State RegulationsTX specificDifficulty 1/5
A Texas resident holds a Medicare Supplement policy issued by a Texas insurer that is placed into liquidation. What is the Association's maximum benefit for that coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 463.101-.205, health benefit coverage is tiered by type: $500,000 for basic hospital, medical-surgical and major medical coverage; $300,000 for disability income and long-term care; and $200,000 for other types of health insurance, which includes Medicare Supplement. The insured must be a Texas resident on the date of liquidation, and the Association's protections may not be used to sell or solicit insurance.
Why the other options are wrong
- A) The $500,000 tier reaches only basic hospital, medical-surgical and major medical coverage, not Medicare Supplement.
- C) $300,000 is the disability income and long-term care tier as well as the general per-life aggregate; Medicare Supplement sits in the lower tier.
- D) $100,000 is the life net cash surrender and withdrawal value cap and has nothing to do with health coverage.
Memory hook
Health tiers: $500,000 major medical, $300,000 disability and long-term care, $200,000 everything else.