State RegulationsTX specificDifficulty 1/5
Under the Texas Medicare supplement cancellation rule, on which of the following grounds may an insurer cancel a Medicare supplement policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 28 TAC 3.3306(E), the insurer's right to cancel or terminate a Medicare supplement policy is narrow, and nonpayment of premium is a permitted ground, as is fraud or material misrepresentation in the application. A deterioration in health, heavy use of benefits, or the insured growing older is not a permitted basis, because the protections in the Medicare supplement rules would mean nothing if the insurer could exit whenever the policy became unprofitable.
Why the other options are wrong
- A) Using the benefits the insured paid for is not a ground for termination.
- B) A post-issue change in health is exactly the risk the policy was sold to cover and is not a ground for cancellation.
- D) Age alone is not a ground for cancelling a Medicare supplement policy.
Memory hook
Medigap cancellation: do not pay, or do not tell the truth.