Plain version: California controls how Medigap is sold. Some sales methods are banned outright, a senior never needs two Medigap policies, and the outline of coverage, the application and the replacement notice each carry required statements.
Prohibited practices (§10192.20(b)):
Twisting: a misleading comparison meant to get someone to drop or change a policy.
High pressure tactics: using force, fright, threat or undue pressure to get someone to buy.
Cold lead advertising: a marketing method that fails to disclose conspicuously that a purpose is to solicit insurance and that an insurance agent or company will make contact.
One Medigap policy is enough:
The CDI outline says a person cannot receive benefits from more than one Medicare supplement plan. Federal law makes it unlawful to sell a Medigap policy knowing the person is entitled to benefits under another one.
To catch this, the California application must ask whether the applicant has another Medicare supplement policy in force and whether it will be replaced, and it states, "You do not need more than one Medicare supplement policy."
Medicare Advantage is not a Medicare supplement plan and does not coordinate with one.
Outline of coverage and application:
The outline's required disclosures say the policy may not fully cover all medical costs, that "Neither this company nor any of its agents are connected with Medicare," that the outline does not give all the details of Medicare coverage, and that HICAP is available for more information.
The application tells the applicant that counseling is available and points to the Department of Insurance's toll-free number to reach a local HICAP office. HICAP is provided free of charge by the State of California.
Replacement notice and rate guide:
The replacement notice warns not to cancel the present policy until the new policy has been received and the applicant is sure about keeping it. It explains the 30-day right to return the policy for a refund and says the replacement may not contain new preexisting condition or waiting periods. It is given before the policy is issued for delivery, with a copy signed by the applicant and the agent.
The Commissioner's annual rate guide compares insurers. The application names three places to get it: the Department of Insurance's toll-free number, HICAP's toll-free number and the Department's website. The guide shows each company's plans, sample rates, premium rate methodology and any preexisting condition waiting period.