New Jersey Life and Health State Practice Exam

What type of benefits must a Medicare Supplement policy NOT contain?

1. Benefits that enhance Medicare coverage

2. Benefits that duplicate Medicare benefits

3. Benefits offered under Medicaid

4. Benefits that cover vision care

The correct answer is: Benefits that duplicate Medicare benefits

A Medicare Supplement policy, often referred to as Medigap, is designed to cover certain costs not covered by Medicare, such as copayments, coinsurance, and deductibles. Consequently, these policies are structured to complement Medicare coverage, rather than duplicate it. The importance of not including benefits that duplicate Medicare benefits stems from the regulatory framework governing these policies. Duplicate benefits would mean that the Medigap policy would provide coverage for items or services that are already fully covered by Medicare, resulting in unnecessary costs for consumers and complicating the healthcare payment system. Therefore, all Medigap policies are required to only offer benefits that fill the gaps left by Medicare. By prohibiting the inclusion of duplicated benefits, the law ensures that supplementary insurance works effectively alongside Medicare and that policyholders are not paying for redundant coverage. This clear delineation is beneficial to both consumers and insurers, as it encourages a streamlined approach to health coverage and minimizes the chances of policy confusion.