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Medicare, Medicaid, and LTC

Medicare Parts A through D, enrollment periods, Medigap, Medicaid, and long-term care triggers, ADLs, partnership policies, and required LTC provisions.

Study questions and answers

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1. Medicare Part A primarily covers:

  1. Inpatient hospital care
  2. Physician services
  3. Prescription drugs
  4. Private Medicare Advantage plans
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A. Inpatient hospital care
Part A covers hospital, skilled nursing facility, hospice, and some home health care. It is premium-free for most people with 40 quarters of work.

2. Medicare Part B primarily covers:

  1. Inpatient hospital care
  2. Prescription drugs
  3. Physician and outpatient services, and it requires a monthly premium
  4. Long-term custodial care
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C. Physician and outpatient services, and it requires a monthly premium
Part B is medical insurance. Most enrollees pay a monthly premium.

3. Medicare Part D covers:

  1. Inpatient hospital care
  2. Physician services
  3. Long-term care
  4. Prescription drugs
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D. Prescription drugs
Part D drug plans are offered by private insurers that are approved by Medicare.

4. Medicare Part C (Medicare Advantage) refers to:

  1. Federal supplemental drug coverage
  2. Plans offered by private insurers approved by Medicare that provide Part A and Part B benefits
  3. A Medigap policy
  4. State Medicaid coverage
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B. Plans offered by private insurers approved by Medicare that provide Part A and Part B benefits
Medicare Advantage plans, often HMOs or PPOs, replace Original Medicare for the enrollee.

5. The Medigap open enrollment period is:

  1. The 3 months before turning 65
  2. Six months, beginning when the person is 65 or older and enrolled in Part B
  3. Any time of year
  4. 12 months after retirement
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B. Six months, beginning when the person is 65 or older and enrolled in Part B
During open enrollment, a Medigap insurer cannot deny coverage or charge more because of health status.

6. Medicaid is:

  1. A joint federal and state program for people with limited income and resources
  2. A federal program only for people age 65 and older
  3. A private insurance product
  4. An employer-sponsored plan
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A. A joint federal and state program for people with limited income and resources
Medicaid is needs based. Eligibility and benefits vary by state within federal guidelines.

7. For a tax-qualified long-term care policy, benefits are triggered when the insured cannot perform how many activities of daily living (ADLs), or has severe cognitive impairment?

  1. 3 of 6
  2. 1 of 6
  3. 2 of 6
  4. 4 of 6
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C. 2 of 6
The inability to perform 2 of 6 ADLs must be expected to last at least 90 days.

8. Which of the following is an activity of daily living (ADL)?

  1. Driving
  2. Managing finances
  3. Cooking
  4. Bathing
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D. Bathing
The ADLs are bathing, dressing, eating, toileting, transferring, and continence. Driving, cooking, and managing money are instrumental activities.

9. Help with activities of daily living that can be provided by people without medical training is called:

  1. Custodial care
  2. Skilled care
  3. Intermediate care
  4. Acute care
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A. Custodial care
Skilled care is daily care ordered by a physician and given by licensed professionals. Intermediate care is occasional skilled care.

10. At a minimum, long-term care policies must be:

  1. Cancellable
  2. Guaranteed renewable
  3. Optionally renewable
  4. Conditionally renewable
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B. Guaranteed renewable
LTC policies must be at least guaranteed renewable. The insurer cannot cancel them but may raise premiums by class.

11. Which of the following people is NOT eligible for Medicare?

  1. A 40-year-old with ALS who receives Social Security disability benefits
  2. A 50-year-old who has received Social Security disability benefits for 12 months
  3. A 66-year-old retiree
  4. A 45-year-old with end-stage renal disease
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B. A 50-year-old who has received Social Security disability benefits for 12 months
Disabled people usually qualify after receiving 24 months of Social Security disability benefits. People with ALS qualify immediately.

12. Medicare is administered by the:

  1. Centers for Medicare and Medicaid Services
  2. NAIC
  3. State insurance departments
  4. Social Security Administration only
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A. Centers for Medicare and Medicaid Services
The Social Security Administration handles much of the enrollment.

13. The Medicare initial enrollment period lasts:

  1. 3 months before turning 65
  2. 7 months, beginning 3 months before the month the person turns 65
  3. 6 months after turning 65
  4. 12 months after turning 65
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B. 7 months, beginning 3 months before the month the person turns 65
It includes the 3 months before, the birthday month, and the 3 months after.

14. The Medicare general enrollment period runs from:

  1. November 1 through January 15
  2. October 15 through December 7
  3. January 1 through March 31
  4. July 1 through September 30
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C. January 1 through March 31
People who miss their initial enrollment period may face late enrollment penalties.

15. For Medicare Part A to cover a skilled nursing facility stay, the patient generally must first have:

  1. Medigap coverage
  2. A doctor's referral to a specialist
  3. Medicaid eligibility
  4. A hospital inpatient stay of at least 3 days
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D. A hospital inpatient stay of at least 3 days
Part A covers up to 100 days of skilled nursing care per benefit period, with coinsurance after day 20.

16. A Medicare Part A benefit period ends when the patient:

  1. Reaches day 90 of a hospital stay
  2. Has been out of the hospital or skilled nursing facility for 60 consecutive days
  3. Is discharged from the hospital
  4. Turns 66
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B. Has been out of the hospital or skilled nursing facility for 60 consecutive days
A new benefit period requires a new Part A deductible.

17. How many lifetime reserve days does Medicare Part A provide?

  1. 30
  2. 150
  3. 90
  4. 60
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D. 60
Lifetime reserve days can be used after day 90 of a hospital stay and are not renewed.

18. Which of the following does Original Medicare NOT cover?

  1. Long-term custodial care
  2. Physician services
  3. Inpatient hospital care
  4. Hospice care
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A. Long-term custodial care
Custodial care is the main gap that long-term care insurance and Medicaid fill.

19. After the annual deductible, Medicare Part B generally pays what percentage of the approved amount?

  1. 50%
  2. 70%
  3. 80%
  4. 100%
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C. 80%
The remaining 20% coinsurance is a common gap that Medigap policies cover.

20. The core benefits found in every Medigap plan include:

  1. Routine dental and vision care
  2. Part A hospital coinsurance and 365 additional lifetime hospital days after Medicare benefits end
  3. Long-term custodial care
  4. Prescription drug coverage
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B. Part A hospital coinsurance and 365 additional lifetime hospital days after Medicare benefits end
Medigap Plan A contains the basic core benefits that all plans must include.

21. Which Medigap plans are not available to people who became eligible for Medicare on or after January 1, 2020?

  1. Plans K and L
  2. Plans G and N
  3. Plans C and F
  4. Plans A and B
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C. Plans C and F
Plans that cover the Part B deductible can no longer be sold to newly eligible beneficiaries.

22. A Medicare SELECT policy is:

  1. A Medigap policy that requires using network providers for full benefits
  2. A Medicare Advantage plan
  3. A Part D drug plan
  4. A state Medicaid plan
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A. A Medigap policy that requires using network providers for full benefits
Medicare SELECT usually costs less than a standard Medigap policy.

23. It is generally illegal to sell a Medigap policy to someone who:

  1. Is still working
  2. Is over age 75
  3. Has Medicare Part B
  4. Is enrolled in a Medicare Advantage plan and is not switching back to Original Medicare
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D. Is enrolled in a Medicare Advantage plan and is not switching back to Original Medicare
Medigap policies only work with Original Medicare.

24. A long-term care partnership policy:

  1. Replaces Medicare Part A
  2. Lets the insured protect assets from Medicaid spend-down rules, up to the benefits the policy paid
  3. Is sold only by the federal government
  4. Covers only nursing home care
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B. Lets the insured protect assets from Medicaid spend-down rules, up to the benefits the policy paid
Partnership programs encourage people to buy private long-term care coverage.

25. In long-term care insurance, respite care is:

  1. Care provided only in a nursing home
  2. Care provided in a hospital emergency room
  3. Temporary care that gives a family caregiver a break
  4. Hospice care at the end of life
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C. Temporary care that gives a family caregiver a break
Many LTC policies also cover home health care and adult day care.

26. When selling long-term care insurance, the insurer must offer the applicant:

  1. Accidental death coverage
  2. A return of premium rider
  3. A guaranteed premium
  4. Inflation protection
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D. Inflation protection
Applicants may reject inflation protection, usually in writing.

27. Benefits from a tax-qualified long-term care policy are generally:

  1. Received tax free, within federal limits
  2. Subject to a 10% penalty
  3. Taxed as ordinary income
  4. Taxed as capital gains
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A. Received tax free, within federal limits
Premiums may also be deductible as a medical expense, subject to age-based limits.

28. Long-term care policies may NOT exclude coverage for:

  1. Alcohol and drug addiction
  2. Alzheimer's disease and other organic cognitive disorders
  3. War
  4. Self-inflicted injuries
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B. Alzheimer's disease and other organic cognitive disorders
LTC policies cannot require a prior hospital stay or exclude Alzheimer's disease.

29. Which of the following is generally prohibited in a long-term care policy?

  1. Requiring a prior hospital stay before benefits are paid
  2. An elimination period
  3. A nonforfeiture option
  4. Inflation protection
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A. Requiring a prior hospital stay before benefits are paid
Prior hospitalization requirements were common in older policies but are no longer allowed.
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