The national Senior and Special Needs guide covers Medicare Parts A to D, Medicaid and how long-term care insurance works. It also covers the federal lettered Medigap plans, which Wisconsin doesn't use. Wisconsin is one of three states, with Massachusetts and Minnesota, that standardizes Medigap its own way: a required Basic Medicare Supplement Coverage plan plus optional riders (Ins 3.39(5t)). This guide covers that design, Wisconsin's Medigap sales rules, and its long-term care standards (Ins 3.46, 3.465).

Wisconsin's Medigap design (Ins 3.39(5t))

Basic Medicare Supplement Coverage must include:

• at least 175 days of lifetime inpatient psychiatric care after Medicare's psychiatric coverage runs out
• skilled nursing facility coinsurance for days 21 through 100
• an extra 365 days of hospital coverage, subject to a lifetime maximum
• Wisconsin mandates such as chiropractic, home care, kidney disease and diabetes coverage

Outpatient prescription drugs aren't included, other than diabetes supplies. Drug coverage comes from Part D.

Optional riders are sold separately. They include the Part A deductible, Part B excess charges and foreign travel.

• A policy can't carry both the Part A deductible rider and the 50% Part A deductible rider for the same period.
• The Part B deductible rider can't be sold to anyone newly eligible for Medicare on or after January 1, 2020.
• Under the Part B copayment rider, the insured pays the lesser of $20 per office visit ($50 per ER visit) or the Part B coinsurance.

Other standardized options:

• cost-sharing plans (25% and 50%), which pay 75% or 50% of the Part A deductible
• a high-deductible plan, with a deductible of $2,000 adjusted yearly for inflation

Medigap issue rights and policy rules (Ins 3.39)

• Open enrollment: for 6 months starting with the first month of Part B enrollment, an insurer can't deny coverage or rate it based on health (3.39(3r)(a)).
• An open-enrollment applicant with at least 6 months of creditable coverage gets no preexisting-condition exclusion. Otherwise a preexisting-condition wait can't exceed 6 months (3.39(4t)(a)2). By statute, claims can't be denied as preexisting after 6 months from issue (Wis. Stat. 632.76(2)(b)).
• A policy may be cancelled only for nonpayment or material misrepresentation, never because health declines.
• A policyholder who becomes entitled to Medicaid may suspend the policy for up to 24 months by notifying the insurer within 90 days.
• When a policy replaces one in force at least 6 months, satisfied waiting periods are waived (3.39(27)).
• Free look: 30 days (Wis. Stat. 632.73(2m)). Refunds are mailed directly to the person who paid.

Medigap sales rules

• The Guide to Health Insurance for People with Medicare is given when the prospect is first invited to apply. The outline of coverage is given at application, with signed acknowledgments except for direct-response sales.
• No sale may leave a person with more than one Medigap policy.
• Applications and premiums are forwarded to the insurer within 7 days.
• An application can't be taken more than 3 months before the person becomes eligible.
• Commissions: first-year pay is at most 200% of second-year pay. Renewal pay is level for at least 5 renewal years. A replacement earns only renewal-level compensation (3.39(21)).
• Prohibited practices:
  • high pressure through force, fright, threat or undue pressure
  • cold lead advertising that doesn't make clear an agent will call
  • suggesting state approval is a recommendation

Long-term care (Ins 3.46, 3.465)

Benefit standards:

• Benefits are triggered by inability to perform activities of daily living (bathing, continence, dressing, eating, toileting and transferring) or by cognitive impairment.
• A policy can't require a prior hospital stay or prior institutional care.
• It must cover irreversible dementia, such as Alzheimer's disease.
• The elimination period can't exceed 365 days. An insurer offering more than 180 days must also offer a form with 180 days or less.

Inflation protection:

• The insurer offers 5% compound protection, or CPI-based increases, or 80% of actual charges.
• The applicant must accept or reject it in writing before the application is accepted.
• Partnership policies (3.465):
  • must be tax-qualified
  • need compound inflation protection for buyers under 61
  • need at least 3% simple for buyers aged 61 to 75
  • need none at 76 and older

Lapse protection:

• The applicant names someone to receive lapse notices, or signs a waiver.
• A lapse notice can't be sent until 30 days after the premium is due, and gives at least 30 days before termination.

Sales:

• The current guide to long-term care and the outline of coverage are given when soliciting (Ins 3.46(9)).
• The policy carries a "Notice to Buyer" that it may not cover all long-term care costs.
• Free look: 30 days.
• Contestability: after 2 years, the insurer must prove a knowing, intentional and fraudulent misrepresentation.
• Commissions: level in years 2 and later, for at least 5 renewal years.
• Producer training: 8 hours initially, with 2 on Wisconsin Medicaid and LTC, then 4 hours every 24 months (Ins 3.46(26); Wis. Stat. 628.348).

Common exam traps

• Wisconsin doesn't use Plans A to N. It uses a Basic plan plus riders.
• Basic includes 175 days of psychiatric care and an extra 365 hospital days, but no outpatient drugs.
• Medigap open enrollment is 6 months from Part B enrollment. A preexisting wait is at most 6 months.
• The Medigap and LTC free look is 30 days.
• Medigap first-year commission is capped at 200% of the second year's.
• An LTC elimination period can't exceed 365 days. Dementia must be covered.
• LTC producer training is 8 hours, then 4 hours every two years.