NAIC Urges States to Stop Misleading Sales Practices of Certain Medigap Policies

The National Association of Insurance Commissioners (NAIC) will soon issue a bulletin to advisors and state insurance departments urging state regulators to discipline advisors who make misleading statements to consumers regarding the sale of certain Medigap policies.  Specifically, the NAIC is concerned that some agents are falsely stating to Medigap C and F policyholders that somewhat recent changes in federal law will cause their plan premiums to increase significantly and that the policyholder may want to purchase other coverage.  State insurance departments consider any such statement to be false and misleading. 

Under the Medicare Access and CHIP Reauthorization Act (MACRA), signed into law on April 16, 2015, sales of Medigap plans to cover Medicare Part B deductibles are prohibited to newly eligible Medicare beneficiary after January 1, 2020.  Importantly, those policyholders who currently have a Medigap policy to cover Part B deductibles may maintain the policy after that date. MACRA would not affect these policyholders.  Any statement to the contrary is incorrect.   
The draft NAIC bulletin states:
"Some agents are telling their policyholders that premiums for coverage under Plans C or F will be increasing to such an extent that they should purchase other coverage. These are misleading statements to induce policyholders to improperly switch coverage using marketing and sales techniques that are in clear violation of the Medicare supplement insurance laws and a states’ unfair trade practices laws. If a state finds such activity, the state can take appropriate administrative action.”
NAIFA staff encourages members to share this information with your colleagues to ensure that advisors are aware of current law regarding Medigap policies. 
  • Posted March 5, 2019 IN

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