Arizona Health Insurance Practice Exam

What must an insurer provide if a group Medicare supplement policy is terminated without replacement?

1. An apology

2. Conversion to individual coverage

3. A summary of benefits

4. A refund of premiums

The correct answer is: Conversion to individual coverage

When a group Medicare supplement policy is terminated without replacement, the insurer is required to provide conversion to individual coverage. This is important because it ensures that individuals who were covered under the group policy do not lose their access to necessary medical care due to the policy's termination. Conversion rights allow individuals to transition to an individual Medicare supplement policy without the need for re-applying or undergoing new medical underwriting, which could otherwise lead to denial of coverage based on pre-existing conditions. This mechanism is designed to protect consumers, particularly older adults or those with health issues, ensuring continuity of coverage. The other options do not align with the legal requirements tied to the termination of such policies. Offering an apology, providing a summary of benefits, or issuing a refund of premiums does not fulfill the obligation to ensure that individuals have continued access to coverage options after a group policy is terminated. Thus, conversion to individual coverage is the correct and necessary requirement in this scenario.