AD Banker Comprehensive Practice Exam

A Medicare SELECT policy differs from a regular Medicare Supplement (Medigap) policy in that it:

1. Is provided through Medicaid

2. Provides more coverages

3. Is a managed care version of the traditional Medicare Supplement policy

4. Costs more

The correct answer is: Is a managed care version of the traditional Medicare Supplement policy

A Medicare SELECT policy is indeed a type of Medicare Supplement insurance plan, but it has some specific characteristics that distinguish it from regular Medigap policies. The key difference lies in the way that the Medicare SELECT policy operates; it is essentially a managed care plan that requires enrollees to use a network of doctors and hospitals in order to receive the full benefits. If a policyholder chooses to go outside of this network, they may face reduced benefits or higher out-of-pocket costs. This structure can lead to lower premiums compared to traditional Medigap policies, which typically allow members to see any doctor who accepts Medicare without such restrictions. Therefore, insured individuals may find Medicare SELECT to be more affordable while still providing essential coverage, albeit with the trade-off of reduced flexibility regarding provider choice. The other options do not accurately describe how Medicare SELECT operates. For instance, it is not provided through Medicaid, it does not inherently offer more coverage than standard Medigap policies, and it generally costs less rather than more when compared to traditional plans. Understanding these distinctions is vital for making informed decisions about supplemental insurance options.