Maryland Life and Health Insurance License Practice Exam

What does a Medicare supplement policy primarily cover?

1. Long-term care services

2. Medicare deductibles and copayments

3. Limited benefit short-term insurance

4. Home health care services

The correct answer is: Medicare deductibles and copayments

A Medicare supplement policy, often referred to as Medigap, is designed to cover the out-of-pocket costs that Original Medicare doesn't fully pay. This includes the deductibles, copayments, and coinsurance that beneficiaries are responsible for. For example, while Medicare Part A and Part B provide essential medical coverage, they still leave gaps that can lead to significant expenses for beneficiaries. The primary purpose of a Medigap policy is to bridge these gaps to ensure that individuals can receive necessary medical care without incurring overwhelming financial burden due to the additional costs. In contrast, long-term care services are generally not covered by Medicare or Medigap policies, which focus on short-term medical expenses. Likewise, limited benefit short-term insurance and home health care services are outside the scope of standard Medigap coverage. Instead, these types of services may require separate insurance products or programs. Thus, the primary focus of a Medicare supplement policy remains the coverage of Medicare deductibles and copayments, ensuring beneficiaries have better protection against high healthcare costs.