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11.9 Medicare Supplement Replacement Requirements

When replacing a Medicare Supplement (Medigap) policy, an agent must:

  • Ensure that the replacement does not reduce benefits while increasing premiums
  • Use an application that includes questions designed to determine whether the applicant currently has, or previously had, a Medigap policy and whether the transaction involves a replacement
  • Provide a Notice of Replacement to the applicant prior to issuing or delivering the new policy
    • One signed copy (by both the applicant and the agent) must be given to the applicant
    • A second signed copy must be retained by the insurer

When recommending the purchase or replacement of a Medigap policy, the agent must make reasonable efforts to determine the suitability of the recommendation for the applicant.

If a Medigap policy replaces another Medigap policy that has been in force for 6 months or more, the new insurer cannot impose pre-existing condition exclusions or limitations. If the prior policy has been in force for less than 6 months, the new insurer must credit any time already satisfied toward pre-existing condition waiting periods under the previous policy.