Maryland Life and Health Insurance License Practice Exam

Who provides Medicare supplement policies?

1. State government programs

2. Private insurance companies

3. Non-profit organizations

4. Federal insurance agencies

The correct answer is: Private insurance companies

Medicare supplement policies, commonly known as Medigap, are offered exclusively by private insurance companies. These policies are designed to fill the "gaps" in Original Medicare coverage, such as copayments, deductibles, and coinsurance. Private insurers operate under specific federal and state regulations to ensure that these products provide the necessary coverage options for Medicare beneficiaries. The role of private companies in providing Medigap policies is significant, as they create different plans with varying levels of coverage, allowing consumers to choose based on their healthcare needs and budget. This competitive marketplace helps ensure that beneficiaries have multiple options. Other entities, like state government programs, non-profit organizations, or federal insurance agencies, do not provide these policies. Instead, they may offer other types of health coverage or assistance relevant to healthcare, but the provision of Medigap specifically falls to private insurers. This focus on private sectors enhances the flexibility and variety available to consumers in the Medicare supplement plan market, thereby improving access to care for those enrolled in Medicare.