AD Banker Comprehensive Practice Exam

What is one of the primary purposes of a Medicare Supplement Policy?

1. To offer coverage for preventive services

2. To cover deductibles and coinsurance not paid by Medicare

3. To provide income replacement during disability

4. To offer long-term care coverage

The correct answer is: To cover deductibles and coinsurance not paid by Medicare

One of the primary purposes of a Medicare Supplement Policy, often referred to as Medigap insurance, is to cover the out-of-pocket costs that Medicare does not pay, such as deductibles and coinsurance. Medicare typically covers many health services, but beneficiaries are still responsible for certain costs associated with those services, including copayments or the deductible for inpatient hospital stays. The purpose of a Medicare Supplement Policy is specifically to help fill those gaps in coverage created by Medicare's structure, thereby reducing the financial burden on beneficiaries. This allows for more predictable healthcare costs and helps ensure that individuals can afford necessary medical services without worrying excessively about potentially high out-of-pocket expenses. The other options involve areas such as preventive services, income replacement during disability, and long-term care coverage, which are not the focus of a Medicare Supplement Policy. Instead, those areas are typically covered by different types of policies or programs designed specifically for those needs.