NC Medicare Supplement & LTC Insurance | Licensing Exam Review | 2025/2026
NORTH CAROLINA MEDICARE SUPPLEMENT & LONG-
TERM CARE INSURANCE
LICENSING EXAM REVIEW | 2025/2026
50 Questions with Correct Answers & Rationales | State Insurance Licensing Competency
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Instructions
• This review contains 50 multiple-choice questions covering all major domains tested on the North Carolina
Medicare Supplement & Long-Term Care Insurance Licensing Examination for 2025/2026.
• Each question has four answer options (A–D). The correct answer is highlighted in bold cyan with a green
background.
• Detailed rationales reference NC Gen. Stat. Chapter 58, NCDOI Administrative Code, NAIC Model Regulations,
HIPAA provisions, CMS Medicare guidelines, and the Internal Revenue Code.
• Questions include scenario-based items reflecting realistic insurance sales situations and consumer
interactions common in NC Medicare/LTC practice.
• Test your knowledge of Medigap Plans A–N standardized benefits, LTC benefit triggers (ADLs and cognitive
impairment), and NC-specific regulatory requirements.
• Time yourself: aim for approximately 1.5–2 minutes per question to simulate exam conditions.
• Review the Question Distribution Table below to understand the weight of each content area on the licensing
exam.
Question Distribution
Section Questions Points Weight
SECTION I: Medicare Fundamentals Q1–Q12 12 24.0%
SECTION II: Medicare Supplement Q13–Q21 9 18.0%
SECTION III: Long-Term Care Insurance Fundamentals Q22–Q30 9 18.0%
SECTION IV: North Carolina–Specific Statutes & Rules Q31–Q35 5 10.0%
SECTION V: Ethical Sales Practices & Consumer Protection Q36–Q41 6 12.0%
SECTION VI: Tax Qualification & Regulatory Compliance Q42–Q44 3 6.0%
SECTION VII: Application & Underwriting Processes Q45–Q47 3 6.0%
SECTION VIII: Claims Administration & Policyholder Service Q48–Q50 3 6.0%
TOTAL Q1–Q50 50 100%
SECTION I: Medicare Fundamentals (Q1–Q12)
1. Which part of Original Medicare covers inpatient hospital stays, skilled nursing facility care, hospice care,
and some home health services?
A) Medicare Part B B) Medicare Part A
C) Medicare Part D D) Medicare Part C
Correct Answer: B) Medicare Part A
Rationale: Medicare Part A is the hospital insurance component of Original Medicare and covers inpatient hospital stays, care
in a skilled nursing facility, hospice care, and limited home health services. Part B covers outpatient and medical services. Part
1
, NC Medicare Supplement & LTC Insurance | Licensing Exam Review | 2025/2026
D covers prescription drugs. Part C refers to Medicare Advantage plans offered by private insurers. (CMS Medicare & You
Handbook)
2. A Medicare beneficiary asks an agent about the Initial Enrollment Period (IEP) for Medicare Part B.
Which of the following correctly describes the IEP?
A) A 3-month window before and after the month the beneficiary turns 65
B) A 7-month period: the 3 months before, the month of, and the 3 months after the beneficiary
turns 65
C) January 1 through March 31 of the year the beneficiary turns 65
D) Only during the Annual Open Enrollment Period in the fall
Correct Answer: B) A 7-month period: the 3 months before, the month of, and the 3 months after the
beneficiary turns 65
Rationale: The Initial Enrollment Period (IEP) is a 7-month window that includes the 3 months before the beneficiary's 65th
birthday month, the birthday month itself, and the 3 months after. Enrolling during the IEP avoids late enrollment penalties.
Option A describes a 6-month window, which is incorrect. Option C describes the General Enrollment Period. Option D
describes the fall Open Enrollment Period, which is for switching plans, not initial enrollment. (CMS Medicare & You
Handbook; 42 CFR 406.10)
3. Which of the following services is covered under Medicare Part B?
A) Inpatient hospital room and board for a 5-day stay
B) Outpatient doctor visits, preventive services, and durable medical equipment
C) Long-term custodial nursing home care
D) Routine dental cleanings and eye exams for glasses
Correct Answer: B) Outpatient doctor visits, preventive services, and durable medical equipment
Rationale: Medicare Part B covers outpatient medical services including doctor visits, preventive screenings, durable medical
equipment (DME), outpatient mental health services, and ambulance services. Inpatient hospital stays (option A) are covered
under Part A. Long-term custodial care (option C) is not covered by Medicare. Routine dental and vision services (option D)
are generally excluded. (CMS Medicare & You Handbook)
4. A Medicare beneficiary is considering a Medicare Advantage (Part C) plan. How does a Medicare
Advantage plan differ from Original Medicare?
A) Medicare Advantage plans always cost less than Original Medicare
B) Medicare Advantage plans are administered by private insurers approved by Medicare and often
include network restrictions
C) Medicare Advantage plans do not cover prescription drugs
D) Medicare Advantage plans eliminate all out-of-pocket costs for beneficiaries
Correct Answer: B) Medicare Advantage plans are administered by private insurers approved by
Medicare and often include network restrictions
Rationale: Medicare Advantage (Part C) plans are offered by private insurance companies approved by Medicare. They
bundle Part A, Part B, and often Part D coverage but typically require using in-network providers. They do not always cost less
(option A), may include Part D (contradicting option C), and have cost-sharing (option D is false). Network restrictions are a
key distinction from Original Medicare's fee-for-service model. (CMS Medicare & You Handbook; 42 CFR 422)
5. A Medicare beneficiary enrolled in a Medicare Part D Prescription Drug Plan asks about the coverage gap
(donut hole). What best describes the coverage gap phase?
A) A period when the plan pays nothing for any prescription drugs
B) The phase after initial coverage limits are reached, where beneficiaries pay a discounted
percentage for brand-name and generic drugs before catastrophic coverage begins
C) A penalty applied for late enrollment in Part D
D) The deductible phase before the plan begins paying
Correct Answer: B) The phase after initial coverage limits are reached, where beneficiaries pay a
discounted percentage for brand-name and generic drugs before catastrophic coverage begins
Rationale: The coverage gap (donut hole) begins after the beneficiary and plan have spent a certain amount on covered
drugs. In this phase, beneficiaries pay a percentage of the cost for both brand-name and generic drugs. The Affordable Care
Act progressively closed the gap; by 2020, brand-name drugs are discounted 75% and generics 75% in the gap. Option A is
2
, NC Medicare Supplement & LTC Insurance | Licensing Exam Review | 2025/2026
incorrect because coverage continues at reduced levels. Option C describes the late enrollment penalty. Option D describes the
deductible phase. (CMS Part D Benefits; Medicare Part D Manual Chapter 6)
6. Which Medigap plan covers the Medicare Part B excess charges, allowing doctors who do not accept
Medicare assignment to bill the beneficiary for the difference above the Medicare-approved amount?
A) Plan A only B) Plans F and G only
C) All Medigap plans A through N D) No Medigap plan covers Part B excess charges
Correct Answer: B) Plans F and G only
Rationale: Among standardized Medigap plans, only Plan F (for beneficiaries who were eligible for Medicare before January
1, 2020) and Plan G cover Medicare Part B excess charges. Plans A, B, C, D, K, L, M, and N do not include excess charge
coverage. Beneficiaries enrolling in Medicare on or after January 1, 2020, cannot purchase Plan F or C due to the Medicare
Access and CHIP Reauthorization Act (MACRA). (CMS Medigap Guide; NAIC Model Regulation for Medigap)
7. A Medicare beneficiary missed their Initial Enrollment Period and did not have employer group
coverage. What is the consequence for late enrollment in Part B?
A) No penalty; they can enroll at any time with the same premium
B) A 10% premium penalty for each 12-month period they were eligible but did not enroll
C) A 1% premium penalty per month of delayed enrollment
D) They are permanently barred from Part B enrollment
Correct Answer: B) A 10% premium penalty for each 12-month period they were eligible but did not
enroll
Rationale: Beneficiaries who do not enroll in Part B during their IEP and do not have qualifying employer coverage must
enroll during the General Enrollment Period (January 1–March 31, with coverage starting July 1). The late enrollment penalty
is 10% of the standard Part B premium for each full 12-month period they were eligible but did not enroll, and the penalty
continues for as long as they have Part B. (CMS Medicare & You Handbook; Social Security Act §1838)
8. A 67-year-old Medicare beneficiary wants to switch from Original Medicare to a Medicare Advantage
plan during the fall. Which enrollment period allows this change?
A) The Initial Enrollment Period
B) The Medicare Advantage Open Enrollment Period (January 1 – March 31)
C) The Annual Enrollment Period (October 15 – December 7)
D) The Special Enrollment Period
Correct Answer: C) The Annual Enrollment Period (October 15 – December 7)
Rationale: The Annual Enrollment Period (AEP), also called the fall Open Enrollment Period, runs from October 15 to
December 7 each year. During this time, Medicare beneficiaries can switch between Original Medicare and Medicare
Advantage, change Medicare Advantage plans, or join or switch Part D plans. The Medicare Advantage Open Enrollment
Period (option B, Jan 1–Mar 31) allows current MA enrollees to switch to a different MA plan or return to Original Medicare.
(CMS Medicare & You Handbook)
9. Under which circumstance does a Medicare beneficiary have guaranteed issue rights to purchase a
Medigap policy without medical underwriting?
A) The beneficiary decides they want a different plan for better coverage
B) The beneficiary is losing employer group health coverage or their Medicare Advantage plan is
terminating
C) The beneficiary is moving to a different state
D) The beneficiary has had their Medigap policy for less than 6 months
Correct Answer: B) The beneficiary is losing employer group health coverage or their Medicare
Advantage plan is terminating
Rationale: Guaranteed issue rights allow beneficiaries to buy Medigap policies without medical underwriting in specific
situations, including when employer group health coverage ends, when a Medicare Advantage plan is leaving the area or the
beneficiary is moving out of the plan's service area, or when the beneficiary is within their Medigap Open Enrollment Period.
Simply wanting a different plan (option A), moving to another state (option C without plan termination), or having a policy
less than 6 months (option D) do not trigger guaranteed issue rights. (CMS Medigap Guide; NAIC Model Regulation)
10. What is the Medicare Part A hospital benefit deductible for 2026 for each benefit period?
A) There is no deductible for Part A
B) The deductible is approximately $1,632 per benefit period (subject to annual CMS adjustment)
3
NORTH CAROLINA MEDICARE SUPPLEMENT & LONG-
TERM CARE INSURANCE
LICENSING EXAM REVIEW | 2025/2026
50 Questions with Correct Answers & Rationales | State Insurance Licensing Competency
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
━━━━━━━━━━━━
Instructions
• This review contains 50 multiple-choice questions covering all major domains tested on the North Carolina
Medicare Supplement & Long-Term Care Insurance Licensing Examination for 2025/2026.
• Each question has four answer options (A–D). The correct answer is highlighted in bold cyan with a green
background.
• Detailed rationales reference NC Gen. Stat. Chapter 58, NCDOI Administrative Code, NAIC Model Regulations,
HIPAA provisions, CMS Medicare guidelines, and the Internal Revenue Code.
• Questions include scenario-based items reflecting realistic insurance sales situations and consumer
interactions common in NC Medicare/LTC practice.
• Test your knowledge of Medigap Plans A–N standardized benefits, LTC benefit triggers (ADLs and cognitive
impairment), and NC-specific regulatory requirements.
• Time yourself: aim for approximately 1.5–2 minutes per question to simulate exam conditions.
• Review the Question Distribution Table below to understand the weight of each content area on the licensing
exam.
Question Distribution
Section Questions Points Weight
SECTION I: Medicare Fundamentals Q1–Q12 12 24.0%
SECTION II: Medicare Supplement Q13–Q21 9 18.0%
SECTION III: Long-Term Care Insurance Fundamentals Q22–Q30 9 18.0%
SECTION IV: North Carolina–Specific Statutes & Rules Q31–Q35 5 10.0%
SECTION V: Ethical Sales Practices & Consumer Protection Q36–Q41 6 12.0%
SECTION VI: Tax Qualification & Regulatory Compliance Q42–Q44 3 6.0%
SECTION VII: Application & Underwriting Processes Q45–Q47 3 6.0%
SECTION VIII: Claims Administration & Policyholder Service Q48–Q50 3 6.0%
TOTAL Q1–Q50 50 100%
SECTION I: Medicare Fundamentals (Q1–Q12)
1. Which part of Original Medicare covers inpatient hospital stays, skilled nursing facility care, hospice care,
and some home health services?
A) Medicare Part B B) Medicare Part A
C) Medicare Part D D) Medicare Part C
Correct Answer: B) Medicare Part A
Rationale: Medicare Part A is the hospital insurance component of Original Medicare and covers inpatient hospital stays, care
in a skilled nursing facility, hospice care, and limited home health services. Part B covers outpatient and medical services. Part
1
, NC Medicare Supplement & LTC Insurance | Licensing Exam Review | 2025/2026
D covers prescription drugs. Part C refers to Medicare Advantage plans offered by private insurers. (CMS Medicare & You
Handbook)
2. A Medicare beneficiary asks an agent about the Initial Enrollment Period (IEP) for Medicare Part B.
Which of the following correctly describes the IEP?
A) A 3-month window before and after the month the beneficiary turns 65
B) A 7-month period: the 3 months before, the month of, and the 3 months after the beneficiary
turns 65
C) January 1 through March 31 of the year the beneficiary turns 65
D) Only during the Annual Open Enrollment Period in the fall
Correct Answer: B) A 7-month period: the 3 months before, the month of, and the 3 months after the
beneficiary turns 65
Rationale: The Initial Enrollment Period (IEP) is a 7-month window that includes the 3 months before the beneficiary's 65th
birthday month, the birthday month itself, and the 3 months after. Enrolling during the IEP avoids late enrollment penalties.
Option A describes a 6-month window, which is incorrect. Option C describes the General Enrollment Period. Option D
describes the fall Open Enrollment Period, which is for switching plans, not initial enrollment. (CMS Medicare & You
Handbook; 42 CFR 406.10)
3. Which of the following services is covered under Medicare Part B?
A) Inpatient hospital room and board for a 5-day stay
B) Outpatient doctor visits, preventive services, and durable medical equipment
C) Long-term custodial nursing home care
D) Routine dental cleanings and eye exams for glasses
Correct Answer: B) Outpatient doctor visits, preventive services, and durable medical equipment
Rationale: Medicare Part B covers outpatient medical services including doctor visits, preventive screenings, durable medical
equipment (DME), outpatient mental health services, and ambulance services. Inpatient hospital stays (option A) are covered
under Part A. Long-term custodial care (option C) is not covered by Medicare. Routine dental and vision services (option D)
are generally excluded. (CMS Medicare & You Handbook)
4. A Medicare beneficiary is considering a Medicare Advantage (Part C) plan. How does a Medicare
Advantage plan differ from Original Medicare?
A) Medicare Advantage plans always cost less than Original Medicare
B) Medicare Advantage plans are administered by private insurers approved by Medicare and often
include network restrictions
C) Medicare Advantage plans do not cover prescription drugs
D) Medicare Advantage plans eliminate all out-of-pocket costs for beneficiaries
Correct Answer: B) Medicare Advantage plans are administered by private insurers approved by
Medicare and often include network restrictions
Rationale: Medicare Advantage (Part C) plans are offered by private insurance companies approved by Medicare. They
bundle Part A, Part B, and often Part D coverage but typically require using in-network providers. They do not always cost less
(option A), may include Part D (contradicting option C), and have cost-sharing (option D is false). Network restrictions are a
key distinction from Original Medicare's fee-for-service model. (CMS Medicare & You Handbook; 42 CFR 422)
5. A Medicare beneficiary enrolled in a Medicare Part D Prescription Drug Plan asks about the coverage gap
(donut hole). What best describes the coverage gap phase?
A) A period when the plan pays nothing for any prescription drugs
B) The phase after initial coverage limits are reached, where beneficiaries pay a discounted
percentage for brand-name and generic drugs before catastrophic coverage begins
C) A penalty applied for late enrollment in Part D
D) The deductible phase before the plan begins paying
Correct Answer: B) The phase after initial coverage limits are reached, where beneficiaries pay a
discounted percentage for brand-name and generic drugs before catastrophic coverage begins
Rationale: The coverage gap (donut hole) begins after the beneficiary and plan have spent a certain amount on covered
drugs. In this phase, beneficiaries pay a percentage of the cost for both brand-name and generic drugs. The Affordable Care
Act progressively closed the gap; by 2020, brand-name drugs are discounted 75% and generics 75% in the gap. Option A is
2
, NC Medicare Supplement & LTC Insurance | Licensing Exam Review | 2025/2026
incorrect because coverage continues at reduced levels. Option C describes the late enrollment penalty. Option D describes the
deductible phase. (CMS Part D Benefits; Medicare Part D Manual Chapter 6)
6. Which Medigap plan covers the Medicare Part B excess charges, allowing doctors who do not accept
Medicare assignment to bill the beneficiary for the difference above the Medicare-approved amount?
A) Plan A only B) Plans F and G only
C) All Medigap plans A through N D) No Medigap plan covers Part B excess charges
Correct Answer: B) Plans F and G only
Rationale: Among standardized Medigap plans, only Plan F (for beneficiaries who were eligible for Medicare before January
1, 2020) and Plan G cover Medicare Part B excess charges. Plans A, B, C, D, K, L, M, and N do not include excess charge
coverage. Beneficiaries enrolling in Medicare on or after January 1, 2020, cannot purchase Plan F or C due to the Medicare
Access and CHIP Reauthorization Act (MACRA). (CMS Medigap Guide; NAIC Model Regulation for Medigap)
7. A Medicare beneficiary missed their Initial Enrollment Period and did not have employer group
coverage. What is the consequence for late enrollment in Part B?
A) No penalty; they can enroll at any time with the same premium
B) A 10% premium penalty for each 12-month period they were eligible but did not enroll
C) A 1% premium penalty per month of delayed enrollment
D) They are permanently barred from Part B enrollment
Correct Answer: B) A 10% premium penalty for each 12-month period they were eligible but did not
enroll
Rationale: Beneficiaries who do not enroll in Part B during their IEP and do not have qualifying employer coverage must
enroll during the General Enrollment Period (January 1–March 31, with coverage starting July 1). The late enrollment penalty
is 10% of the standard Part B premium for each full 12-month period they were eligible but did not enroll, and the penalty
continues for as long as they have Part B. (CMS Medicare & You Handbook; Social Security Act §1838)
8. A 67-year-old Medicare beneficiary wants to switch from Original Medicare to a Medicare Advantage
plan during the fall. Which enrollment period allows this change?
A) The Initial Enrollment Period
B) The Medicare Advantage Open Enrollment Period (January 1 – March 31)
C) The Annual Enrollment Period (October 15 – December 7)
D) The Special Enrollment Period
Correct Answer: C) The Annual Enrollment Period (October 15 – December 7)
Rationale: The Annual Enrollment Period (AEP), also called the fall Open Enrollment Period, runs from October 15 to
December 7 each year. During this time, Medicare beneficiaries can switch between Original Medicare and Medicare
Advantage, change Medicare Advantage plans, or join or switch Part D plans. The Medicare Advantage Open Enrollment
Period (option B, Jan 1–Mar 31) allows current MA enrollees to switch to a different MA plan or return to Original Medicare.
(CMS Medicare & You Handbook)
9. Under which circumstance does a Medicare beneficiary have guaranteed issue rights to purchase a
Medigap policy without medical underwriting?
A) The beneficiary decides they want a different plan for better coverage
B) The beneficiary is losing employer group health coverage or their Medicare Advantage plan is
terminating
C) The beneficiary is moving to a different state
D) The beneficiary has had their Medigap policy for less than 6 months
Correct Answer: B) The beneficiary is losing employer group health coverage or their Medicare
Advantage plan is terminating
Rationale: Guaranteed issue rights allow beneficiaries to buy Medigap policies without medical underwriting in specific
situations, including when employer group health coverage ends, when a Medicare Advantage plan is leaving the area or the
beneficiary is moving out of the plan's service area, or when the beneficiary is within their Medigap Open Enrollment Period.
Simply wanting a different plan (option A), moving to another state (option C without plan termination), or having a policy
less than 6 months (option D) do not trigger guaranteed issue rights. (CMS Medigap Guide; NAIC Model Regulation)
10. What is the Medicare Part A hospital benefit deductible for 2026 for each benefit period?
A) There is no deductible for Part A
B) The deductible is approximately $1,632 per benefit period (subject to annual CMS adjustment)
3
