opted out of Medicare and signed a private contract. What should the beneficiary expect?
- Medicare will pay 80 percent, and the physician may bill the remainder
- Medicare will pay nothing for the service, and the beneficiary pays the physician directly under the contract terms Correct answer.
- Medicare will pay only if the beneficiary assigns benefits to the physician
- Medicare will pay the claim at the participating provider rate
Explanation
When a physician has opted out of Medicare and the beneficiary signs a valid private contract, Medicare does not pay for the service and the beneficiary is responsible for the physician's charges. The private contract must meet specific requirements, including informing the beneficiary of the consequences.
Question 10Medicare
A beneficiary is enrolled in a Medicare Advantage plan and moves permanently outside the plan's service area. What is the beneficiary's most reliable option?
- Remain in the plan and use out-of-network providers at the same cost sharing
- Keep the plan but add a Medigap policy to cover services outside the area
- Use the move as a special enrollment period to choose another Medicare Advantage plan or return to Original Medicare Correct answer.
- Wait until the next Annual Open Enrollment Period to make any change
Explanation
A permanent move outside a plan's service area creates a special enrollment period, allowing the beneficiary to enroll in another Medicare Advantage plan or return to Original Medicare, with the option to add Part D. Relying on out-of-network access is not guaranteed because the plan may not serve the new area at all.
Question 11Medicare
A beneficiary has a stand-alone Part D plan and is later determined to be eligible for the low-income subsidy (Extra Help). What is the effect on the Part D late enrollment penalty?
- The penalty doubles because the subsidy changes the plan's premium
- The penalty is permanently waived for all beneficiaries receiving Extra Help
- The penalty is eliminated or reduced for the period the beneficiary qualifies for Extra Help Correct answer.
- The penalty continues unchanged because Extra Help affects only premiums
Explanation
Beneficiaries who qualify for Extra Help are not subject to the Part D late enrollment penalty for months in which they are eligible for the subsidy. If eligibility ends, the penalty may be recalculated based on the remaining non-subsidized months.
Question 12Medicare
A beneficiary enrolled in Original Medicare wants to know when the Part B annual deductible resets. What should the agent explain?
- The deductible resets on January 1 each year Correct answer.
- The deductible resets on the beneficiary's birthday each year
- The deductible resets each time the beneficiary is hospitalized
- The deductible is a one-time amount that never resets
Explanation
The Part B deductible is an annual amount that resets at the start of each calendar year, so the beneficiary may need to meet it again in January. The Part A inpatient deductible is calculated per benefit period rather than per calendar year.
Question 13Medicare
A beneficiary with a Medicare Advantage Prescription Drug (MA-PD) plan asks whether a separate stand-alone Part D plan is needed. What is the correct response?
- No, the MA-PD plan already includes prescription drug coverage, and adding a separate Part D plan is not permitted Correct answer.
- No, but the beneficiary must still pay a separate Part D premium to CMS
- Yes, a stand-alone Part D plan is always required in addition to an MA-PD plan
- Yes, but only if the beneficiary has a chronic condition
Explanation
An MA-PD plan combines Medicare Advantage coverage with Part D drug coverage in a single plan. Enrolling in a separate stand-alone Part D plan while in an MA-PD plan would improperly duplicate coverage and generally causes disenrollment from one of them.
Question 14Medicare
A beneficiary who delayed enrolling in Part B because of active employer coverage now has a special enrollment period. Which statement about that period is accurate?
- It lasts for 6 months after the beneficiary turns 65
- It lasts for 63 days after the employer coverage ends
- It lasts for 8 months after the employer coverage ends or employment ends, whichever occurs first Correct answer.
- It lasts indefinitely as long as the beneficiary was previously employed
Explanation
The Part B special enrollment period for people with group health coverage based on current employment lasts 8 months after the earlier of the month employment ends or the month the group coverage ends. Enrolling during this period generally avoids a Part B late enrollment penalty.
Question 15Medicare
A beneficiary in a Medicare Advantage plan has a chronic condition and wants to switch to a different Medicare Advantage plan during the Medicare Advantage Open Enrollment Period. What is true about that period?
- It runs October 15 through December 7 and permits unlimited changes
- It permits changes only if the beneficiary also enrolls in a stand-alone Part D plan
- It runs January 1 through March 31 and permits one change to another Medicare Advantage plan or back to Original Medicare Correct answer.
- It runs only during the beneficiary's birth month
Explanation
The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 each year and allows a beneficiary already in a Medicare Advantage plan to make one change, either to another Medicare Advantage plan or to Original Medicare with or without Part D. It is distinct from the fall Annual Open Enrollment Period.
Question 16Medicare
A beneficiary with Original Medicare and a Medigap plan is considering a Medicare Advantage plan. What should the agent explain about how the two interact?
- The Medigap plan will continue to pay the Medicare Advantage plan's copayments
- The Medigap plan pays the Medicare Advantage plan premium
- The Medigap plan cannot be used to pay Medicare Advantage cost sharing, and the beneficiary may be unable to keep the Medigap policy Correct answer.
- The Medigap plan automatically converts into a Medicare Advantage plan
Explanation
Medigap policies work only with Original Medicare and cannot be used to pay Medicare Advantage copayments or other cost sharing. Beneficiaries who switch to Medicare Advantage generally cannot keep a Medigap policy, and returning to Original Medicare later may require medical underwriting in most states.
Question 17Medicare
Which statement best describes the role of a Medicare Advantage Organization's provider network in a Health Maintenance Organization (HMO) plan?
- The beneficiary may see any provider who accepts Medicare, with no network restrictions
- The network applies only to hospital care and not to physician services
- The beneficiary may see out-of-network providers at the same cost as in-network providers
- Care generally must be received from in-network providers, except for emergencies or urgently needed care Correct answer.
Explanation
HMO plans generally require beneficiaries to use the plan's network of providers, with exceptions for emergency or urgently needed care and certain out-of-area situations. Non-emergency care from out-of-network providers may not be covered or may cost significantly more.
Question 18Medicare
A beneficiary is admitted to a skilled nursing facility after a qualifying inpatient hospital stay. Which requirement is central to Part A coverage of the skilled nursing facility stay?
- The beneficiary must have a Medigap policy in force
- The beneficiary must have a prior emergency room visit of any length
- The beneficiary must have been enrolled in Part B for at least one year
- The beneficiary must have a prior inpatient hospital stay of at least 3 consecutive days related to the condition Correct answer.
Explanation
Part A skilled nursing facility coverage generally requires a qualifying inpatient hospital stay of at least 3 consecutive days for a related condition, followed by admission within a specified timeframe. The care must also be skilled and ordered by a physician.
Question 19Medicare
A beneficiary enrolled in a stand-alone Part D plan wants to know whether the plan can change its formulary during the year. What is accurate?
- The plan may change its formulary only with the beneficiary's written consent
- The plan may change its formulary only at the beneficiary's request
- The plan may never change its formulary during the plan year
- The plan may make certain formulary changes during the year, subject to CMS rules and notice requirements Correct answer.
Explanation
Part D plans may make certain formulary changes during the year, but CMS rules restrict when and how changes may occur and require notice to affected beneficiaries. Plans cannot make arbitrary mid-year changes without complying with those requirements.
Question 20Medicare
A beneficiary is enrolled in a Medicare Advantage plan and needs a service that the plan denies as not medically necessary. What is the beneficiary's first step in the appeal process?
- Request a reconsideration of the plan's denial through the plan's appeal process Correct answer.
- Wait until the next Annual Open Enrollment Period and switch plans
- File a lawsuit in federal court immediately
- Contact the Social Security Administration to override the denial
Explanation
The first level of appeal for a Medicare Advantage organization determination is a reconsideration request filed with the plan. If the plan upholds the denial, further levels of appeal, including independent review, may be available.
Question 21Medicare
A beneficiary has Original Medicare and no other coverage. After the Part B deductible is met, how does Medicare typically pay for a covered physician service?
- Medicare pays nothing until the beneficiary pays the full charge
- Medicare pays 100 percent and the beneficiary owes nothing
- Medicare pays 80 percent of the approved amount, and the beneficiary owes the remaining 20 percent coinsurance Correct answer.
- Medicare pays 50 percent and the beneficiary owes 50 percent
Explanation
After the Part B deductible is satisfied, Medicare generally pays 80 percent of the approved amount for covered services, and the beneficiary is responsible for the 20 percent coinsurance. A Medigap policy or other coverage may help with that cost sharing.
Question 22Medicare
A beneficiary who is still working and has group health coverage through a large employer asks how Medicare coordinates with that coverage at age 67. What is the general rule?
- Medicare and the employer plan each pay 50 percent of every claim
- Medicare pays primary and the employer plan pays secondary
- The employer group health plan pays primary and Medicare pays secondary Correct answer.
- Neither plan pays until the beneficiary enrolls in a Medicare Advantage plan
Explanation
When a beneficiary has group health coverage through a current employer with 20 or more employees, the employer plan is generally primary and Medicare is secondary. This is why such beneficiaries may delay Part B without a penalty while they remain actively employed and covered.
Question 23Medicare
A beneficiary with Part A and Part B enters a new benefit period after a hospital stay. Which statement correctly describes the Part A inpatient deductible?
- It is charged once per calendar year regardless of the number of admissions
- It is waived if the beneficiary has a Medigap Plan G
- It may apply again for each new benefit period, which begins after a specified break in inpatient care Correct answer.
- It applies only to the first hospitalization of the beneficiary's lifetime
Explanation
The Part A inpatient deductible applies per benefit period, and a new benefit period can begin after the beneficiary has been out of a hospital or skilled nursing facility for a specified period. This differs from the Part B deductible, which is annual.
Question 24Medicare
A beneficiary's Part D plan has a coverage gap and the beneficiary reaches the catastrophic phase. What is the general effect on the beneficiary's cost sharing for covered drugs in the catastrophic phase?
- The beneficiary pays nothing for any drug, including non-formulary drugs
- The beneficiary pays 50 percent coinsurance for all covered drugs
- The beneficiary pays no more than a small fixed amount per prescription for covered drugs Correct answer.
- The beneficiary pays the full negotiated price for each covered drug
Explanation
In the catastrophic phase of the Part D benefit, the beneficiary's cost sharing for covered drugs is limited to a small fixed copayment amount set by law. Non-formulary drugs remain subject to plan rules and are not automatically covered.
Question 25Medicare
A beneficiary enrolled in a Medicare Advantage plan wants to enroll in a stand-alone Part D plan during the Annual Open Enrollment Period. What is the likely result?
- The Medicare Advantage plan will automatically convert into a Part D plan
- The stand-alone Part D plan will pay the Medicare Advantage plan's premium
- The beneficiary may hold both an MA plan and a stand-alone Part D plan simultaneously
- Enrolling in a stand-alone Part D plan generally disenrolls the beneficiary from the Medicare Advantage plan and returns them to Original Medicare Correct answer.
Explanation
A stand-alone Part D plan cannot be combined with most Medicare Advantage plans, so enrolling in one generally causes disenrollment from the Medicare Advantage plan and a return to Original Medicare. The beneficiary should understand this consequence before making the change.
Question 26Medicare
A beneficiary newly entitled to Medicare Part A wants to know the standard deadline for enrolling in Part B during the Initial Enrollment Period. What should the agent explain?
- A six-month window that begins the month after entitlement ends
- A seven-month window beginning three months before the month of entitlement and ending three months after it Correct answer.
- An annual window each January through March
- A three-month window that opens only in the month entitlement begins
Explanation
The Initial Enrollment Period is a seven-month window: the three months before the month a person becomes entitled to Part A, the entitlement month itself, and the three months after. Enrolling in the first three months gives the earliest effective date. The agent should also note that missing this window can trigger late-enrollment penalties.
Question 27Medicare
A beneficiary asks which preventive services Original Medicare covers without charging the Part B deductible or coinsurance. Which answer is accurate?
- Routine dental cleanings and fillings
- Long-term custodial care in a nursing home
- Hearing aids and routine eye exams for glasses
- Annual wellness visits and screening mammograms Correct answer.
Explanation
Medicare covers a defined list of preventive services, including the annual wellness visit and screening mammography, generally at no cost sharing when the provider accepts assignment. Dental, hearing aids, routine vision hardware, and custodial care are largely excluded from Original Medicare. Agents should verify the specific service against current coverage rules.
Question 28Medicare
A beneficiary with Part B needs a service that Original Medicare covers. The physician accepts assignment. What does the beneficiary generally owe?
- A balance bill of up to 15 percent above the approved amount
- Nothing at all, because assignment eliminates all cost sharing
- The Part B coinsurance of 20 percent after the annual deductible, with Medicare paying the approved amount less that share Correct answer.
- The full charge, because assignment shifts all cost to the beneficiary
Explanation
When a physician accepts assignment, the physician agrees to Medicare's approved amount as payment in full. Medicare pays 80 percent of that amount after the deductible, and the beneficiary owes the 20 percent coinsurance. Balance billing is not permitted for assigned claims.
Question 29Medicare
A beneficiary wants to know the general rule for when Medicare Part A hospital inpatient coverage begins to require a per-benefit-period deductible. What should the agent explain?
- The deductible applies only to outpatient hospital visits
- The deductible applies once every calendar year in January
- The deductible applies once each benefit period rather than once per calendar year Correct answer.
- The deductible is waived whenever the beneficiary has a Medigap plan
Explanation
Part A uses a benefit period concept: a benefit period begins when a beneficiary is admitted as an inpatient and ends after a set number of days without inpatient care. The inpatient deductible applies at the start of each new benefit period, not on a fixed calendar schedule. This differs from the Part B deductible, which resets annually.
Question 30Medicare
A beneficiary asks whether Medicare covers hospice care and what the beneficiary generally pays for it. Which statement is most accurate?
- Hospice is covered only if the beneficiary is enrolled in a Medicare Advantage plan
- Hospice is covered only under Part B and requires 20 percent coinsurance on all services
- Hospice is covered under Part A with limited cost sharing for outpatient drugs and respite care Correct answer.
- Hospice is not covered by Medicare at all
Explanation
The Medicare hospice benefit is covered under Part A for beneficiaries who elect it and meet eligibility criteria, including a terminal prognosis. Coinsurance is generally limited to small amounts for outpatient drugs and respite care. Routine hospice care is largely covered with little or no cost sharing.
Question 31Medicare
A beneficiary with Original Medicare asks how a Medigap policy interacts with Medicare coverage. What should the agent explain?
- Medigap is the same product as a Medicare Advantage plan
- Medigap replaces Original Medicare and becomes the primary payer
- Medigap covers prescription drugs in place of a Part D plan
- Medigap supplements Original Medicare by paying some or all of the beneficiary's cost sharing Correct answer.
Explanation
Medigap policies are sold by private insurers to supplement Original Medicare. They help pay deductibles, coinsurance, and copayments according to the standardized plan letter. Medigap does not replace Medicare, and by law it cannot include prescription drug coverage, so a separate Part D plan is generally needed.
Question 32Medicare
A beneficiary enrolled in a Medicare Advantage plan asks whether the plan must provide the same benefits as Original Medicare. Which answer is correct?
- The plan must cover all Medicare-covered services, though cost sharing and network rules may differ Correct answer.
- The plan may limit coverage to preventive services only
- The plan is permitted to exclude hospital coverage to reduce premiums
- The plan may omit Part B services if it offers extra dental benefits instead
Explanation
Medicare Advantage plans contract with CMS to provide at least all services covered by Original Medicare, except hospice, which remains under Part A. Plans may add extra benefits and may use networks and prior authorization, but they cannot drop required Medicare-covered services. Cost sharing is subject to Medicare limits.
Question 33Medicare
A beneficiary asks what the Part D late enrollment penalty is based on. Which explanation is correct?
- A reduction in the Part D deductible for the following year
- A surcharge that expires after the beneficiary's first year in the plan
- A permanent premium penalty calculated from the number of months without creditable drug coverage Correct answer.
- A one-time fine paid directly to the pharmacy at the first prescription fill
Explanation
The Part D late enrollment penalty applies when a beneficiary goes without creditable prescription drug coverage for a continuous period of 63 days or more after initial enrollment. The penalty is added to the premium and generally lasts as long as the beneficiary is enrolled in a Part D plan. It is not a one-time fee.
Question 34Medicare
A beneficiary with Original Medicare and a Part D plan asks whether the Part D plan can require prior authorization for a covered drug. What should the agent explain?
- Yes, but only for generic drugs and never for brand drugs
- No, Part D plans must cover every drug with no utilization management
- Yes, Part D plans may use tools such as prior authorization and step therapy within CMS rules Correct answer.
- No, prior authorization is permitted only in Medicare Advantage medical plans
Explanation
Part D sponsors may apply utilization management tools, including prior authorization, quantity limits, and step therapy, to covered drugs as long as CMS rules are followed. Beneficiaries have appeal and exception rights when a request is denied. The agent should explain those rights rather than promise unrestricted access.
Question 35Medicare
A beneficiary in a Medicare Advantage plan needs urgent care while traveling outside the plan's service area. How should the agent describe the plan's obligation?
- The plan owes nothing because care occurred outside the service area
- The plan covers the care only if the beneficiary pays the full cost and seeks reimbursement later
- The plan must cover urgently needed services, and dialysis may be covered when received from an out-of-network provider Correct answer.
- The plan covers the care only if the beneficiary first switches to Original Medicare
Explanation
Medicare Advantage plans must cover emergency and urgently needed services regardless of where they occur, and they cannot require prior authorization for emergency care. Plans must also cover out-of-network dialysis for enrollees who need it. The plan may apply in-network cost sharing in these situations.
Question 36Medicare
A beneficiary with End-Stage Renal Disease is considering a Medicare Advantage plan. Which statement best reflects current enrollment rules?
- Individuals with ESRD are permanently barred from Medicare Advantage enrollment
- Individuals with ESRD must first complete a 24-month waiting period before any Medicare Advantage option
- Individuals with ESRD may enroll only during the General Enrollment Period
- Individuals with ESRD may enroll in Medicare Advantage plans, and plans must cover necessary dialysis services Correct answer.
Explanation
Federal law now allows individuals with End-Stage Renal Disease to enroll in Medicare Advantage plans. Plans must cover dialysis and related services, and beneficiaries retain access to Medicare-covered care. Agents should verify network dialysis access before recommending a plan.
Question 37Medicare
A beneficiary wants to know how Medicare Advantage plans are paid compared with Original Medicare. Which statement is accurate?
- The plan is paid only when the enrollee files a claim with CMS
- The plan receives no federal payment and is funded solely by premiums
- CMS pays the plan a capitated amount per enrollee, and the plan bears the financial risk for covered services Correct answer.
- CMS pays the plan fee-for-service for each service the enrollee receives
Explanation
Medicare Advantage organizations are paid a risk-adjusted capitation rate per enrollee, and they assume responsibility for delivering Medicare-covered benefits. Because payment is fixed per member, plans manage utilization and networks to control costs. This contrasts with Original Medicare's fee-for-service payment structure.
Question 38Medicare
A beneficiary asks what the Medicare Advantage Open Enrollment Period allows after the Annual Enrollment Period has ended. Which answer is correct?
- A chance to add a stand-alone Part D plan while remaining in a Medicare Advantage plan
- An unlimited number of plan changes throughout the year
- A one-time election to switch to another Medicare Advantage plan or return to Original Medicare, with a Part D option Correct answer.
- An opportunity to enroll in Medigap with guaranteed issue rights in every state
Explanation
The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 each year. Enrollees may make one change: switch to another Medicare Advantage plan or return to Original Medicare and add a Part D plan. It does not provide unlimited changes or guaranteed Medigap issuance.
Question 39Medicare
A beneficiary with Original Medicare is hospitalized and asks how the Part A deductible and coinsurance work for a long stay. Which statement is accurate?
- The deductible applies at the start of the benefit period, and daily coinsurance begins after the covered days are used Correct answer.
- The deductible applies each day of the hospital stay
- There is no cost sharing for inpatient hospital care under Part A
- Coinsurance begins on the first day of the stay with no deductible
Explanation
Part A charges an inpatient deductible at the beginning of each benefit period. The first set of covered days requires no daily coinsurance, and daily coinsurance then applies for additional days up to the limit. Beyond the covered days, the beneficiary pays all costs unless other coverage applies.
Question 40Medicare
A beneficiary asks how a Medicare Supplement policy sold today is structured compared with older policies. Which statement is correct?
- Each insurer designs a unique benefit package with no standardization
- Medigap plans are sold only by the federal government
- Policies are standardized by letter, and Plans C and F are generally unavailable to newly eligible beneficiaries Correct answer.
- All Medigap policies include prescription drug coverage
Explanation
Medigap policies are standardized by letter so benefits are comparable across insurers, though premiums differ. Beneficiaries newly eligible for Medicare on or after January 1, 2020, generally cannot buy Plans C or F because those plans cover the Part B deductible. Medigap is sold by private insurers, not the federal government.
Question 41Medicare
A beneficiary with a Medicare Advantage plan wants to know how the plan handles a request for a service the plan considers not medically necessary. What should the agent explain?
- The enrollee must switch to Original Medicare to appeal
- The enrollee may file a plan reconsideration, and if upheld may request an independent review by an outside entity Correct answer.
- The enrollee must accept the plan's decision with no appeal
- The enrollee may appeal only after paying for the service in full
Explanation
Medicare Advantage plans must follow Medicare's appeals process. An enrollee can request a plan-level reconsideration, and if the denial is upheld, may request an independent review organization decision. Expedited appeals are available when the standard timeframe could seriously jeopardize health.
Question 42Medicare
A beneficiary with a low income asks about help paying Part D premiums and cost sharing. Which program should the agent describe?
- The Qualified Medicare Beneficiary program, which pays only Part A premiums
- The Low-Income Subsidy, also called Extra Help, which reduces Part D costs for eligible beneficiaries Correct answer.
- The Medicare Savings Program, which covers only Part B premiums
- The State Pharmaceutical Assistance Program, which is available in every state
Explanation
The Low-Income Subsidy, or Extra Help, reduces Part D premiums, deductibles, and copayments for beneficiaries with limited income and resources. Medicare Savings Programs help with Part A and B premiums and, for some categories, cost sharing. Agents should screen for both types of assistance.
Question 43Medicare
A beneficiary asks whether Medicare covers a stay in a skilled nursing facility after a hospital admission. Which condition is generally required?
- A prior stay in an emergency department for observation only
- A qualifying inpatient hospital stay of at least three consecutive days, followed by admission within 30 days Correct answer.
- A referral from a Medicare Advantage plan's dental provider
- A physician order for custodial care in a nursing home
Explanation
Medicare covers skilled nursing facility care when the beneficiary has a qualifying inpatient hospital stay of at least three consecutive days and is admitted to the facility within 30 days. The care must be skilled and ordered by a physician. Custodial care alone is not covered.
Question 44Medicare
A beneficiary with Original Medicare and no other coverage asks how Medicare pays for physician services under Part B. Which statement is accurate?
- Medicare pays 100 percent of the physician's charge with no cost sharing
- Medicare pays 50 percent and the beneficiary owes 50 percent
- Medicare pays 80 percent of the approved amount after the deductible, and the beneficiary owes 20 percent Correct answer.
- Medicare pays nothing until the beneficiary reaches an out-of-pocket maximum
Explanation
Part B generally pays 80 percent of the Medicare-approved amount after the annual deductible is met, leaving the beneficiary responsible for 20 percent coinsurance. Original Medicare has no out-of-pocket maximum, which is why many beneficiaries add Medigap or enroll in Medicare Advantage. Balance billing rules depend on whether the provider accepts assignment.
Question 45Medicare
A beneficiary asks whether a Medicare Advantage plan may require a referral to see a specialist. Which answer is correct?
- Only Original Medicare requires referrals to specialists
- All Medicare Advantage plans prohibit referrals to specialists
- Referrals are required only for emergency care
- HMO plans often require a referral from the primary care physician, while PPO plans generally allow specialist visits without one Correct answer.
Explanation
Referral requirements depend on the plan type. Health Maintenance Organization plans commonly require a primary care referral before a specialist visit, while Preferred Provider Organization plans typically allow direct access. Enrollees should review the plan's evidence of coverage to understand network and referral rules.
Question 46Medicare
A beneficiary who is still working and has group health coverage through a large employer asks how Medicare coordinates with that coverage. Which statement is accurate?
- Medicare pays nothing while the beneficiary is employed
- Medicare always pays first regardless of employer size
- The employer plan pays only after Medicare denies the claim
- The employer group health plan generally pays first, and Medicare pays second Correct answer.
Explanation
When a beneficiary has group health coverage through an employer with 20 or more employees, the employer plan is generally the primary payer and Medicare is secondary. Coordination rules differ for small employers and for disability-based Medicare. The agent should confirm the employer size and the beneficiary's employment status.
Question 47Medicare
A beneficiary has a Medicare Advantage plan and is later diagnosed with a condition that requires care from a specialist outside the plan's network. What should the agent explain about network exceptions?
- The enrollee may request a network exception, and the plan must decide within a specified timeframe Correct answer.
- The enrollee must disenroll from Medicare Advantage before seeing a specialist
- The plan must always approve any out-of-network specialist without review
- The enrollee must pay the full cost of out-of-network care with no exception process
Explanation
Medicare Advantage enrollees can request an exception to use an out-of-network provider when the plan's network is inadequate for their needs. Plans must respond within CMS-specified timeframes and follow coverage rules. If the request is denied, the enrollee has appeal rights.
Question 48Medicare
A beneficiary is enrolled in a stand-alone Part D plan and asks how the coverage gap, or doughnut hole, affects brand-name drug costs. Which statement is most accurate?
- Manufacturer discounts and plan contributions reduce the beneficiary's share during the gap, and catastrophic coverage begins after the out-of-pocket threshold Correct answer.
- The gap applies only to generic drugs and never to brand drugs
- The beneficiary must change plans to exit the coverage gap
- The beneficiary pays the full retail price for all drugs during the gap
Explanation
In the Part D coverage gap, manufacturer discounts and plan contributions reduce the beneficiary's out-of-pocket cost for brand-name drugs. Once the beneficiary's out-of-pocket spending reaches the annual threshold, catastrophic coverage limits further cost sharing. The exact amounts change yearly and should be verified.
Question 49Medicare
A beneficiary with Original Medicare is considering a Medicare Advantage plan but is concerned about prior authorization for post-acute care. Which statement best describes the plan's obligations?
- The plan may deny post-acute care without any review or appeal rights
- The plan may require the beneficiary to pay for all post-acute care out of pocket
- The plan must cover unlimited custodial care in a nursing home
- The plan may require prior authorization for some post-acute services but must follow Medicare coverage criteria and appeal rules Correct answer.
Explanation
Medicare Advantage plans may apply prior authorization to certain post-acute services, but they must use Medicare coverage criteria and provide appeal rights. Denials must be supported by the plan's rationale, and enrollees can request reconsideration and independent review. Custodial care remains excluded.
Question 50Medicare
A beneficiary asks whether Medicare covers telehealth services and how coverage has changed. Which statement is most accurate?
- Medicare covers all telehealth services with no restrictions or cost sharing
- Telehealth is covered only outside the United States
- Medicare covers certain telehealth services, and coverage rules and cost sharing depend on the service and the setting Correct answer.
- Medicare covers no telehealth services under any circumstances
Explanation
Medicare covers a range of telehealth services, but the rules depend on the service, the originating site, and the practitioner type. Cost sharing generally applies as it would for in-person care. Because telehealth policy has changed frequently, agents should verify current coverage before advising.