State RegulationsMI specificDifficulty 2/5
A policyholder in Grand Rapids enters a nursing home and becomes entitled to Medicaid. At the policyholder's request, what must her Medicare supplement insurer do under Michigan law?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3819(3) requires a Michigan Medicare supplement insurer, on the request of a policyholder entitled to Medicaid, to suspend payment of benefits and collection of premiums for up to 24 months. When Medicaid eligibility is lost, the insurer must give the policyholder 90-day notice before coverage resumes and premiums are collected again. This lets a Medicaid beneficiary keep her Medicare supplement in force without paying premiums while Medicaid is the payer of last resort.
Why the other options are wrong
- B) Cancellation is unlawful: the policy is guaranteed renewable and termination is limited to nonpayment or material misrepresentation under M.C.L. 500.3819(2)(d); suspension, not termination, is the required remedy.
- C) Premiums are suspended, not increased, during the Medicaid entitlement period under M.C.L. 500.3819(3).
- D) No new evidence of insurability may be demanded; the statute restores coverage on notice after Medicaid eligibility ends.
Memory hook
Medicaid is a pause button: benefits and premiums frozen up to 24 months, with a 90-day heads-up when the clock restarts.