State RegulationsTX specificDifficulty 2/5
A Medicare supplement policy issued in Texas contains a provision permitting the issuer to refuse renewal because the insured's health has deteriorated. Under the Texas Medicare supplement rules, this provision is what?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
28 TAC 3.3306(b)(1)(E) states that each Medicare supplement policy must be guaranteed renewable and that an issuer may not cancel or nonrenew the policy solely because of the insured's health status, so an issuer may not refuse renewal or condition renewal on the insured's health status or claims experience. The practical consequence is that a policyholder whose health deteriorates keeps the policy on the same terms, subject only to proper premium payment; a nonrenewal attempted on health grounds is invalid and the coverage continues.
Why the other options are wrong
- B) Advance notice does not make an otherwise improper nonrenewal proper. Health-based refusal to renew is barred regardless of notice.
- C) The rating method does not change the renewal obligation. Attained-age rating affects premium, not the guaranteed renewable character of the policy.
- D) The protection is not limited to policyholders who bought during an initial enrollment period. Guaranteed renewability attaches to the policy once issued.
Memory hook
Med supp is guaranteed renewable: health cannot end the policy.