While taking an application for a Medicare supplement policy, a New York agent learns that the applicant intends to cancel an existing Medicare Advantage plan in favor of the new policy. Under New York's Medicare supplement replacement rules, the agent must:

Why A is correct

Under New York's Medicare supplement replacement rules, once an issuer or its agent determines that a sale will replace existing accident and health coverage, including Medicare Advantage coverage or an employer-provided health benefit arrangement, the applicant must be furnished a notice regarding replacement of coverage prior to issuance or delivery of the new policy. The notice must be signed by the applicant and the agent, with a signed copy provided to the applicant and another retained by the issuer. These steps ensure the applicant makes an informed comparison before dropping existing coverage.

Why the other options are wrong

• B) The notice cannot wait for an insurer request; it must be furnished before the new policy is issued or delivered.
• C) Advising immediate cancellation is the opposite of the required warning; the applicant must be told not to terminate existing coverage until the new policy is received and accepted.
• D) Replacing Medicare Advantage coverage with a Medicare supplement policy is not prohibited; it is regulated through the required replacement notice.

Memory hook

Medigap replacement = signed notice before the new policy is issued.