(A) Purpose
The purpose of this rule is to provide for the
reasonable standardization of coverage and simplification of terms and benefits
of medicare supplement policies; to facilitate public understanding and
comparison of such policies; to eliminate provisions contained in such policies
which may be misleading or confusing in connection with the purchase of such
policies or with the settlement of claims; and to provide for full disclosures
in the sale of sickness and accident insurance coverage to persons eligible for
medicare.
(B) Authority
This rule is promulgated pursuant to the
authority vested in the superintendent under sections 3901.041, 3923.33 and
3923.331 to 3923.339 of the Revised Code.
(C) Applicability and scope
(1) Except as otherwise
specifically provided in paragraphs (G), (P), (Q), (T), and (Y) of this rule,
this rule applies to:
(a) All medicare supplement policies, delivered or issued for
delivery in this state on or after the effective date of this rule;
and
(b) All certificates issued under group medicare supplement
policies which certificates have been delivered or issued for delivery in this
state on or after the effective date of this rule.
(2) This rule does not
apply to a policy or contract of one or more employers or labor organizations,
or of the trustees of a fund established by one or more employers or labor
organizations, or combination thereof, for employees or former employees, or a
combination thereof, or for members or former members, or a combination
thereof, of the labor organizations.
(D) Definitions
For purposes of this rule, the following terms
are defined as follows:
(1) "Applicant"
means, in the case of an individual medicare supplement policy, the person who
seeks to contract for insurance benefits, and in the case of a group medicare
supplement policy, the proposed certificate holder.
(2) "Bankruptcy" means when a "Medicare
Advantage" organization that is not an issuer has filed, or has had filed
against it, a petition for declaration of bankruptcy and has ceased doing
business in the state.
(3) "Certificate" means any certificate delivered or
issued for delivery in this state under a group medicare supplement
policy.
(4) "Certificate
form" means the form on which the certificate is delivered or issued for
delivery by the issuer.
(5) "Continuous
period of creditable coverage" means the period during which an individual
was covered by creditable coverage, if during the period of the coverage the
individual had no breaks in coverage greater than sixty-three
days.
(6)
(a) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(i) A group health
plan;
(ii) Health insurance
coverage;
(iii) "Part A"
or "Part B" of "Title XVIII of the Social Security Act"
(medicare);
(iv) "Title XIX of
the Social Security Act" (medicaid), other than coverage consisting solely
of benefits under section 1928;
(v) "Chapter 55 of
Title 10 United States Code (CHAMPUS)";
(vi) A medical care
program of the Indian health service or of a tribal organization;
(vii) A state health
benefits risk pool;
(viii) A health plan
offered under chapter 89 of "Title 5 United States Code" (federal
employees health benefits program);
(ix) A public health plan
as defined in federal regulation; and
(x) A health benefit plan
under section 5(e) of the "Peace Corps Act (22 United States Code"
2504(e)).
(b) "Creditable coverage" does not include one or more,
or any combination of, the following:
(i) Coverage only for
accident or disability income insurance, or any combination
thereof;
(ii) Coverage issued as a
supplement to liability insurance;
(iii) Liability
insurance, including general liability insurance and automobile liability
insurance;
(iv) Workers'
compensation or similar insurance;
(v) Automobile medical
payment insurance;
(vi) Credit-only
insurance;
(vii) Coverage for
on-site medical clinics; and
(viii) Other similar
insurance coverage, specified in federal regulations, under which benefits for
medical care are secondary or incidental to other insurance
benefits.
(c) "Creditable coverage" shall not include the
following benefits if they are provided under a separate policy, certificate or
contract of insurance or are otherwise not an integral part of the
plan;
(i) Limited scope dental
or vision benefits;
(ii) Benefits for
long-term care, nursing home care, home health care, community-based care, or
any combination thereof; and
(iii) Such other similar,
limited benefits as are specified in federal regulations.
(d) "Creditable coverage" shall not include the
following benefits if offered as independent, noncoordinated
benefits:
(i) Coverage only for a
specified disease or illness; and
(ii) Hospital indemnity
or other fixed indemnity insurance.
(e) "Creditable coverage" shall not include the
following if it is offered as a separate policy, certificate or contract of
insurance:
(i) Medicare supplemental
health insurance as defined under section 1882(g)(1) of the "Social
Security Act";
(ii) Coverage
supplemental to the coverage provided under chapter 55 of "Title 10,
United States Code"; and
(iii) Similar
supplemental coverage provided to coverage under a group health
plan.
(7) "Employee
welfare benefit plan" means a plan, fund or program of employee benefits
as defined in 29 U.S.C. section 1002 ("Employee Retirement Income Security
Act").
(8) "Insolvency" or "Insolvent"
means:
(a) For any issuer, that it is unable to pay its obligations when
they are due, or when its admitted assets do not exceed its liabilities plus
the greater of either of the following:
(i) Any capital and
surplus required by law for its organization;
(ii) The total par or
stated value of its authorized and issued capital stock.
(b) As to any issuer licensed to do business in this state as of
the effective date of sections 3903.01 to 3903.59 of the Revised Code that does
not meet the standard established under paragraph (D)(8)(a) of this rule, the
term "insolvency" or "insolvent" means, for a period not to
exceed three years from the effective date of sections 3903.01 to 3903.59 of
the Revised Code, that it is unable to pay its obligations when they are due or
that its admitted assets do not exceed its liabilities plus any required
capital contribution ordered by the superintendent under provisions of
"Title XXXIX" of the Revised Code.
(c) For purposes of paragraph (D)(8) of this rule,
"liabilities" includes, but is not limited to, reserves required by
statute or by rules of the superintendent or specific requirements imposed by
the superintendent upon a subject issuer at the time of admission or subsequent
thereto.
(9) "Direct response
issuer" means an issuer who markets medicare supplement policies or
certificates without the direct involvement of an insurance agent.
(10) "Issuer"
includes insurance companies, fraternal benefit societies, health care service
plans health insuring corporations, and any other entities delivering or
issuing for delivery in this state medicare supplement policies or
certificates.
(11) "Medicare"
means the "Health Insurance for the Aged Act," "Title XVIII of
the Social Security Amendments" of 1965, as then constituted or later
amended.
(12) "Medicare
Advantage" plan means a plan of coverage for health benefits under
medicare "Part C" as defined in 42 U.S.C. 1395w-28(b)(1), and
includes:
(a) Coordinated care plans which provide health care services,
including but not limited to health insuring corporation plans (with or without
a point-of-service option), plans offered by provider-sponsored organizations,
and preferred provider organization plans;
(b) Medical savings account plans coupled with a contribution
into a "Medicare Advantage" medical savings account; and
(c) "Medicare Advantage" private fee-for-service
plans.
(13) "Medicare
supplement policy" means a group or individual policy of sickness and
accident insurance or a subscriber contract of hospital and medical service
associations or health insuring corporations, other than a policy issued
pursuant to a contract under section 1876 of the federal "Social Security
Act" (42 U.S.C. section 1395 et. seq.) or an issued policy under a
demonstration project specified in 42 U.S.C. 1395 ss (g)(1), which is
advertised, marketed or designed primarily as a supplement to reimbursements
under medicare for the hospital, medical or surgical expenses of persons
eligible for medicare. "Medicare supplement policy" does not include
"Medicare Advantage" plans established under medicare "Part
C", "Outpatient Prescription Drug" plans established under
medicare "Part D", or any "Health Care Prepayment Plan
(HCPP)" that provides benefits pursuant to an agreement under section
1833(a)(1)(A) of the "Social Security Act".
(14) "Pre-Standardized Medicare supplement benefit
plan," "Pre-Standardized benefit plan" or "Pre-Standardized
plan" means a group or individual policy of medicare supplement insurance
issued prior to May 1, 1992.
(15) "1990
Standardized Medicare supplement benefit plan," "1990 Standardized
benefit plan" or "1990 plan" means a group or individual policy
of medicare supplement insurance issued on or after May 1, 1992 and with an
effective date for coverage prior to June 1, 2010 and includes medicare
supplement insurance policies and certificates renewed on or after that date
which are not replaced by the issuer at the request of the
insured.
(16) "2010
Standardized Medicare supplement benefit plan," "2010 Standardized
benefit plan" or "2010 plan" means a group or individual policy
of medicare supplement insurance with an effective date for coverage on or
after June 1, 2010.
(17) "Policy
form" means the form on which the policy is delivered or issued for
delivery by the issuer.
(18) "Secretary" means the secretary of the "United
States" department of health and human services.
(E) Policy definitions and
terms
No policy or certificate may be advertised,
solicited or issued for delivery in this state as a medicare supplement policy
or certificate unless such policy or certificate contains definitions or terms
which conform to the requirements of paragraph (E) of this rule.
(1) "Accident,"
"accidental injury," or "accidental means" shall be defined
to employ "result" language and shall not include words which would
establish an accidental means test or use words such as "external,
violent, visible wounds" or similar words of description or
characterization.
(a) The definition shall not be more restrictive than the
following: "Injury or injuries for which benefits are provided means
accidental bodily injury sustained by the insured person which is the direct
result of an accident, independent of disease or bodily infirmity or any other
cause, and occurs while insurance coverage is in force."
(b) The definition may provide that the injuries shall not
include injuries for which benefits are provided or available under any
workers' compensation, employer's liability or similar law, or motor
vehicle no-fault plan, unless prohibited by law.
(2) "Benefit
period" or "medicare benefit period" shall not be defined more
restrictively than as defined in the medicare program.
(3) "Convalescent
nursing home," "extended care facility," or "skilled
nursing facility" shall not be defined more restrictively than as defined
in the medicare program.
(4) "Health care
expenses" means, for purposes of paragraph (Q) of this rule, expenses of
health insuring corporations associated with the delivery of health care
services, which expenses are analogous to incurred losses of
insurers.
(5) "Hospital"
may be defined in relation to its status, facilities and available services or
to reflect its accreditation by the "Joint Commission on Accreditation of
Hospitals," but not more restrictively than as defined in the medicare
program.
(6) "Medicare"
shall be defined in the policy and certificate. Medicare may be substantially
defined as the "Health Insurance for the Aged Act, Title XVIII of the
Social Security Amendments of 1965 as then constituted or later amended,"
or "Title I, Part I of Public Law 89-97, as enacted by the Eighty-Ninth
Congress of the United States of America and popularly known as the Health
Insurance for the Aged Act, as then constituted and any later amendments or
substitutes thereof," or words of similar import.
(7) "Medicare-eligible expenses" shall mean expenses of
the kinds covered by medicare, "Parts A" and "B," to the
extent recognized as reasonable and medically necessary by
medicare.
(8) "Physician"
shall not be defined more restrictively than as defined in the medicare
program.
(9) "Sickness"
shall not be defined to be more restrictive than the following:
"Sickness" means illness or disease
of an insured person which first manifests itself after the effective date of
insurance and while the insurance is in force.
The definition may be further modified to
exclude sicknesses or diseases for which benefits are provided under any
workers' compensation, occupational disease, employer's liability or
similar law.
(F) Policy provisions
(1) Except for permitted
preexisting condition clauses as described in paragraphs (G)(1)(a), (H)(1)(a),
and (I)(1)(a) of this rule, no policy or certificate may be advertised,
solicited or issued for delivery in this state as a medicare supplement policy
if the policy or certificate contains limitations or exclusions on coverage
that are more restrictive than those of medicare.
(2) No medicare
supplement policy or certificate may use waivers to exclude, limit or reduce
coverage or benefits for specifically named or described preexisting diseases
or physical conditions.
(3) No medicare
supplement policy or certificate in force in this state shall contain benefits
which duplicate benefits provided by medicare.
(4)
(a) Subject to paragraphs (G)(1)(d), (G)(1)(e), (G)(1)(g),
(H)(1)(d) and (H)(1)(e) of this rule, a medicare supplement policy with
benefits for outpatient prescription drugs in existence prior to January 1,
2006 shall be renewed for current policyholders who do not enroll in "Part
D" at the option of the policyholder.
(b) A medicare supplement policy with benefits for outpatient
prescription drugs shall not be issued after December 31, 2005.
(c) After December 31, 2005, a medicare supplement policy with
benefits for outpatient prescription drugs may not be renewed after the
policyholder enrolls in medicare "Part D" unless:
(i) The policy is
modified to eliminate outpatient prescription coverage for expenses of
outpatient prescription drugs incurred after the effective date of the
individual's coverage under a "Part D" plan and;
(ii) Premiums are
adjusted to reflect the elimination of outpatient prescription drug coverage at
the time of medicare "Part D" enrollment, accounting for any claims
paid, if applicable.
(G) Minimum benefit standards for
pre-standardized medicare supplement benefit plan policies or certificates
issued for delivery prior to May 1, 1992.
No policy or certificate may be advertised,
solicited or issued for delivery in this state prior to the effective date of
this rule as a medicare supplement policy or certificate unless it meets or
exceeds the following minimum standards. These are minimum standards and do not
preclude the inclusion of other provisions or benefits which are not
inconsistent with these standards.
(1) General
standards.
The following standards apply to medicare
supplement policies and certificates and are in addition to all other
requirements of this rule.
(a) A medicare supplement policy or certificate shall not exclude
or limit benefits for losses incurred more than six months from the effective
date of coverage because they involved a preexisting condition. The policy or
certificate shall not define a preexisting condition more restrictively than a
condition for which medical advice was given or treatment was recommended by or
received from a physician within six months before the effective date of
coverage.
(b) A medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis than
losses resulting from accidents.
(c) A medicare supplement policy or certificate shall provide
that benefits designed to cover cost-sharing amounts under medicare will be
changed automatically to coincide with any changes in the applicable medicare
deductible, copayment, or coinsurance amounts. Premiums may be modified to
correspond with such changes.
(d) A "noncancellable," "guaranteed
renewable," or "noncancellable and guaranteed renewable"
medicare supplement policy shall not:
(i) Provide for
termination of coverage of a spouse solely because of the occurrence of an
event specified for termination of coverage of the insured, other than the
nonpayment of premium; or
(ii) Be cancelled or
nonrenewed by the issuer solely on the grounds of deterioration of
health.
(e)
(i) Except as authorized
by the superintendent, an issuer shall neither cancel nor nonrenew a medicare
supplement policy or certificate for any reason other than nonpayment of
premium or material misrepresentation.
(ii) If a group medicare
supplement insurance policy is terminated by the group policyholder and not
replaced as provided in paragraph (G)(1)(e)(iv) of this rule, the issuer shall
offer certificate holders an individual medicare supplement policy. The issuer
shall offer the certificate holder at least the following choices:
(a) An individual
medicare supplement policy currently offered by the issuer having comparable
benefits to those contained in the terminated group medicare supplement policy;
and
(b) An individual
medicare supplement policy which provides only such benefits as are required to
meet the minimum standards as defined in paragraph (I)(2) of this
rule.
(iii) If membership in a
group is terminated, the issuer shall:
(a) Offer the certificate
holder the conversion opportunities described in paragraph (G)(1)(e)(ii) of
this rule; or
(b) At the option of the
group policyholder, offer the certificate holder continuation of coverage under
the group policy.
(iv) If a group medicare
supplement policy is replaced by another group medicare supplement policy
purchased by the same policyholder, the issuer of the replacement policy shall
offer coverage to all persons covered under the old group policy, such coverage
to be effective the date the preceding policy terminates. Coverage under the
new group policy shall not result in any exclusion for preexisting conditions
that would have been covered under the group policy being
replaced.
(f) Termination of a medicare supplement policy or certificate
shall be without prejudice to any continuous loss which commenced while the
policy was in force, but the extension of benefits beyond the period during
which the policy was in force may be predicated upon the continuous total
disability of the insured, limited to the duration of the policy benefit
period, if any, or to payment of the maximum benefits. Receipt of medicare
"Part D" benefits will not be considered in determining a continuous
loss.
(g) If a medicare supplement policy eliminates an outpatient
prescription drug benefit as a result of requirements imposed by the
"Medicare Prescription Drug, Improvement, and Modernization Act of
2003", the modified policy shall be deemed to satisfy the guaranteed
renewal requirements of paragraph (G)(1) of this rule.
(2) Minimum benefit
standards.
(a) Coverage of "Part A" medicare-eligible expenses for
hospitalization to the extent not covered by medicare from the sixty-first day
through the ninetieth day in any medicare benefit period.
(b) Coverage for either all or none of the medicare "Part
A" inpatient hospital deductible amount.
(c) Coverage of "Part A" medicare-eligible expenses
incurred as daily hospital charges during use of medicare's lifetime
hospital inpatient reserve days.
(d) Upon exhaustion of all medicare hospital inpatient coverage
including the lifetime reserve days, coverage of at least ninety per cent of
all medicare "Part A" eligible expenses for hospitalization not
covered by medicare subject to a lifetime maximum benefit of an additional
three hundred sixty-five days.
(e) Coverage under medicare "Part A" for the reasonable
cost of the first three pints of blood (or equivalent quantities of packed red
blood cells, as defined under federal regulations) unless replaced in
accordance with federal regulations or already paid for under "Part
B."
(f) Coverage for the coinsurance amount, or in the case of
hospital outpatient department services paid under a prospective payment
system, the copayment amount, of medicare-eligible expenses under "Part
B" regardless of hospital confinement, subject to a maximum calendar year
out-of-pocket amount equal to the medicare "Part B" deductible [one
hundred forty-seven dollars].
(g) Effective January 1, 1990, coverage under medicare "Part
B" for the reasonable cost of the first three pints of blood (or
equivalent quantities of packed red blood cells, as defined under federal
regulations), unless replaced in accordance with federal regulations or already
paid for under "Part A", subject to the medicare deductible
amount.
(H) Benefit standards for 1990
standardized medicare supplement benefit plan policies or certificates issued
or delivered on or after May 1, 1992 and with an effective date for coverage
prior to June 1, 2010.
The following standards are applicable to all
medicare supplement policies or certificates delivered or issued for delivery
in this state on or after May 1, 1992 and with an effective date for coverage
prior to June 1, 2010. No policy or certificate may be advertised, solicited,
delivered or issued for delivery in this state as a medicare supplement policy
or certificate unless it complies with these benefit standards.
(1) General standards.
The following standards apply to medicare supplement policies and certificates
and are in addition to all other requirements of this rule.
(a) A medicare supplement policy or certificate shall not exclude
or limit benefits for losses incurred more than six months from the effective
date of coverage because it involved a preexisting condition. The policy or
certificate may not define a preexisting condition more restrictively than a
condition for which medical advice was given or treatment was recommended by or
received from a physician within six months before the effective date of
coverage.
(b) A medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis than
losses resulting from accidents.
(c) A medicare supplement policy or certificate shall provide
that benefits designed to cover cost sharing amounts under medicare will be
changed automatically to coincide with any changes in the applicable medicare
deductible, copayment, or coinsurance amounts. Premiums may be modified to
correspond with such changes, in accordance with paragraph (R)(3)(b) of this
rule.
(d) No medicare supplement policy or certificate shall provide
for termination of coverage of a spouse solely because of the occurrence of an
event specified for termination of coverage of the insured, other than the
nonpayment of premium.
(e) Each medicare supplement policy shall be guaranteed
renewable.
(i) The issuer shall not
cancel or nonrenew the policy solely on the ground of health status of the
individual; and
(ii) The issuer shall not
cancel or nonrenew the policy for any reason other than nonpayment of premium
or material misrepresentation.
(iii) If the medicare
supplement policy is terminated by the group policyholder and is not replaced
as provided under paragraph (H)(1)(e)(v) of this rule, the issuer shall offer
each certificate holder an individual medicare supplement policy which (at the
option of the certificate holder)
(a) Provides for
continuation of the benefits contained in the group policy; or
(b) Provides for benefits
that otherwise meet the requirements of this subsection.
(iv) If an individual is
a certificate holder in a group medicare supplement policy and the individual
terminates membership in the group, the issuer shall:
(a) Offer the certificate
holder the conversion opportunity described in paragraph (H)(1)(e)(iii) of this
rule; or
(b) At the option of the
group policyholder, offer the certificate holder continuation of coverage under
the group policy.
(v) If a group medicare
supplement policy is replaced by another group medicare supplement policy
purchased by the same policyholder, the issuer of the replacement policy shall
offer coverage to all persons covered under the old group policy on its date of
termination. Coverage under the new policy shall not result in any exclusion
for preexisting conditions that would have been covered under the group policy
being replaced.
(vi) If a medicare
supplement policy eliminates an outpatient prescription drug benefit as a
result of requirements imposed by the "Medicare Prescription Drug,
Improvement and Modernization Act of 2003," the modified policy shall be
deemed to satisfy the guaranteed renewal requirements of paragraph (H)(1) of
this rule.
(f) Termination of a medicare supplement policy or certificate
shall be without prejudice to any continuous loss which commenced while the
policy was in force, but the extension of benefits beyond the period during
which the policy was in force may be conditioned upon the continuous total
disability of the insured, limited to the duration of the policy benefit
period, if any, or payment of the maximum benefits. Receipt of medicare
"Part D" benefits will not be considered in determining a continuous
loss.
(g)
(i) A medicare supplement
policy or certificate shall provide that benefits and premiums under the policy
or certificate shall be suspended at the request of the policyholder or
certificate holder for the period (not to exceed twenty-four months) in which
the policyholder or certificate holder has applied for and is determined to be
entitled to medical assistance under "Title XIX of the Social Security
Act," but only if the policyholder or certificate holder notifies the
issuer of such policy or certificate within ninety days after the date the
individual becomes entitled to assistance.
(ii) If suspension occurs
and if the policyholder or certificate holder loses entitlement to such medical
assistance, the policy or certificate shall be automatically reinstituted
effective as of the date of termination of such entitlement if the policyholder
or certificate holder provides notice of loss of such entitlement within ninety
days after the date of loss and pays the premium attributable to the
period.
(iii) Each medicare
supplement policy shall provide that benefits and premiums under the policy
shall be suspended (for any period that may be provided by federal regulation)
at the request of the policyholder if the policyholder is entitled to benefits
under section 226(b) of the "Social Security Act" and is covered
under a group health plan (as defined in section 1862 (b)(1)(A)(v) of the
"Social Security Act"). If suspension occurs and if the policyholder
or certificateholder loses coverage under the group health plan, the policy
shall be automatically reinstituted (effective as of the date of loss of
coverage) if the policyholder provides notice of loss of the coverage within
ninety days after the date of loss.
(iv) Reinstitution of
such coverages described in paragraphs (H)(1)(g)(ii) and (H)(1)(g)(iii) of this
rule:
(a) Shall not provide for
any waiting period with respect to treatment of preexisting
conditions;
(b) Shall provide for
resumption of coverage that is substantially equivalent to coverage in effect
before the date of such suspension. If the suspended medicare supplement policy
provided coverage for outpatient prescription drugs, reinstitution of the
policy for medicare "Part D" enrollees shall be without coverage for
outpatient prescription drugs and shall otherwise provide substantially
equivalent coverage to the coverage in effect before the date of suspension;
and
(c) Shall provide for
classification of premiums on terms at least as favorable to the policyholder
or certificate holder as the premium classification terms that would have
applied to the policyholder or certificate holder had the coverage not been
suspended.
(h) If an issuer makes a written offer to the medicare supplement
policyholders or certificate holders of one or more of its plans, to exchange
during a specified period from his or her 1990 standardized plan (as described
in paragraph (J) of this rule) to a 2010 standardized plan (as described in
paragraph (K) of this rule), the offer and subsequent exchange shall comply
with the following requirements:
(i) An issuer need not
provide justification to the superintendent if the insured replaces a 1990
standardized policy or certificate with an issue age rated 2010 standardized
policy or certificate at the insured's original issue age and duration. If
an insured's policy or certificate to be replaced is priced on an issue
age rate schedule at the time of such offer, the rate charged to the insured
for the new exchanged policy shall recognize the policy reserve buildup, due to
the prefunding inherent in the use of an issue age rate basis, for the benefit
of the insured. The method proposed to be used by an issuer must be filed with
the superintendent in accordance with paragraph (R) of this rule.
(ii) The rating class of
the new policy or certificate shall be the class closest to the insured's
class of the replaced coverage.
(iii) An issuer may not
apply new pre-existing condition limitations or a new incontestability period
to the new policy for those benefits contained in the exchanged 1990
standardized policy or certificate of the insured, but may apply pre-existing
condition limitations of no more than six months to any added benefits
contained in the new 2010 standardized policy or certificate not contained in
the exchanged policy.
(iv) The new policy or
certificate shall be offered to all policyholders or certificate holders within
a given plan, except where the offer or issue would be in violation of state or
federal law.
(2) Standards for basic
("core") benefits common to benefit plans "A" -
"J"
Every issuer shall make available to each
prospective insured a policy or certificate including only the following basic
"core" package of benefits. An issuer may make available to
prospective insureds any of the other medicare supplement insurance benefit
plans in addition to the basic "core" package, but not in lieu of
it.
(a) Coverage of "Part A" medicare-eligible expenses for
hospitalization to the extent not covered by medicare from the sixty-first day
through the ninetieth day in any medicare benefit period;
(b) Coverage of "Part A" medicare-eligible expenses
incurred for hospitalization to the extent not covered by medicare for each
medicare lifetime inpatient reserve day used;
(c) Upon exhaustion of the medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of one hundred per cent of the
medicare "Part A" eligible expenses for hospitalization paid at the
applicable prospective payment system ("PPS") rate, or other
appropriate medicare standard of payment, subject to a lifetime maximum benefit
of an additional three hundred sixty-five days. The provider shall accept the
issuer's payment as payment in full and may not bill the insured for any
balance;
(d) Coverage under medicare "Parts A" and "B"
for the reasonable cost of the first three pints of blood (or equivalent
quantities of packed red blood cells, as defined under federal regulations)
unless replaced in accordance with federal regulations;
(e) Coverage for the coinsurance amount or in the case of
hospital outpatient department services paid under a prospective payment
system, the copayment amount, of medicare eligible expenses under "Part
B" regardless of hospital confinement, subject to the medicare "Part
B" deductible.
(3) Standards for
additional benefits. The following additional benefits shall be included in
medicare supplement benefit plans "B" through "J" only as
provided by paragraph (J) of this rule.
(a) Medicare "Part A" deductible: coverage for all of
the medicare "Part A" inpatient hospital deductible amount per
benefit period.
(b) Skilled nursing facility care: coverage for the actual billed
charges up to the coinsurance amount from the twenty-first day through the one
hundredth day in a medicare benefit period for post-hospital skilled nursing
facility care eligible under medicare "Part A";
(c) Medicare "Part B" deductible: coverage for all of
the medicare "Part B" deductible amount per calendar year regardless
of hospital confinement.
(d) Eighty per cent of the medicare "Part B" excess
charges: coverage for eighty per cent of the difference between the actual
medicare "Part B" charge as billed, not to exceed any charge
limitation established by the medicare program or state law, and the
medicare-approved "Part B" charge.
(e) One hundred per cent of the medicare "Part B"
excess charges: coverage for all of the difference between the actual medicare
"Part B" charge as billed, not to exceed any charge limitation
established by the medicare program or state law, and the medicare-approved
"Part B" charge.
(f) Basic outpatient prescription drug benefit: coverage for
fifty per cent of outpatient prescription drug charges, after a two hundred
fifty dollar calendar year deductible, to a maximum of one thousand two hundred
fifty dollars in benefits received by the insured per calendar year, to the
extent not covered by medicare. The outpatient prescription drug benefit may be
included for sale or issuance in a medicare supplement policy until January 1,
2006.
(g) Extended outpatient prescription drug benefit: coverage for
fifty per cent of outpatient prescription drug charges, after a two hundred
fifty dollar calendar year deductible to a maximum of three thousand dollars in
benefits received by the insured per calendar year, to the extent not covered
by medicare. The outpatient prescription drug benefit may be included for sale
or issuance in a medicare supplement policy until January 1, 2006.
(h) Medically necessary emergency care in a foreign country:
coverage to the extent not covered by medicare for eighty per cent of the
billed charges for medicare-eligible expenses for medically necessary emergency
hospital, physician and medical care received in a foreign country, which care
would have been covered by medicare if provided in the "United
States" and which care began during the first sixty consecutive days of
each trip outside the "United States", subject to a calendar year
deductible of two hundred fifty dollars, and a lifetime maximum benefit of
fifty thousand dollars. For purposes of this benefit, "emergency
care" shall mean care needed immediately because of an injury or an
illness of sudden and unexpected onset.
(i) Preventive medical care benefit: coverage for the following
preventive health services not covered by medicare:
(i) An annual clinical
preventive medical history and physical examination that may include tests and
services from paragraph (H)(3)(i)(ii) of this rule and patient education to
address preventive health care measures:
(ii) Preventive screening
tests or preventive services, the selection and frequency of which is
determined to be medically appropriate by the attending physician.
Reimbursement shall be for the actual
charge up to one hundred per cent of the medicare approved amount for each
service, as if medicare were to cover the service as identified in
"American Medical Association" current procedural terminology
("AMA CPT") codes, to a maximum of one hundred twenty dollars
annually under this benefit. This benefit shall not include payment for any
procedure covered by medicare.
(j) At-home recovery benefit: coverage for services to provide
short term, at-home assistance with activities of daily living for those
recovering from an illness, injury or surgery.
(i) For purposes of this
benefit, the following definitions shall apply:
(a) "Activities of
daily living" include, but are not limited to bathing, dressing, personal
hygiene, transferring, eating, ambulating, assistance with drugs that are
normally self-administered, and changing bandages or other
dressings.
(b) "Care
provider" means a duly qualified or licensed home health aide or
homemaker, personal care aide or nurse provided through a licensed home health
care agency or referred by a licensed referral agency or licensed nurses
registry.
(c) "Home"
shall mean any place used by the insured as a place of residence, provided that
such place would qualify as a residence for home health care services covered
by medicare. A hospital or skilled nursing facility shall not be considered the
insured's place of residence.
(d) "At-home
recovery visit" means the period of a visit required to provide at home
recovery care, without limit on the duration of the visit, except each
consecutive four hours in a twenty-four hour period of services provided by a
care provider is one visit.
(ii) Coverage
requirements and limitations
(a) At-home recovery
services provided must be primarily services which assist in activities of
daily living.
(b) The insured's
attending physician must certify that the specific type and frequency of
at-home recovery services are necessary because of a condition for which a home
care plan of treatment was approved by medicare.
(c) Coverage is limited
to:
(i) No more than the
number and type of at-home recovery visits certified as necessary by the
insured's attending physician. The total number of at-home recovery visits
shall not exceed the number of medicare approved home health care visits under
a medicare approved home care plan of treatment.
(ii) The actual charges
for each visit up to a maximum reimbursement of forty dollars per
visit.
(iii) One thousand six
hundred dollars per calendar year.
(iv) Seven visits in any
one week.
(v) Care furnished on a
visiting basis in the insured's home.
(vi) Services provided by
a care provider as defined in paragraph (H)(3)(j) of this rule.
(vii) At-home recovery
visits while the insured is covered under the policy or certificate and not
otherwise excluded.
(viii) At-home recovery
visits received during the period the insured is receiving medicare approved
home care services or no more than eight weeks after the service date of the
last medicare approved home health care visit.
(iii) Coverage is
excluded for:
(a) Home care visits paid
for by medicare or other government programs; and
(b) Care provided by
family members, unpaid volunteers or providers who are not care
providers.
(4) Standards for plans
"K" and "L"
(a) Standardized medicare supplement benefit plan "K"
shall consist of the following:
(i) Coverage of one
hundred per cent of the "Part A" hospital coinsurance amount for each
day used from the sixty-first through the ninetieth day in any medicare benefit
period;
(ii) Coverage of one
hundred per cent of the "Part A" hospital coinsurance amount for each
medicare lifetime inpatient reserve day used from the ninety-first through the
one hundred fiftieth day in any medicare benefit period;
(iii) Upon exhaustion of
the medicare hospital inpatient coverage, including the lifetime reserve days,
coverage of one hundred per cent of the medicare "Part A" eligible
expenses for hospitalization paid at the applicable prospective payment system
("PPS") rate, or other appropriate medicare standard of payment,
subject to a lifetime maximum benefit of an additional three hundred sixty-five
days. The provider shall accept the issuer's payment as payment in full
and may not bill the insured for any balance;
(iv) Medicare "Plan
A" deductible: coverage for fifty per cent of the medicare "Part
A" inpatient hospital deductible amount per benefit period until the
out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this
rule;
(v) Skilled nursing
facility care coverage for fifty per cent of the coinsurance amount for each
day used from the twenty-first day through the one hundredth day in a medicare
benefit period for post-hospital skilled nursing facility care eligible under
medicare "Part A" until the out-of-pocket limitation is met as
described in paragraph (H)(4)(a)(x) of this rule;
(vi) Hospice care
coverage for fifty per cent of cost sharing for all "Part A"
medicare-eligible expenses and respite care until the out-of-pocket limitation
is met as described in paragraph (H)(4)(a)(x) of this rule;
(vii) Coverage for fifty
per cent under medicare "Parts A" or "B", of the reasonable
cost of the first three pints of blood (or equivalent quantities of packed red
blood cells, as defined under federal regulations) unless replaced in
accordance with federal regulations until the out-of-pocket limitation is met
as described in paragraph (H)(4)(a)(x) of this rule;
(viii) Except for
coverage provided in paragraph (H)(4)(a)(ix) of this rule, coverage for fifty
per cent of the cost sharing otherwise applicable under medicare "Part
B" after the policyholder pays the "Part B" deductible until the
out-of-pocket limitation is met as described in paragraph (H)(4)(a)(x) of this
rule:
(ix) Coverage of one
hundred per cent of the cost sharing for medicare "Part B" preventive
services after the policyholder pays the "Part B" deductible;
and
(x) Coverage of one
hundred per cent of all cost sharing under medicare "Parts A" and
"B" for the balance of the calendar year after the individual has
reached the out-of-pocket limitation on annual expenditures under medicare
"Parts A" and "B" of four thousand dollars in 2006, indexed
each year by the appropriate inflation adjustment specified by the secretary of
the "United States" department of health and human
services.
(b) Standardized medicare supplement benefit plan "L"
shall consist of the following:
(i) The benefits
described in paragraphs (H)(4)(a)(i), (H)(4)(a)(ii), (H)(4)(a)(iii), and
(H)(4)(a)(ix) of this rule;
(ii) The benefit
described in paragraphs (H)(4)(a)(iv), (H)(4)(a)(v), (H)(4)(a)(vi),
(H)(4)(a)(vii), and (H)(4)(a)(viii) of this rule, but substituting seventy-five
per cent for fifty per cent; and
(iii) The benefit
described in paragraph (H)(4)(a)(x) of this rule, but substituting two thousand
dollars for four thousand dollars.
(I) Benefit standards for 2010
standardized medicare supplement benefit plan policies or certificates issued
or delivered with an effective date for coverage on or after June 1,
2010.
The following standards are applicable to all
medicare supplement policies or certificates delivered or issued for delivery
in this state with an effective date for coverage on or after June 1, 2010. No
policy or certificate may be advertised, solicited, delivered or issued for
delivery in this state as a medicare supplement policy or certificate unless it
complies with these benefit standards. No issuer may offer any 1990
standardized medicare supplement benefit plan for sale on or after the June 1,
2010 effective date of these 2010 standardized medicare supplement benefit plan
standards in this state. Benefit standards applicable to medicare supplement
policies and certificates issued with an effective date for coverage prior to
June 1, 2010 remain subject to the requirements of paragraph (H) of this
rule.
(1) General standards.
The following standards apply to medicare supplement policies and certificates
and are in addition to all other requirements of this rule.
(a) A medicare supplement policy or certificate shall not exclude
or limit benefits for losses incurred more than six months from the effective
date of coverage because it involved a preexisting condition. The policy or
certificate may not define a preexisting condition more restrictively than a
condition for which medical advice was given or treatment was recommended or
received from a physician within six months before the effective date of
coverage.
(b) A medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis than
losses resulting from accidents.
(c) A medicare supplement policy or certificate shall provide
that benefits designed to cover cost sharing amounts under medicare will be
changed automatically to coincide with any changes in the applicable medicare
deductible, copayment, or coinsurance amounts. Premiums may be modified to
correspond with such changes.
(d) No medicare supplement policy or certificate shall provide
for termination of coverage of a spouse solely because of the occurrence of an
event specified for termination of coverage of the insured, other than the
nonpayment of premium.
(e) Each medicare supplement policy shall be guaranteed
renewable.
(i) The issuer shall not
cancel or nonrenew the policy solely on the ground of health status of the
individual.
(ii) The issuer shall not
cancel or nonrenew the policy for any reason other than nonpayment of premium
or material misrepresentation.
(iii) If the medicare
supplement policy is terminated by the group policyholder and is not replaced
as provided under paragraph (I)(1)(e)(5) of this rule, the issuer shall offer
certificate holders an individual medicare supplement policy which (at the
option of the certificate holder):
(a) Provides for the
continuation of the benefits contained in the group policy; or
(b) Provides for benefits
that otherwise meet the requirements of paragraph (I) of this
rule.
(iv) If an individual is
a certificate holder in a group medicare supplement policy and the individual
terminates membership in the group, the issuer shall:
(a) Offer the certificate
holder the conversion opportunity described in paragraph (I)(1)(e)(3) of this
rule; or
(b) At the option of the
group policyholder, offer the certificate holder continuation coverage under
the group policy.
(v) If a group medicare
supplement policy is replaced by another group medicare supplement policy
purchased by the same policyholder, the issuer of the replacement policy shall
offer coverage to all persons covered under the old group policy on its date of
termination. Coverage under the new policy shall not result in any exclusion
for preexisting conditions that would have been covered under the group policy
being replaced.
(f) Termination of a medicare supplement policy or certificate
shall be without prejudice to any continuous loss which commenced while the
policy was in force, but the extension of benefits beyond the period during
which the policy was in force may be conditioned upon the continuous total
disability of the insured, limited to the duration of the policy benefit
period, if any, or payment of the maximum benefits. Receipt of medicare
"Part D" benefits will not be considered in determining a continuous
loss.
(g)
(i) A medicare supplement
policy or certificate shall provide that benefits and premiums under the policy
or certificate shall be suspended at the request of the policyholder or
certificate holder for the period (not to exceed twenty-four months) in which
the policyholder or certificate holder has applied for and is determined to be
entitled to medical assistance under "Title XIX of the Social Security
Act," but only if the policyholder or certificate holder notifies the
issuer of the policy or certificate within ninety days after the date the
individual becomes entitled to assistance.
(ii) If suspension occurs
and if the policyholder or certificate holder loses entitlement to medical
assistance, the policy or certificate shall be automatically reinstituted
(effective as of the date of termination of entitlement) as of the termination
of entitlement if the policyholder or certificate holder provides notice of
loss of entitlement within ninety days after the date of loss and pays the
premium attributable to the period, effective as of the date of termination of
entitlement.
(iii) Each medicare
supplement policy shall provide that benefits and premiums under the policy
shall be suspended (for any period that may be provided by federal regulation)
at the request of the policyholder if the policyholder is entitled to benefits
under section 226(b) of the "Social Security Act" and is covered
under a group health plan as defined in section 1862 (b)(1)(A)(v) of the
"Social Security Act." If suspension occurs and if the policyholder
or certificate holder loses coverage under the group health plan, the policy
shall be automatically reinstituted (effective as of the date of loss of
coverage) if the policyholder provides notice of loss of coverage within ninety
days after the date of the loss.
(iv) Reinstitution of
coverages as described in paragraphs (I)(2) and (I)(3) of this
rule:
(a) Shall not provide for
any waiting period with respect to treatment of preexisting
conditions;
(b) Shall provide for
resumption of coverage that is substantially equivalent to coverage in effect
before the date of suspension; and
(c) Shall provide for
classification of premiums on terms at least as favorable to the policyholder
or certificate holder as the premium classification terms that would have
applied to the policyholder or certificate holder had the coverage not been
suspended.
(2) Standards for basic
(core) benefits common to medicare supplement insurance benefit plans
"A," "B," "C," "D," "F,"
"F With High Deductible," "G," "M," and
"N". Every issuer of medicare supplement insurance benefit plans
shall make available a policy or certificate including only the following basic
"core" package of benefits to each prospective insured. An issuer may
make available to prospective insureds any of the other medicare supplement
insurance benefit plans in addition to the basic core package, but not in lieu
of it.
(a) Coverage of "Part A" medicare-eligible expenses for
hospitalization to the extent not covered by medicare from the sixty-first day
through the ninetieth day in any medicare benefit period;
(b) Coverage of "Part A" medicare-eligible expenses
incurred for hospitalization to the extent not covered by medicare for each
medicare lifetime inpatient reserve day used;
(c) Upon exhaustion of the medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of one hundred per cent of the
medicare "Part A" eligible expenses for hospitalization paid at the
applicable prospective payment system ("PPS") rate, or other
appropriate medicare standard of payment, subject to a lifetime maximum benefit
of an additional three hundred sixty-five days. The provider shall accept the
issuer's payment as payment in full and may not bill the insured for any
balance;
(d) Coverage under medicare "Parts A" and "B"
for the reasonable cost of the first three pints of blood (or equivalent
quantities of packed red blood cells, as defined under federal regulations)
unless replaced in accordance with federal regulations;
(e) Coverage for the coinsurance amount, or in the case of
hospital outpatient department services paid under a prospective payment
system, the copayment amount, of medicare eligible expenses under "Part
B" regardless of hospital confinement, subject to the medicare "Part
B" deductible;
(f) Hospice care: coverage of cost sharing for all "Part
A" medicare eligible hospice care and respite care expenses.
(3) Standards for
additional benefits. The following additional benefits shall be included in
medicare supplement benefit plans "B," "C," "D,"
"F," "F With High Deductible," "G,"
"M," and "N" as provided by paragraph (K) of this
rule.
(a) Medicare "Part A" deductible: coverage for one
hundred per cent of the medicare "Part A" inpatient hospital
deductible amount per benefit period.
(b) Medicare "Part A" deductible: coverage for fifty
per cent of the medicare "Part A" inpatient hospital deductible
amount per benefit period.
(c) Skilled nursing facility care: coverage for the actual billed
charges up to the coinsurance amount from the twenty-first day through the one
hundredth day in a medicare benefit period for post-hospital skilled nursing
facility care eligible under medicare "Part A."
(d) Medicare "Part B" deductible: coverage for one
hundred per cent of the medicare "Part B" deductible amount per
calendar year regardless of hospital confinement.
(e) One hundred per cent of the medicare "Part B"
excess charges: coverage for all of the difference between the actual medicare
"Part B" charges as billed, not to exceed any charge limitation
established by the medicare program or state law, and the medicare-approved
"Part B" charge.
(f) Medically necessary emergency care in a foreign country:
coverage to the extent not covered by medicare for eighty per cent of the
billed charges for medicare-eligible expenses for medically necessary emergency
hospital, physician and medical care received in a foreign country, which care
would have been covered by medicare if provided in the "United
States" and which care began during the first sixty consecutive days of
each trip outside the "United States," subject to a calendar year
deductible of two hundred fifty dollars, and a lifetime maximum benefit of
fifty thousand dollars. For purposes of this benefit, "emergency
care" shall mean care needed immediately because of an injury or an
illness of sudden and unexpected onset.
(J) Standard medicare supplement benefit
plans for 1990 standardized medicare supplement benefit plan policies or
certificates issued for delivery on or after May 1, 1992 and with an effective
date for coverage prior to June 1, 2010.
(1) An issuer shall make
available to each prospective policyholder and certificate holder a policy form
or certificate form containing only the basic "core" benefits, as
defined in paragraph (H)(2) of this rule.
(2) No groups, packages
or combinations of medicare supplement benefits other than those listed in
paragraph (J) of this rule shall be offered for sale in this state, except as
may be permitted in paragraphs (J) (7) and (M) of this rule.
(3) Benefit plans shall
be uniform in structure, language, designation and format to the standard
benefit plans "A" through "L" listed in paragraph (J)(5) of
this rule and conform to the definitions in paragraph (D) of this rule. Each
benefit shall be structured in accordance with the format provided in
paragraphs (H)(2) and (H)(3), or (H)(4) of this rule and list the benefits in
the order shown in paragraph (J)(5) of this rule. For purposes of this
paragraph, "structure, language, and format" means style, arrangement
and overall content of a benefit.
(4) An issuer may use, in
addition to the benefit plan designations required in paragraph (J)(3) of this
rule, other designations to the extent permitted by law.
(5) Make-up of benefit
plans:
(a) Standardized medicare supplement benefit plan "A"
shall be limited to the basic ("core") benefits common to all benefit
plans, as defined in paragraph (H)(2) of this rule.
(b) Standardized medicare supplement benefit plan "B"
shall include only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible as defined
in paragraph (H)(3)(a) of this rule.
(c) Standardized medicare supplement benefit plan "C"
shall include only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, medicare "Part B" deductible and medically
necessary emergency care in a foreign country as defined in paragraphs
(H)(3)(a), (H)(3)(b), (H)(3)(c), and (H)(3)(h) of this rule,
respectively.
(d) Standardized medicare supplement benefit plan "D"
shall include only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, medically necessary emergency care in a foreign country
and the at-home recovery benefit as defined in paragraphs (H)(3)(a), (H)(3)(b),
(H)(3)(h), and (H)(3)(j) of this rule, respectively.
(e) Standardized medicare supplement benefit [regular] plan
"E" shall include only the following: the core benefit as defined in
paragraph (H)(2) of this rule, plus the medicare "Part A" deductible,
skilled nursing facility care, medically necessary emergency care in a foreign
country and preventive medical care as defined in paragraphs (H)(3)(a),
(H)(3)(b), (H)(3)(h), and (H)(3)(i) of this rule, respectively.
(f) Standardized medicare supplement benefit plan "F"
shall include only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, the
skilled nursing facility care, the "Part B" deductible, one hundred
per cent of the medicare "Part B" excess charges, and medically
necessary emergency care in a foreign country as defined in paragraphs
(H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e), and (H)(3)(h) of this rule,
respectively.
(g) Standardized medicare supplement benefit high deductible plan
"F" shall include only the following: one hundred per cent of covered
expenses following the payment of the annual high deductible plan "F"
deductible. The covered expenses include the core benefit as defined in
paragraph (H)(2) of this rule, plus the medicare "Part A" deductible,
skilled nursing facility care, the medicare "Part B" deductible, one
hundred per cent of the medicare "Part B" excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e) and (H)(3)(h) of this
rule, respectively. The annual high deductible plan "F" deductible
shall consist of out-of-pocket expenses, other than premiums, for services
covered by the medicare supplement plan "F" policy, and shall be in
addition to any other specific benefit deductibles. The annual high deductible
plan "F" deductible shall be fifteen hundred dollars for 1998 and
1999, and shall be based on the calendar year. It shall be adjusted annually
thereafter by the secretary to reflect the change in the consumer price index
for all urban consumers for the twelve-month period ending with August of the
preceding year, and rounded to the nearest multiple of ten
dollars.
(h) Standardized medicare supplement benefit plan "G"
shall include only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, eighty per cent of the medicare "Part B"
excess charges, medically necessary emergency care in a foreign country, and
the at-home recovery benefit as defined in paragraphs (H)(3)(a), (H)(3)(b),
(H)(3)(d), (H)(3)(h), and (H)(3)(j) of this rule, respectively.
(i) Standardized medicare supplement benefit plan "H"
shall consist of only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, basic prescription drug benefit and medically necessary
emergency care in a foreign country as defined in paragraphs (H)(3)(a),
(H)(3)(b), (H)(3)(f), and (H)(3)(h) of this rule, respectively. The outpatient
prescription drug benefit shall not be included in a medicare supplement policy
sold after December 31, 2005.
(j) Standardized medicare supplement benefit plan "I"
shall consist of only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, one hundred per cent of the medicare "Part B"
excess charges, basic prescription drug benefit, medically necessary emergency
care in a foreign country and at-home recovery benefit as defined in paragraphs
(H)(3)(a), (H)(3)(b), (H)(3)(e), (H)(3)(f), (H)(3)(h), and (H)(3)(j) of this
rule, respectively. The outpatient prescription drug benefit shall not be
included in a medicare supplement policy sold after December 31,
2005.
(k) Standardized medicare supplement benefit plan "J"
shall consist of only the following: the core benefit as defined in paragraph
(H)(2) of this rule, plus the medicare "Part A" deductible, skilled
nursing facility care, medicare "Part B" deductible, one hundred per
cent of the medicare "Part B" excess charges, extended prescription
drug benefit, medically necessary emergency care in a foreign country,
preventive medical care and at-home recovery benefit as defined in paragraphs
(H)(3)(a), (H)(3)(b), (H)(3)(c), (H)(3)(e), (H)(3)(g), (H)(3)(h), (H)(3)(i),
and (H)(3)(j) of this rule, respectively. The outpatient prescription drug
benefit shall not be included in a medicare supplement policy sold after
December 31, 2005.
(l) Standardized medicare supplement benefit high deductible plan
"J" shall consist of only the following: one hundred per cent of
covered expenses following the payment of the annual high deductible plan
"J" deductible. The covered expenses include the core benefit as
defined in paragraph (H)(2) of this rule, plus the medicare "Part A"
deductible, skilled nursing facility care, medicare "Part B"
deductible, one hundred per cent of the medicare "Part B" excess
charges, extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care benefit and
at-home recovery benefit as defined in paragraphs (H)(3)(a), (H)(3)(b),
(H)(3)(c), (H)(3)(e), (H)(3)(g), (H)(3)(h), (H)(3)(i), and (H)(3)(j) of this
rule, respectively. The annual high deductible plan "J" deductible
shall consist of out-of-pocket expenses, other than premiums, for services
covered by the medicare supplement plan "J" policy, and shall be in
addition to any other specific benefit deductibles. The annual deductible shall
be fifteen hundred dollars for 1998 and 1999, and shall be based on a calendar
year. It shall be adjusted annually thereafter by the secretary to reflect the
change in the consumer price index for all urban consumers for the twelve-month
period ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars. The outpatient prescription drug benefit shall not be
included in a medicare supplement policy sold after December 31,
2005.
(6) Make-up of two
medicare supplement plans mandated by "The Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (MMA)";
(a) Standardized medicare supplement benefit plan "K"
shall consist of only those benefits described in paragraph (H)(4)(a) of this
rule:
(b) Standardized medicare supplement benefit plan "L"
shall consist of only those benefits described in paragraph (H)(4)(b) of this
rule.
(7) New or innovative
benefits: an issuer may, with the prior approval of the superintendent, offer
policies or certificates with new or innovative benefits in addition to the
benefits provided in a policy or certificate that otherwise complies with the
applicable standards. The new or innovative benefits may include benefits that
are appropriate to medicare supplement insurance, new or innovative, not
otherwise available, cost-effective, and offered in a manner which is
consistent with the goal of simplification of medicare supplement policies.
After December 31, 2005, the innovative benefit shall not include an outpatient
prescription drug benefit.
(K) Standard medicare supplement benefit
plans for 2010 standardized medicare supplement benefit plan policies or
certificates issued for delivery with an effective date for coverage on or
after June 1, 2010.
The following standards are applicable to all
medicare supplement policies or certificates delivered or issued for delivery
in this state with an effective date for coverage on or after June 1, 2010. No
policy or certificate may be advertised, solicited, delivered or issued for
delivery in this state as a medicare supplement policy or certificate unless it
complies with these benefit plan standards. Benefit plan standards applicable
to medicare supplement policies and certificates issued with an effective date
for coverage before June 1, 2010 remain subject to the requirements of
paragraph (J) of this rule.
(1) An issuer shall make
available to each prospective policyholder and certificate holder a policy form
containing only the basic (core) benefits, as defined in paragraph (I)(2) of
this rule.
(2) If an issuer makes
available any of the additional benefits described in paragraph (I)(3) of this
rule, or offers standardized benefit plans "K" or "L" as
described in paragraphs (K)(5)(h) and (K)(5)(i) of this rule, then the issuer
shall make available to each prospective policyholder and certificate holder,
in addition to a policy form or certificate form with only the basic (core)
benefits as described in the first sentence of paragraph (K) of this rule, a
policy form or certificate form containing either standardized benefit plan
"C" as described in paragraph (K)(5)(c) of this rule or standardized
benefit plan "F" as described in paragraph (K)(5)(e) of this
rule.
(3) No groups, packages
or combinations of medicare supplement benefits other than those listed in this
paragraph (K) of this rule shall be offered for sale in this state, except as
may be provided in paragraphs (K)(7) and (M) of this rule.
(4) Benefit plans shall
be uniform in structure, language, designation and format to the standard
benefit plans listed in this paragraph and conform to the definitions in
paragraph (D) of this rule. Each benefit shall be structured in accordance with
the format provided in paragraphs (I)(2) and (I)(3) of this rule; or, in the
case of plans "K" or "L," in paragraph (K)(6)(h) or
(K)(6)(i) of this rule and list the benefits in the order shown. For purposes
of this paragraph, "structure, language, and format" means style,
arrangement and overall content of a benefit.
(5) In addition to the
benefit plan designations required in paragraph (K)(4) of this rule, an issuer
may use other designations to the extent permitted by law.
(6) Make-up of 2010
standardized benefit plans.
(a) Standardized medicare supplement benefit plan "A"
shall include only the following: the basic (core) benefits as defined in
paragraph (I)(2) of this rule.
(b) Standardized medicare supplement benefit plan "B"
shall include only the following: the basic (core) benefit as defined in
paragraph (I)(2) of this rule, plus one hundred per cent of the medicare
"Part A" deductible as defined in paragraph (I)(3)(a) of this
rule.
(c) Standardized medicare supplement benefit plan "C"
shall include only the following: the basic (core) benefit as defined in
paragraph (I)(2) of this rule, plus one hundred per cent of the medicare
"Part A" deductible, skilled nursing facility care, one hundred per
cent of the medicare "Part B" deductible, and medically necessary
emergency care in a foreign country as defined in paragraphs (I)(3)(a),
(I)(3)(c), (I)(3)(d) and (I)(3)(f) of this rule, respectively.
(d) Standardized medicare supplement benefit plan "D"
shall include only the following: the basic (core) benefit (as defined in
paragraph (I)(2) of this rule), plus one hundred per cent of the medicare
"Part A" deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country as defined in paragraphs
(I)(3)(a), (I)(3)(c) and (I)(3)(f) of this rule, respectively.
(e) Standardized medicare supplement benefit [regular] plan
"F" shall include only the following: the basic (core) benefit as
defined in paragraph (I)(2) of this rule, plus one hundred per cent of the
medicare "Part A" deductible, the skilled nursing facility care, one
hundred per cent of the medicare "Part B" deductible, one hundred per
cent of the medicare "Part B" excess charges, and medically necessary
emergency care in a foreign country as defined in paragraphs (I)(3)(a),
(I)(3)(c), (I)(3)(d), (I)(3)(e) and (I)(3)(f) of this rule,
respectively.
(f) Standardized medicare supplement plan "F With High
Deductible" shall include only the following: one hundred per cent of
covered expenses following the payment of the annual deductible set forth in
paragraph (K)(6)(f)(ii) of this rule.
(i) The basic (core)
benefit as defined in paragraph (I)(2) of this rule, plus one hundred per cent
of the medicare "Part A" deductible, skilled nursing facility care,
one hundred per cent of the medicare "Part B" deductible, one hundred
per cent of the medicare "Part B" excess charges, and medically
necessary emergency care in a foreign country as defined in paragraphs
(I)(3)(a), (I)(3)(c), (I)(3)(d), (I)(3)(e) and (I)(3)(f) of this rule,
respectively.
(ii) The annual
deductible in plan "F With High Deductible" shall consist of
out-of-pocket expenses, other than premiums, for services covered by [regular]
plan "F," and shall be in addition to any other specific benefit
deductibles. The basis for the deductible shall be one thousand five hundred
dollars, and shall be adjusted annually from 1999 by the secretary of the
"United States" department of health and human services to reflect
the changes in the consumer price index for all urban consumers for the
twelve-month period ending with August of the preceding year, and rounded to
the nearest multiple of ten dollars.
(g) Standardized medicare supplement benefit plan "G"
shall include only the following: the basic (core) benefit as defined in
paragraph (I)(2) of this rule, plus one hundred per cent of the medicare
"Part A" deductible, skilled nursing facility care, one hundred per
cent of the medicare "Part B" excess charges, and medically necessary
emergency care in a foreign country as defined in paragraphs (I)(3)(a),
(I)(3)(c), (I)(3)(e) and (I)(3)(f) of this rule, respectively. Effective
January 1, 2020, the standardized benefit plans described in paragraph
(L)(1)(d) of the rule (redesignated plan G high deductible) may be offered to
any individual who was eligible for medicare prior to January 1,
2020.
(h) Standardized medicare supplement plan "K" is
mandated by the "Medicare Prescription Drug, Improvement and Modernization
Act of 2003," and shall include only the following:
(i) "Part A"
hospital coinsurance, sixty-first through ninetieth days: coverage of one
hundred per cent of the "Part A" hospital coinsurance amount for each
day used from the sixty-first through the ninetieth day in any medicare benefit
period;
(ii) "Part A"
hospital coinsurance, ninety-first through one hundred fiftieth days: coverage
of one hundred per cent of the "Part A" hospital coinsurance amount
for each medicare lifetime inpatient reserve day used from the ninety-first
through the one hundred fiftieth day in any medicare benefit
period;
(iii) "Part A"
hospitalization after lifetime reserve days are exhausted: Upon exhaustion of
the medicare hospital inpatient coverage, including the lifetime reserve days,
coverage of one hundred per cent of the medicare "Part A" eligible
expenses for hospitalization paid at the applicable prospective payment system
("PPS") rate, or other appropriate medicare standard of payment,
subject to a lifetime maximum benefit of an additional three hundred sixty-five
days. The provider shall accept the issuer's payment as payment in full
and may not bill the insured for any balance;
(iv) Medicare "Part
A" deductible: coverage for fifty per cent of the medicare "Part
A" inpatient hospital deductible amount per benefit period until the
out-of-pocket limitation is met as described in paragraph (K)(6)(h)(x) of this
rule.
(v) Skilled nursing
facility care: coverage for fifty per cent of the coinsurance amount for each
day used from the twenty-first day through the one hundredth day in a medicare
benefit period for post-hospital skilled nursing facility care eligible under
medicare "Part A" until the out-of-pocket limitation is met as
described in paragraph (K)(6)(h)(x) of this rule.
(vi) Hospice care:
coverage for fifty per cent of cost sharing for all "Part A" medicare
eligible expenses and respite care until the out-of-pocket limitation is met as
described in paragraph (K)(6)(h)(x) of this rule.
(vii) Blood: coverage for
fifty per cent, under medicare "Part A" or "B," of the
reasonable cost of the first three pints of blood (or equivalent quantities of
packed red blood cells, as defined under federal regulations) unless replaced
in accordance with federal regulations until the out-of-pocket limitation is
met as described paragraph (K)(6)(h)(x) of this rule.
(viii) "Part B"
cost sharing: except for coverage provided in paragraph (K)(6)(h)(ix) of this
rule, coverage for fifty per cent of the cost sharing otherwise applicable
under medicare "Part B" after the policyholder pays the deductible
until the out-of-pocket limitation is met as described in paragraph
(K)(6)(h)(x) of this rule.
(ix) "Part B"
preventive services: coverage of one hundred per cent of the cost sharing for
medicare "Part B" preventive services after the policyholder pays the
"Part B" deductible; and
(x) Cost sharing after
out-of-pocket limits: coverage of one hundred per cent of all cost sharing
under medicare "Parts A" and "B" for the balance of the
calendar year after the individual has reached the out-of-pocket limitation on
annual expenditures under medicare "Parts A" and "B" of
four thousand dollars in 2006, indexed each year by the appropriate inflation
adjustment specified by the secretary of the "United States"
department of health and human services.
(i) Standardized medicare supplement plan "L" is
mandated by the "Medicare Prescription Drug, Improvement and Modernization
Act of 2003," and shall include only the following:
(i) The benefits
described in paragraphs (K)(6)(h)(i), (K)(6)(h)(ii), (K)(6)(h)(iii) and
(K)(6)(h)(ix) of this rule;
(ii) The benefit
described in paragraphs (K)(6)(h)(iv), (K)(6)(h)(v), (K)(6)(h)(vi),
(K)(6)(h)(vii) and (K)(6)(h)(viii) of this rule, but substituting seventy-five
per cent for fifty per cent; and
(iii) The benefit
described in paragraph (K)(6)(h)(x) of this rule, but substituting two thousand
dollars for four thousand dollars.
(j) Standardized medicare supplement plan "M" shall
include only the following: the basic (core) benefit as defined in paragraph
(I)(2) of this rule, plus fifty per cent of the medicare "Part A"
deductible, skilled nursing facility care, and medically necessary emergency
care in a foreign country as defined in paragraphs (I)(3)(b), (I)(3)(c) and
(I)(3)(f) of this rule, respectively.
(k) Standardized medicare supplement plan "N" shall
include only the following: the basic (core) benefit as defined in paragraph
(I)(2) of this rule, plus one hundred per cent of the medicare "Part
A" deductible, skilled nursing facility care, and medically necessary
emergency care in a foreign country as defined in paragraphs (I)(3)(a),
(I)(3)(c) and (I)(3)(f) of this rule, respectively, with copayments in the
following amounts:
(i) The lesser of twenty
dollars or the medicare "Part B" coinsurance or copayment for each
covered health care provider office visit (including visits to medical
specialists); and
(ii) The lesser of fifty
dollars or the medicare "Part B" coinsurance or copayment for each
covered emergency room visit, however, this copayment shall be waived if the
insured is admitted to any hospital and the emergency visit is subsequently
covered as a medicare "Part A" expense.
(7) New or innovative
benefits: an issuer may, with the prior approval of the superintendent, offer
policies or certificates with new or innovative benefits, in addition to the
standardized benefits provided in a policy or certificate that otherwise
complies with the applicable standards. The new or innovative benefits shall
include only benefits that are appropriate to medicare supplement insurance,
are new or innovative, are not otherwise available, and are cost effective.
Approval of new or innovative benefits must not adversely impact the goal of
medicare supplement simplification. New or innovative benefits shall not
include an outpatient prescription drug benefit. New or innovative benefits
shall not be used to change or reduce benefits, including a change of any
cost-sharing provision, in any standardized plan.
(L) Standard medicare supplement benefit
plans for year 2020 standardized medicare supplement benefit plan policies or
certificates issued for delivery to individuals newly eligible for medicare on
or after January 1, 2020.
The "Medicare Access and CHIP
Reauthorization Act" of 2015 (MACRA) requires the following standards are
applicable to all medicare supplement policies or certificates delivered or
issued for delivery in this state to individuals newly eligible for medicare on
or after January 1, 2020. No policy or certificate that provides coverage of
the medicare "Part B" deductible may be advertised, solicited,
delivered or issued for delivery in this state as a medicare supplement policy
or certificate to individuals newly eligible for medicare on or after January
1, 2020. All policies must comply with the following benefit standards. Benefit
plan standards applicable to medicare supplement policies and certificates
issued to individuals eligible for medicare before January 1, 2020, remain
subject to the requirements of paragraph (K) of this rule.
(1) Benefit requirements.
The standards and requirements of paragraph (K) of this rule shall apply to all
medicare supplement policies or certificates delivered or issued for delivery
to individuals newly eligible for medicare on or after January 1, 2020, with
the following exceptions:
(a) Standardized medicare supplement benefit plan "C"
is redesignated as plan "D" and shall provide the benefits contained
in paragraph (K)(6)(c) of this rule but shall not provide coverage for one
hundred per cent or any portion of the medicare "Part B"
deductible.
(b) Standardized medicare supplement benefit plan "F"
is redesignated as plan "G" and shall provide the benefits contained
in paragraph (K)(6)(e) of this rule but shall not provide coverage for one
hundred per cent or any portion of the medicare "Part B"
deductible.
(c) Standardized medicare supplement benefit plans "C,"
"F," and "F with High Deductible" may not be offered to
individuals newly eligible for medicare on or after January 1,
2020.
(d) Standardized medicare supplement benefit "Plan F With
High Deductible" is redesignated as "Plan G With High
Deductible" and shall provide the benefits contained in paragraph
(K)(6)(f) of this rule but shall not provide coverage for one hundred per cent
or any portion of the medicare "Part B" deductible; provided further
that, the medicare "Part B" deductible paid by the beneficiary shall
be considered an out-of-pocket expense in meeting the annual high
deductible.
(e) The reference to plan "C" or "F"
contained in paragraph (K)(2) of this rule is deemed a reference to plan
"D" or "G" for purposes of paragraph (L) of this
rule.
(2) Applicability to
certain individuals. Paragraph (L) of this rule, applies to only individuals
that are newly eligible for medicare on or after January 1, 2020.
(a) By reason of attaining age sixty-five on or after January 1,
2020; or
(b) By reason of entitlement to benefits under part A pursuant to
section 226(b) or 226A of the "Social Security Act," or who is deemed
to be eligible for benefits under section 226(a) of the "Social Security
Act" on or after January 1, 2020.
(3) Guaranteed issue for
eligible persons. For purposes of paragraph (O)(5) of this rule, in the case of
any individual newly eligible for medicare on or after January 1, 2020, any
reference to a medicare supplement policy "C" or "F"
(including "F With High Deductible") shall be deemed to be a
reference to medicare supplement policy "D" or "G"
(including "G With High Deductible"), respectively, that meet the
requirements of paragraph (L)(1) of this rule.
(4) Offer of redesignated
plans to individuals other than newly eligible. On or after January 1, 2020,
the standardized benefit plans described in paragraph (L)(1)(d) of this rule,
may be offered to any individual who was eligible for medicare prior to January
1, 2020, in addition to the standardized plans described in paragraph (K)(6) of
this rule.
(M) Medicare select policies and certificates, as defined in this
paragraph.
(1)
(a) This paragraph shall apply to medicare select policies and
certificates, as defined in this paragraph.
(b) No policy or certificate may be advertised as a medicare
select policy or certificate unless it meets the requirements of this
paragraph.
(2) For the purposes of
this paragraph:
(a) "Complaint" means any dissatisfaction expressed by
an individual concerning a medicare select issuer or its network
providers.
(b) "Grievance" means dissatisfaction expressed in
writing by an individual insured under a medicare select policy or certificate
with the administration, claims practices, or provision of services concerning
a medicare select issuer or its network providers.
(c) "Medicare select issuer" means an issuer offering,
or seeking to offer, a medicare select policy or certificate.
(d) "Medicare select policy" or "medicare select
certificate" mean respectively a medicare supplement policy or certificate
that contains restricted network provisions.
(e) "Network provider" means a provider of health care,
or a group of providers of health care, which has entered into a written
agreement with the issuer to provide benefits insured under a medicare select
policy.
(f) "Restricted network provision" means any provision
which conditions the payment of benefits, in whole or in part, on the use of
network providers.
(g) "Service area" means the geographic area approved
by the superintendent within which an issuer is authorized to offer a medicare
select policy.
(3) The superintendent
may authorize an issuer to offer a medicare select policy or certificate,
pursuant to this paragraph and section 4358 of the "Omnibus Budget
Reconciliation Act (OBRA)" of 1990 if the superintendent finds that the
issuer has satisfied all of the requirements of this rule.
(4) A medicare select
issuer shall not issue a medicare select policy or certificate in this state
until its plan of operation has been approved by the
superintendent.
(5) A medicare select
issuer shall file a proposed plan of operation with the superintendent in a
format prescribed by the superintendent. The plan of operation shall contain at
least the following information:
(a) Evidence that all covered services that are subject to
restricted network provisions are available and accessible through network
providers, including a demonstration that:
(i) Services can be
provided by network providers with reasonable promptness with respect to
geographic location, hours of operation and after-hour care. The hours of
operation and availability of after-hour care shall reflect usual practice in
the local area. Geographic availability shall reflect the usual travel times
within the community.
(ii) The number of
network providers in the service area is sufficient, with respect to current
and expected policyholders, either:
(a) To deliver adequately
all services that are subject to a restricted network provision;
or
(b) To make appropriate
referrals.
(iii) There are written
agreements with network providers describing specific
responsibilities.
(iv) Emergency care is
available twenty-four hours per day and seven days per week.
(v) In the case of
covered services that are subject to a restricted network provision and are
provided on a prepaid basis, there are written agreements with network
providers prohibiting the providers from billing or otherwise seeking
reimbursement from or recourse against any individual insured under a medicare
select policy or certificate. This paragraph shall not apply to supplemental
charges or coinsurance amounts as stated in the medicare select policy or
certificate.
(b) A statement or map providing a clear description of the
service area.
(c) A description of the grievance procedure to be
utilized.
(d) A description of the quality assurance program,
including:
(i) The formal
organizational structure;
(ii) The written criteria
for selection, retention and removal of network providers; and
(iii) The procedures for
evaluating quality of care provided by network providers, and the process to
initiate corrective action when warranted.
(e) A list and description, by specialty, of the network
providers.
(f) Copies of the written information proposed to be used by the
issuer to comply with paragraph (M)(9) of this rule.
(g) Any other information requested by the
superintendent.
(6)
(a) A medicare select issuer shall file any proposed changes to
the plan of operation, except for changes to the list of network providers,
with the superintendent prior to implementing such changes. Such changes shall
be considered approved by the superintendent after thirty days unless
specifically disapproved.
(b) An updated list of network providers shall be filed with the
superintendent at least quarterly.
(7) A medicare select
policy or certificate shall not restrict payment for covered services provided
by non-network providers if:
(a) The services are for symptoms requiring emergency care or are
immediately required for an unforeseen illness, injury or a condition;
and
(b) It is not reasonable to obtain such services through a
network provider.
(8) A medicare select
policy or certificate shall provide payment for full coverage under the policy
for covered services that are not available through network
providers.
(9) A medicare select
issuer shall make full and fair disclosure in writing of the provisions,
restrictions, and limitations of the medicare select policy or certificate to
each applicant. This disclosure shall include at least the
following:
(a) An outline of coverage as required by paragraph (T)(4)(c) of
this rule, in the form prescribed in appendix C to this rule sufficient to
permit the applicant to compare coverage and premiums of the medicare select
policy or certificate with:
(i) Other medicare
supplement policies or certificates offered by the issuer; and
(ii) Other medicare
select policies or certificates.
(b) A description (including address, phone number and hours of
operation) of the network providers, including primary care physicians,
specialty physicians, hospitals, and other providers.
(c) A description of the restricted network provisions, including
payments for coinsurance and deductibles when providers other than network
providers are utilized. Except to the extent specified in the policy or
certificate, expenses incurred when using out-of-network providers do not count
toward the out-of-pocket annual limit contained in plans "K" and
"L".
(d) A description of coverage for emergency and urgently needed
care and other out-of-service area coverage.
(e) A description of limitations on referrals to restricted
network providers and to other providers.
(f) A description of the policyholder's right to purchase
any other medicare supplement policy or certificate otherwise offered by the
issuer.
(g) A description of the medicare select issuer's quality
assurance program and grievance procedure.
(10) Prior to the sale of
a medicare select policy or certificate, a medicare select issuer shall obtain
from the applicant a signed and dated form stating that the applicant has
received the information provided pursuant to paragraph (M)(9) of this rule and
that the applicant understands the restrictions of the medicare select policy
or certificate.
(11) A medicare select
issuer shall have and use procedures for hearing complaints and resolving
written grievances from the subscribers. Such procedures shall be aimed at
mutual agreement for settlement and may include arbitration
procedures.
(a) The grievance procedure shall be described in the policy and
certificates and in the outline of coverage.
(b) At the time the policy or certificate is issued, the issuer
shall provide detailed information to the policyholder describing how a
grievance may be registered with the issuer.
(c) Grievances shall be considered in a timely manner and shall
be transmitted to appropriate decision-makers who have authority to fully
investigate the issue and take corrective action.
(d) If a grievance is found to be valid, corrective action shall
be taken promptly.
(e) All concerned parties shall be notified about the results of
a grievance.
(f) The issuer shall report no later than each March thirty-first
to the superintendent regarding its grievance procedure. The report shall be in
a format prescribed by the superintendent and shall contain the number of
grievances filed in the past year and a summary of the subject, nature and
resolution of such grievances.
(12) At the time of
initial purchase, a medicare select issuer shall make available to each
applicant for a medicare select policy or certificate the opportunity to
purchase any medicare supplement policy or certificate otherwise offered by the
issuer.
(13)
(a) At the request of an individual insured under a medicare
select policy or certificate, a medicare select issuer shall make available to
the individual insured the opportunity to purchase a medicare supplement policy
or certificate offered by the issuer which has comparable or lesser benefits
and which does not contain a restricted network provision. The issuer shall
make such policies or certificates available without requiring evidence of
insurability after the medicare select policy or certificate has been in force
for six months.
(b) For the purposes of paragraph (M)(13) of this rule, a
medicare supplement policy or certificate will be considered to have comparable
or lesser benefits unless it contains one or more significant benefits not
included in the medicare select policy or certificate being replaced. For the
purposes of this paragraph, a significant benefit means coverage for the
medicare "Part A" deductible, coverage for at-home recovery services
or coverage for "Part B" excess charges.
(14) Medicare select
policies and certificates shall provide for continuation of coverage in the
event the secretary of health and human services determines that medicare
select policies and certificates issued pursuant to this paragraph should be
discontinued due to either the failure of the medicare select program to be
reauthorized under law or its substantial amendment.
(a) Each medicare select issuer shall make available to each
individual insured under a medicare select policy or certificate the
opportunity to purchase any medicare supplement policy or certificate offered
by the issuer which has comparable or lesser benefits and which does not
contain a restricted network provision. The issuer shall make such policies and
certificates available without requiring evidence of insurability.
(b) For the purposes of paragraph (M)(14) of this rule, a
medicare supplement policy or certificate will be considered to have comparable
or lesser benefits unless it contains one or more significant benefits not
included in the medicare select policy or certificate being replaced. For the
purposes of this paragraph, a significant benefit means coverage for the
medicare "Part A" deductible, coverage for at-home recovery services
or coverage for "Part B" excess charges.
(15) A medicare select
issuer shall comply with reasonable requests for data made by state or federal
agencies, including the "United States" department of health and
human services, for the purpose of evaluating the medicare select
program.
(N) Open enrollment
(1) An issuer shall not
deny or condition the issuance or effectiveness of any medicare supplement
policy or certificate available for sale in this state, nor discriminate in the
pricing of a policy or certificate because of the health status (including
tobacco or nicotine usage), claims experience, receipt of health care, or
medical condition of an applicant in the case of an application for a policy or
certificate that is submitted prior to or during the six month period beginning
with the first day of the first month in which an individual is both sixty-five
years of age or older and is enrolled for benefits under medicare "Part
B." Each medicare supplement policy and certificate currently available
from an issuer shall be made available to all applicants who qualify under
paragraph (N)(1) of this rule without regard to age.
(2)
(a) If an applicant qualifies under paragraph (N)(1) of this rule
and submits an application during the time period referenced in paragraph
(N)(1) of this rule and, as of the date of application, has had a continuous
period of creditable coverage of at least six months, the issuer shall not
exclude benefits based on a preexisting condition.
(b) If the applicant qualifies under paragraph (N)(1) of this
rule and submits an application during the time period referenced in paragraph
(N)(1) of this rule and, as of the date of application, has had a continuous
period of creditable coverage that is less than six months, the issuer shall
reduce the period of any preexisting condition exclusion by the aggregate of
the period of creditable coverage applicable to the applicant as of the
enrollment date. The secretary shall specify the manner of the reduction under
this paragraph.
(3) Except as provided in
paragraphs (N)(2), (O), and (Z) of this rule, paragraph (N)(1) of this rule
shall not be construed as preventing the exclusion of benefits under a policy,
during the first six months, based on a preexisting condition for which the
policyholder or certificate holder received treatment or was otherwise
diagnosed during the six months before the coverage became
effective.
(4) In connection with
the solicitation or sale of a medicare supplement policy or certificate to
persons who qualify under paragraph (N)(1) of this rule, no issuer
shall:
(a) Engage in any act or practice with the intent or effect of
restricting the sale to or discouraging the purchase by persons eligible for
open enrollment of any medicare supplement policy or certificate available in
this state. Such acts or practices include but are not limited to the
following:
(i) Creating a
disincentive for producers to sell medicare supplement policies or certificates
during the open enrollment period through compensation arrangements that reduce
or eliminate compensation for sales made to persons eligible for open
enrollment;
(ii) Applying waiting
periods for coverage of pre-existing conditions as described in paragraph
(N)(2) of this rule only to policies or certificates issued to persons eligible
for open enrollment;
(iii) Engaging in premium
rating practices which result in premiums which are higher for persons eligible
for open enrollment than premiums for persons not eligible for open
enrollment;
(iv) Failing to offer to
persons eligible for open enrollment any medicare supplement policy or
certificate which is available for purchase from the issuer in this
state.
(O) Guaranteed issue for eligible persons
(1) Guaranteed
issue
(a) Eligible persons are those individuals described in paragraph
(O)(2) of this rule who seek to enroll under the policy during the period
specified in paragraph (O)(2) of this rule and who submit evidence of the date
of termination, disenrollment, or medicare "Part D" enrollment with
the application for a medicare supplement policy.
(b) With respect to eligible persons, an issuer shall not deny or
condition the issuance or effectiveness of a medicare supplement policy
described in paragraph (O)(5) of this rule that is offered and is available for
issuance to new enrollees by the issuer, shall not discriminate in the pricing
of such a medicare supplement policy because of health status (including
tobacco or nicotine usage), claims experience, receipt of health care, or
medical condition, and shall not impose an exclusion of benefits based on a
preexisting condition under such a medicare supplement policy.
(2) Eligible
persons
An eligible person is an individual described
in any of the following paragraphs:
(a) The individual is enrolled under an employee welfare benefit
plan, or a state medicaid plan as described in Title XIX of the Social Security
Act that provides health benefits that supplement the benefits under medicare,
and the plan terminates, or the plan ceases to provide all such supplemental
health benefits to the individual; or the individual is enrolled under an
employee welfare benefit plan that is primary to medicare and the plan
terminates or the plan ceases to provide all health benefits to the individual
because the individual leaves the plan;
(b)
(i) The individual is
enrolled with a "Medicare Advantage" organization under a
"Medicare Advantage" plan under "Part C" of medicare, and
any of the following circumstances apply, or the individual is sixty-five years
of age or older and is enrolled with a "Program of All-Inclusive Care for
the Elderly (PACE)" provider under section 1894 of the "Social
Security Act", and there are circumstances similar to those described
below that would permit discontinuance of the individual's enrollment with
such provider if such individual were enrolled in a "Medicare
Advantage" plan:
(a) The certification of
the organization or plan under this part has been terminated; or
(b) The organization has
terminated or otherwise discontinued providing the plan in the area in which
the individual resides;
(c) The individual is no
longer eligible to elect the plan because of a change in the individual's
place of residence or other change in circumstances specified by the secretary,
but not including termination of the individual's enrollment on the basis
described in section 1851(g)(3)(B) of the federal "Social Security
Act" (where the individual has not paid premiums on a timely basis or has
engaged in disruptive behavior as specified in standards under section 1856),
or the plan is terminated for all individuals within a residence
area;
(d) The individual
demonstrates, in accordance with guidelines established by the secretary,
that:
(i) The organization
offering the plan substantially violated a material provision of the
organization's contract under this part in relation to the individual,
including the failure to provide an enrollee on a timely basis medically
necessary care for which benefits are available under the plan or the failure
to provide such covered care in accordance with applicable quality standards;
or
(ii) The organization, or
agent or other entity acting on the organization's behalf, materially
misrepresented the plan's provisions in marketing the plan to the
individual; or
(e) The individual meets
such other exceptional conditions as the secretary may provide.
(c)
(i) The individual is
enrolled with:
(a) An eligible
organization under a contract under section 1876 of the "Social Security
Act" (medicare cost);
(b) A similar
organization operating under demonstration project authority, effective for
periods before April 1, 1999;
(c) An organization under
an agreement under section 1833(a)(1)(A) of the "Social Security Act"
(health care prepayment plan); or
(d) An organization under
a medicare select policy; and
(ii) The enrollment
ceases under the same circumstances that would permit discontinuance of an
individual's election of coverage under paragraph (O)(2)(b) of this
rule.
(d) The individual is enrolled under a medicare supplement policy
and the enrollment ceases because:
(i)
(a) Of the insolvency of
the issuer or bankruptcy of the nonissuer organization; or
(b) Of other involuntary
termination of coverage or enrollment under the policy;
(ii) The issuer of the
policy substantially violated a material provision of the policy;
or
(iii) The issuer, or an
agent or other entity acting on the issuer's behalf, materially
misrepresented the policy's provisions in marketing the policy to the
individual;
(e)
(i) The individual was
enrolled under a medicare supplement policy and terminates enrollment and
subsequently enrolls, for the first time, with any "Medicare
Advantage" organization under a "Medicare Advantage" plan under
"Part C" of medicare, any eligible organization under a contract
under section 1876 of the "Social Security Act" (medicare risk or
cost), any similar organization operating under demonstration project
authority, any "PACE" program under section 1894 of the "Social
Security Act," or a medicare select policy; and
(ii) The subsequent
enrollment under paragraph (O)(2)(e)(i) of this rule is terminated by the
enrollee during any period within the first twelve months of such subsequent
enrollment (during which the enrollee is permitted to terminate such subsequent
enrollment under section 1851(e) of the "Social Security Act");
or
(f) The individual, upon first becoming eligible for medicare
"Part A" for benefits at age sixty-five or older, enrolls in a
"Medicare Advantage" plan under "Part C" of medicare, or
with a "PACE" provider under section 1894 of the "Social
Security Act," and disenrolls from the plan or program by not later than
twelve months after the effective date of enrollment.
(g) The individual enrolls in a medicare "Part D" plan
during the initial enrollment period and, at the time of enrollment in
"Part D," was enrolled under a medicare supplement policy that covers
outpatient prescription drugs and the individual terminates enrollment in the
medicare supplement policy and submits evidence of enrollment in medicare
"Part D" along with the application for a policy described in
paragraph (O)(5)(d) of this rule.
(3) Guaranteed issue time
periods
(a) In the case of an individual described in paragraph (O)(2)(a)
of this rule, the guaranteed issue period begins on the later of:
(i) The date the
individual receives a notice of termination or cessation of all supplemental
health benefits (or, if a notice is not received, notice that a claim has been
denied because of a termination or cessation); or
(ii) The date that the
applicable coverage terminates or ceases; and ends sixty-three days
thereafter;
(b) In the case of an individual described in paragraph
(O)(2)(b), (O)(2)(c), (O)(2)(e), or (O)(2)(f) of this rule whose enrollment
terminated involuntarily, the guaranteed issue period begins on the date that
the individual receives a notice of termination and ends sixty-three days after
the date the applicable coverage is terminated;
(c) In the case of an individual described in paragraph
(O)(2)(d)(i) of this rule, the guaranteed issue period begins on the earlier
of:
(i) The date that the
individual receives a notice of termination, a notice of the issuer's
bankruptcy or insolvency, or other such similar notice if any; and
(ii) The date that the
applicable coverage is terminated, and ends on the date that is sixty-three
days after the date the coverage is terminated;
(d) In the case of an individual described in paragraph
(O)(2)(b), (O)(2)(d)(ii), (O)(2)(d)(iii), (O)(2)(e), or (O)(2)(f) of this rule,
who disenrolls voluntarily, the guaranteed issue period begins on the date that
is sixty days before the effective date of the disenrollment and ends on the
date that is sixty-three days after the effective date;
(e) In the case of an individual described in paragraph (O)(2)(g)
of this rule, the guaranteed issue period begins on the date the individual
receives notice pursuant to section 1882(v)(2)(B) of the "Social Security
Act" from the medicare supplement issuer during the sixty-day period
immediately preceding the initial "Part D" enrollment period and ends
on the date that is sixty-three days after the effective date of the
individual's coverage under medicare "Part D"; and
(f) In the case of an individual described in paragraph (O)(2) of
this rule but not described in the preceding provisions of this paragraph, the
guaranteed issue period begins on the effective date of disenrollment and ends
on the date that is sixty-three days after the effective date.
(4) Extended medigap
access for interrupted trial periods
(a) In the case of an individual described in paragraph (O)(2)(e)
of this rule (or deemed to be so described, pursuant to this paragraph) whose
enrollment with an organization or provider described in paragraph (O)(2)(e)(i)
of this rule is involuntarily terminated within the first twelve months of
enrollment, and who, without an intervening enrollment, enrolls with another
such organization or provider, the subsequent enrollment shall be deemed to be
an initial enrollment described in paragraph (O)(2)(e) of this
rule;
(b) In the case of an individual described in paragraph (O)(2)(f)
of this rule, (or deemed to be so described, pursuant to this paragraph) whose
enrollment with a plan or in a program described in paragraph (O)(2)(f) of this
rule is involuntarily terminated within the first twelve months of enrollment,
and who, without an intervening enrollment, enrolls in another such plan or
program, the subsequent enrollment shall be deemed to be an initial enrollment
described in paragraph (O)(2)(f) of this rule; and
(c) For the purposes of paragraphs (O)(2)(e) and (O)(2)(f) of
this rule, no enrollment of an individual with an organization or provider
described in paragraph (O)(2)(e)(i) of this rule, or with a plan or in a
program described in paragraph (O)(2)(f) of this rule, may be deemed to be an
initial enrollment under this paragraph after the two-year period beginning on
the date on which the individual first enrolled with such an organization,
provider, plan or program.
(5) Products to which
eligible persons are entitled
The medicare supplement policy to which
eligible persons are entitled under:
(a) Paragraphs (O)(2)(a), (O)(2)(b), (O)(2)(c), and (O)(2)(d) of
this rule is a medicare supplement policy which has a benefit package
classified as plan "A," "B," "C," "F"
(including "F" with a high deductible), "K" or
"L" offered by any issuer.
(b)
(i) Subject to paragraph
(O)(5)(b)(ii) of this rule, paragraph (O)(2)(e) of this rule is the same
medicare supplement policy in which the individual was most recently previously
enrolled, if available from the same issuer, or, if not so available, a policy
described in paragraph (O)(5)(a) of this rule;
(ii) After December 31,
2005, if the individual was most recently enrolled in a medicare supplement
policy with an outpatient prescription drug benefit, a medicare supplement
policy described in this paragraph is:
(a) The policy available
from the same issue but modified to remove outpatient prescription drug
coverage; or
(b) At the election of
the policyholder, an "A," "B," "C," "F"
(including "F" with a high deductible), "K" or
"L" policy that is offered by any issuer;
(c) Paragraph (O)(2)(f) of this rule shall include any medicare
supplement policy offered by any issuer;
(d) Paragraph (O)(2)(g) of this rule is a medicare supplement
policy that has a benefit package classified as Plan "A,"
"B," "C," "F" (including "F" with a
high deductible), "K" or "L," and that is offered and is
available for issuance to new enrollees by the same issuer that issued the
individual's medicare supplement policy with outpatient prescription drug
coverage.
(6) Notification
provisions
(a) At the time of an event described in paragraph (O)(2) of this
rule because of which an individual loses coverage or benefits due to the
termination of a contract or agreement, policy, or plan, the organization that
terminates the contract or agreement, the issuer terminating the policy, or the
administrator of the plan being terminated, respectively, shall notify the
individual of his or her rights under paragraph (O) of this rule, and of the
obligations of issuers of medicare supplement policies under paragraph (O)(1)
of this rule. Such notice shall be communicated contemporaneously with the
notification of termination.
(b) At the time of an event described in paragraph (O)(2) of this
rule because of which an individual ceases enrollment under a contract or
agreement, policy, or plan, the organization that offers the contract or
agreement, regardless of the basis for the cessation of enrollment, the issuer
offering the policy, or the administrator of the plan, respectively, shall
notify the individual of his or her rights under paragraph (O) of this rule,
and of the obligations of issuers of medicare supplement policies under
paragraph (O)(1) of this rule. Such notice shall be communicated within ten
working days of the issuer receiving notification of
disenrollment.
(P) Standards for claims payment
(1) An issuer shall
comply with section 1882(C)(3) of the "Social Security Act" (as
enacted by section 4081 (B)(2)(C) of the "Omnibus Budget Reconciliation
Act of 1987" (OBRA '87), Pub. L. No. 100-203) by:
(a) Accepting a notice from a medicare carrier on dually assigned
claims submitted by participating physicians and suppliers as a claim for
benefits in place of any other claim form otherwise required and making a
payment determination on the basis of the information contained in that
notice;
(b) Notifying the participating physician or supplier and the
beneficiary of the payment determination;
(c) Paying the participating physician or supplier
directly;
(d) Furnishing, at the time of enrollment, each enrollee with a
card listing the policy name, number, and a central mailing address to which
notices from a medicare carrier may be sent;
(e) Paying user fees for claim notices that are transmitted
electronically or otherwise; and
(f) Providing to the secretary of health and human services, at
least annually, a central mailing address to which all claims may be sent by
medicare carriers.
(2) Compliance with the
requirements set forth in paragraph (P)(1) of this rule shall be certified on
the medicare supplement insurance experience reporting form.
(Q) Loss ratio standards and refund or credit of
premium
(1) Loss ratio
standards
(a)
(i) A medicare supplement
policy form or certificate form shall not be delivered or issued for delivery
unless the policy form or certificate form can be expected, as estimated for
the entire period for which rates are computed to provide coverage, to return
to policyholders and certificate holders in the form of aggregate benefits (not
including anticipated refunds or credits) provided under the policy form or
certificate form:
(a) At least seventy-five
per cent of the aggregate amount of premiums earned in the case of group
policies; or
(b) At least sixty-five
per cent of the aggregate amount of premiums earned in the case of individual
policies;
(ii) Calculated on the
basis of incurred claims experience or incurred health care expenses where
coverage is provided by a health insuring corporation on a service rather than
reimbursement basis and earned premiums for such period and in accordance with
accepted actuarial principles and practices. Incurred health care expenses
where coverage is provided by a health insuring corporation shall not
include:
(a) Home office and
overhead costs;
(b) Advertising
costs;
(c) Commissions and other
acquisition costs;
(d) Taxes;
(e) Capital
costs;
(f) Administrative costs;
and
(g) Claims processing
costs.
(b) All filings of rates and rating schedules shall demonstrate
that expected claims in relation to premiums comply with the requirements of
paragraph (Q) of this rule when combined with actual experience to date.
Filings of rate revisions shall also demonstrate that the anticipated loss
ratio over the entire future period for which the revised rates are computed to
provide coverage can be expected to meet the appropriate loss ratio
standards.
(c) For policies issued prior to May 1, 1992, expected claims in
relation to premiums shall meet:
(i) The originally filed
anticipated loss ratio when combined with the actual experience since
inception;
(ii) The appropriate loss
ratio requirement from paragraphs (Q)(1)(a)(i)(a) and (Q)(1)(a)(i)(b) of this
rule when combined with actual experience beginning January 1, 1996 to date;
and
(iii) The appropriate
loss ratio requirement from paragraphs (Q)(1)(a)(i)(a) and (Q)(1)(a)(i)(b) of
this rule over the entire future period for which the rates are computed to
provide coverage.
(d) In meeting the tests in paragraphs (Q)(1)(c)(i),
(Q)(1)(c)(ii), and (Q)(1)(c)(iii) of this rule and for purposes of attaining
credibility, an issuer may combine experience under policy forms which provide
substantially similar coverage. Once a combined form is adopted, the issuer may
not separate the experience except with the approval of the
superintendent.
(2) Refund or credit
calculation
(a) An issuer shall collect and file with the superintendent by
May thirty-first of each year the data contained in the applicable reporting
form contained in appendix A to this rule for each type in a standard medicare
supplement benefit plan.
(b) If on the basis of the experience as reported, the benchmark
ratio since inception (ratio one) exceeds the adjusted experience ratio since
inception (ratio three), then a refund or credit calculation is required. The
refund calculation shall be done on a statewide basis for each type in a
standard medicare supplement benefit plan. For purposes of the refund or credit
calculation, experience on policies issued within the reporting year shall be
excluded.
(c) For the purposes of this paragraph, policies or certificates
issued prior to May 1, 1992, the issuer shall make the refund or credit
calculation separately for all individual policies (including all group
policies subject to an individual loss ratio standard when issued) combined and
all other group policies combined for experience after the effective date of
this amendment. The first such report shall be due by May 31,
1998.
(d) A refund or credit shall be made only when the benchmark loss
ratio exceeds the adjusted experience loss ratio and the amount to be refunded
or credited exceeds a de minimis level. The refund shall include interest from
the end of the calendar year to the date of the refund or credit at a rate
specified by the secretary of health and human services, but in no event shall
it be less than the average rate of interest for thirteen-week treasury notes.
A refund or credit against premiums due shall be made by September thirtieth
following the experience year upon which the refund or credit is
based.
(3) Annual filing of
premium rates
(a) An issuer of medicare supplement policies and certificates
issued before or after the effective date of this rule in this state shall file
annually its rates, rating schedule and supporting documentation including
ratios of incurred losses to earned premiums by policy duration for approval by
the superintendent in accordance with the filing requirements and procedures
prescribed by the superintendent. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice using reasonable
assumptions that the appropriate loss ratio standards can be expected to be met
over the entire period for which rates are computed. Such demonstration shall
exclude active life reserves. An expected third-year loss ratio which is
greater than or equal to the applicable percentage shall be demonstrated for
policies or certificates in force less than three years.
(b) As soon as practicable, but prior to the effective date of
enhancements in medicare benefits, every issuer of medicare supplement policies
or certificates in this state shall file with the superintendent in accordance
with the applicable filing procedures of this state:
(i) Appropriate premium
adjustments necessary to produce loss ratios as anticipated for the current
premium for the applicable policies or certificates. The supporting documents
as necessary to justify the adjustment shall accompany the filing.
(ii) An issuer shall make
premium adjustments necessary to produce an expected loss ratio under the
policy or certificate to conform to minimum loss ratio standards for medicare
supplement policies and which are expected to result in a loss ratio at least
as great as that originally anticipated in the rates used to produce current
premiums by the issuer for the medicare supplement policies or certificates. No
premium adjustments which would modify the loss ratio experience under the
policy other than the adjustments described herein should be made with respect
to a policy at any time other than upon its renewal date or anniversary
date.
(iii) If an issuer fails
to make premium adjustments acceptable to the superintendent, the
superintendent may order premium adjustments, refunds or premium credits deemed
necessary to achieve the loss ratio required by this paragraph.
(c) Any appropriate riders, endorsements or policy forms needed
to accomplish the medicare supplement policy or certificate modifications
necessary to eliminate benefit duplications with medicare. The riders,
endorsements or policy forms shall provide a clear description of the medicare
supplement benefits provided by the policy or certificate.
(4) Public
hearings
The superintendent may conduct a public hearing
to gather information concerning a request by an issuer for an increase in a
rate for a policy form or certificate form issued before or after the effective
date of this rule if the experience of the form for the previous reporting
period is not in compliance with the applicable loss ratio standard. The
determination of compliance is made without consideration of any refund or
credit for such reporting period. Public notice of such hearing shall be
furnished in a manner deemed appropriate by the superintendent.
(R) Filing and approval of policies and certificates and premium
rates
(1) An issuer shall not
deliver or issue for delivery a policy or certificate to a resident of this
state unless the policy form or certificate form has been filed with and
approved by the superintendent in accordance with filing requirements and
procedures prescribed by the superintendent.
(2) An issuer shall file
any riders or amendments to policy or certificate forms to delete outpatient
prescription drug benefits as required by the "Medicare Prescription Drug,
Improvement, and Modernization Act of 2003" only with the superintendent
in the state in which the policy or certificate was issued.
(3) An issuer shall not use or change
premium rates for a medicare supplement policy or certificate unless the rates,
rating schedule and supporting documentation have been filed with and approved
by the superintendent in accordance with the filing requirements and procedures
prescribed by the superintendent. The superintendent shall use the following
process for approving or disapproving proposed premium increases:
(a) As used in paragraph (R)(3) of this rule, "benefits
provided are not unreasonable in relation to the premium charged" means
that the rates were calculated in accordance with sound actuarial
principles.
(b) With respect to any filing of any premium rates for any
individual or group medicare supplement policy, or for any endorsement or rider
pertaining thereto, the superintendent of insurance may, within thirty days
after filing:
(i) Disapprove such
filing if the superintendent finds that the benefits provided are unreasonable
in relation to the premium charged. Such disapproval shall be effected by
written order of the superintendent, a copy of which shall be mailed to the
issuer that has made the filing. In the order, the superintendent shall specify
the reasons for disapproval and state that a hearing will be held within
fifteen days after requested in writing by the issuer. If a hearing is so
requested, the superintendent shall also give such public notice, if
appropriate. The superintendent, within fifteen days after the commencement of
any hearing, shall issue a written order, a copy of which shall be mailed to
the issuer that has made the filing, either affirming the prior disapproval or
approving such filing if it is determined that the benefits provided are not
unreasonable in relation to the premium charged; or
(ii) Set a date for a
public hearing to commence no later than forty days after the filing. The
superintendent shall give the issuer making the filing twenty days'
written notice of the hearing and shall give such public notice as appropriate.
The superintendent, within twenty days after the commencement of a hearing,
shall issue a written order, a copy of which shall be mailed to the issuer that
has made the filing, either approving such filing if it is determined that the
benefits provided are not unreasonable in relation to the premium charged, or
disapproving such filing if it is determined that the benefits provided are
unreasonable in relation to the premium charged; or
(iii) Take no action, in
which case such filing shall be deemed to be approved and shall become
effective upon the thirty-first day after such filing, unless the
superintendent has previously given written approval to the
issuer.
(c) At any time any filing has been approved pursuant to this
section, the superintendent may, after a hearing of which at least twenty
days' written notice has been given to the issuer that has made such
filing and for which such public notice as is appropriate has been given,
withdraw approval of such filing if it is determined that the benefits provided
are unreasonable in relation to the premium charged. Such withdrawal of
approval shall be effected by written order of the superintendent, a copy of
which shall be mailed to the issuer that has made the filing, which shall state
the ground for such withdrawal and the date, not less than forty days after the
date of such order, when the withdrawal or approval shall become
effective.
(d) The superintendent may retain at the issuer's expense
such attorneys, actuaries, accountants, and other experts not otherwise a part
of the superintendent's staff as shall be reasonably necessary to assist
in the preparation for and conduct of any public hearing under this section.
The expense for retaining such experts and the expenses of the department of
insurance incurred in connection with such public hearing shall be assessed
against the issuer in an amount not to exceed one one-hundredth of one per cent
of the sum of premiums earned plus net realized investments gain or loss of
such issuer as reflected in the most current annual statement on file with the
superintendent. Any person retained shall be under the direction and control of
the superintendent and shall act in a purely advisory capacity.
(4)
(a) Except as provided in paragraph (R)(4)(b) of this rule, an
issuer shall not file for approval more than one form of a policy or
certificate of each type for each standard medicare supplement benefit
plan.
(b) An issuer may offer, with the approval of the superintendent,
up to four additional policy forms or certificate forms of the same type for
the same standard medicare supplement benefit plan, one for each of the
following cases:
(i) The inclusion of new
or innovative benefits;
(ii) The addition of
either direct response or agent marketing methods;
(iii) The addition of
either guaranteed issue or underwritten coverage;
(iv) The offering of
coverage to individuals eligible for medicare by reason of
disability.
(c) For the purposes of this paragraph, a "type" means
an individual policy, a group policy, an individual medicare select policy, or
a group medicare select policy.
(5)
(a) Except as provided in paragraph (R)(5)(a)(i) of this rule, an
issuer shall continue to make available for purchase any policy form or
certificate form issued after the effective date of this rule that has been
approved by the superintendent. A policy form or certificate form shall not be
considered to be available for purchase unless the issuer has actively offered
it for sale in the previous twelve months.
(i) An issuer may
discontinue the availability of a policy form or certificate form if the issuer
provides to the superintendent in writing its decision at least thirty days
prior to discontinuing the availability of the form of the policy or
certificate. After receipt of the notice by the superintendent, the issuer
shall no longer offer for sale the policy form or certificate form in this
state.
(ii) An issuer that
discontinues the availability of a policy form or certificate form pursuant to
paragraph (R)(5)(a)(i) of this rule shall not file for approval a new policy
form or certificate form of the same type for the same standard medicare
supplement benefit plan as the discontinued form for a period of five years
after the issuer provides notice to the superintendent of the discontinuance.
The period of discontinuance may be reduced if the superintendent determines
that a shorter period is appropriate.
(b) The sale or other transfer of medicare supplement business to
another issuer shall be considered a discontinuance for the purposes of
paragraph (R)(5) of this rule.
(c) A change in the rating structure or methodology shall be
considered a discontinuance under paragraph (R)(5)(a) of this rule unless the
issuer complies with the following requirements:
(i) The issuer provides
an actuarial memorandum, in a form and manner prescribed by the superintendent,
describing the manner in which the revised rating methodology and resultant
rates differ from the existing rating methodology and existing
rates.
(ii) The issuer does not
subsequently put into effect a change of rates or rating factors that would
cause the percentage differential between the discontinued and subsequent rates
as described in the actuarial memorandum to change. The superintendent may
approve a change to the differential which is in the public
interest.
(6)
(a) Except as provided in paragraph (R)(6)(b) of this rule, the
experience of all policy forms or certificate forms of the same type in a
standard medicare supplement benefit plan shall be combined for purposes of the
refund or credit calculation prescribed in paragraph (Q) of this
rule.
(b) Forms assumed under an assumption reinsurance agreement shall
not be combined with the experience of other forms for purposes of the refund
or credit calculation.
(S) Permitted compensation arrangements
(1) An issuer or other
entity may provide commission or other compensation to an agent or other
representative for the sale of a medicare supplement policy or certificate only
if the first year commission or other first year compensation is no more than
two hundred per cent of the commission or other compensation paid for selling
or servicing the policy or certificate in the second year or
period.
(2) The commission or
other compensation provided in subsequent (renewal) years must be the same as
that provided in the second year or period and must be provided for no fewer
than five renewal years. After the fifth renewal year, any commission or other
compensation provided may be up to that provided in the previous renewal
year.
(3) No issuer or other
entity shall provide compensation to its agents or other producers and no agent
or producer shall receive compensation greater than the renewal compensation
payable by the replacing issuer on renewal policies or certificates if an
existing policy or certificate is replaced.
(4) For purposes of
paragraphs (N) and (S) of this rule, "compensation" includes
pecuniary or non-pecuniary remuneration of any kind relating to the sale or
renewal of the policy or certificate including but not limited to bonuses,
gifts, prizes, awards and finders fees.
(5) No issuer or other
entity shall violate the provisions of paragraph (N)(4) of this
rule.
(T) Required disclosure provisions
(1) General
rules.
(a) Medicare supplement policies and certificates shall include a
renewal or continuation provision. The language or specifications of such
provision shall be consistent with the type of contract issued. The provision
shall be appropriately captioned and shall appear on the first page of the
policy and shall include any reservation by the issuer of the right to change
premiums and any automatic renewal premium increases based on the age of the
policyholder or certificate holder.
(b) All riders or endorsements added to a medicare supplement
policy after date of issue or at reinstatement or renewal which reduce or
eliminate benefits or coverage in the policy shall require a signed acceptance
by the insured, except for riders or endorsements by which the issuer
effectuates a request made in writing by the insured, exercises a specifically
reserved right under a medicare supplement policy other than the right to
reduce or eliminate benefits or coverage, or is required to reduce or eliminate
benefits to avoid duplication of medicare benefits. After the date of policy or
certificate issue, any rider or endorsement which increases benefits or
coverage with a concomitant increase in premium during the policy term shall be
agreed to in writing signed by the insured, unless the benefits are required by
the minimum standards for medicare supplement policies, or if the increased
benefits or coverage is required by law. Where a separate additional premium is
charged for benefits provided in connection with riders or endorsements, the
premium charge shall be set forth in the policy.
(c) Medicare supplement policies or certificates shall not
provide for the payment of benefits based on standards described as "usual
and customary," "reasonable and customary" or words of similar
import.
(d) If a medicare supplement policy or certificate contains any
limitations with respect to preexisting conditions, such limitations shall
appear as a separate paragraph of the policy and be labeled as
"preexisting condition limitations."
(e) Medicare supplement policies and certificates shall have a
notice prominently printed on the first page of the policy or certificate or
attached thereto stating in substance that the policyholder or certificate
holder shall have the right to return the policy or certificate within thirty
days of its delivery and to have the premium refunded if, after examination of
the policy or certificate, the insured person is not satisfied for any
reason.
(f)
(i) Issuers of accident
and sickness policies or certificates which provide hospital or medical expense
coverage on an expense incurred or indemnity basis to a person(s) eligible for
medicare shall provide to those applicants a "Guide to Health Insurance
for People with Medicare" in the form developed jointly by the
"National Association of Insurance Commissioners" and the
"Centers for Medicare and Medicaid Services" ("CMS") and in
a type size no smaller than twelve point type. Delivery of the guide shall be
made whether or not such policies or certificates are advertised, solicited or
issued as medicare supplement policies or certificates as defined in this rule.
Except in the case of direct response issuers, delivery of the guide shall be
made to the applicant at the time of application and acknowledgement of receipt
of the guide shall be obtained by the issuer. Direct response issuers shall
deliver the guide to the applicant upon request but not later than at the time
the policy is delivered.
(ii) For the purposes of
paragraph (T)(1)(f) of this rule, "form" means the language, format,
type size, type proportional spacing, bold character, and line
spacing.
(2) Notice
requirements.
(a) As soon as practicable, but no later than thirty days prior
to the annual effective date of any medicare benefit changes, an issuer shall
notify its policyholders and certificate holders of modifications it has made
to medicare supplement policies or certificates in a format acceptable to the
superintendent. The requirements of this paragraph apply to medicare supplement
policies and certificates delivered or issued for delivery in this state before
or after the effective date of this rule. The notice shall be in twelve point
type in a format acceptable to the superintendent. The notice
shall:
(i) Include a description
of revisions to the medicare program and a description of each modification
made to the coverage provided under the medicare supplement policy or
certificate; and
(ii) Inform each
policyholder or certificate holder as to when any premium adjustment is to be
made due to changes in medicare.
(b) The notice of benefit modifications and any premium
adjustments shall be in outline form and in clear and simple terms so as to
facilitate comprehension.
(c) Such notices shall not contain or be accompanied by any
solicitation.
(3) "MMA"
notice requirements.
Issuers shall comply with any notice
requirements of the "Medicare Prescription Drug, Improvement, and
Modernization Act of 2003."
(4) Outline of coverage requirements for
medicare supplement policies.
(a) Issuers shall provide an outline of coverage to all
applicants at the time application is presented to the prospective applicant
and, except for direct response policies, shall obtain an acknowledgement of
receipt of the outline from the applicant; and
(b) If an outline of coverage is provided at the time of
application and the medicare supplement policy or certificate is issued on a
basis which would necessitate revision of the outline, a substitute outline of
coverage properly describing the policy or certificate shall accompany such
policy or certificate when it is delivered and contain the following statement,
in no less than twelve-point type, immediately above the company
name:
"Notice: read this outline of coverage
carefully. It is not identical to the outline of coverage provided upon
application and the coverage originally applied for has not been
issued."
(c) The outline of coverage provided to applicants pursuant to
paragraph (T) of this rule shall be in the form prescribed in appendix C to
this rule, and consists of four parts: a cover page, premium information,
disclosure pages, and charts displaying the features of each benefit plan
offered by the issuer. The outline of coverage shall be in the language, format
and order prescribed in appendix C to this rule in no less than twelve point
type. All plans shall be shown on the cover page, and the plan(s) that are
offered by the issuer shall be prominently identified. Premium information for
plans that are offered shall be shown on the cover page or immediately
following the cover page and shall be prominently displayed. The premium and
mode shall be stated for all plans that are offered to the prospective
applicant. All possible premiums for the prospective applicant shall be
illustrated.
(Include for each plan prominently identified
in the cover page, a chart showing the services, medicare payments, plan
payments and insured payments for each plan, using the same language, in the
same order, layout, and format as shown in the charts in appendix C to this
rule. No more than four plans may be shown on one chart. For purposes of
illustration, charts for each plan are included in appendix C to this rule. An
issuer may use additional benefit plan designations on these charts pursuant to
paragraphs (J)(4) and (K)(5) of this rule as applicable.)
(Include an explanation of any
smoker/non-smoker rates or household discounts in the premium information and
disclosure pages, in a manner approved by the superintendent.)
(Include an explanation of any innovative
benefits on the cover page and in the chart, in a manner approved by the
superintendent.)
(5) Notice regarding policies or
certificates which are not medicare supplement policies.
(a) Any sickness and accident insurance policy or certificate,
other than a medicare supplement policy or a policy issued pursuant to a
contract under section 1876 of the "Social Security Act" (42 U.S.C.
section 1395, et seq.); disability income policy; or other policy identified in
paragraph (C)(2) of this rule, issued for delivery in this state to persons
eligible for medicare shall notify insureds under the policy that the policy is
not a medicare supplement policy or certificate. The notice shall either be
printed or attached to the first page of the outline of coverage delivered to
insureds under the policy, or if no outline of coverage is delivered, to the
first page of the policy, or certificate delivered to insureds. The notice
shall be in no less than twelve-point type and shall contain the following
language:
"This (policy or certificate) is not a
medicare supplement (policy or certificate). If you are eligible for medicare,
review the "Guide to Health Insurance for People with Medicare"
available from the company."
(b) Applications provided to persons eligible for medicare for
the health insurance policies or certificates described in paragraph (T)(4)(a)
of this rule shall disclose, using the applicable statement in appendix F to
this rule, the extent to which the policy duplicates medicare. The disclosure
statement shall be provided as a part of, or together with, the application for
the policy or certificate.
(U) Requirements for application forms and replacement
coverage
(1) Application forms
shall include the statements and questions in appendix D to this rule designed
to elicit information as to whether, as of the date of the application, the
applicant currently has medicare supplement, "Medicare Advantage",
medicaid coverage, or another health insurance policy or certificate in force
or whether a medicare supplement policy or certificate is intended to replace
any other sickness and accident policy or certificate presently in force. A
supplementary application or other form to be signed by the applicant and
agent, containing such statements and questions may be used.
(2) In the case of a
direct response issuer, a copy of the application or supplemental form, signed
by the applicant, and acknowledged by the issuer, shall be returned to the
applicant by the issuer upon delivery of the policy.
(3) Upon determining that
a sale will involve replacement of medicare supplement coverage, any issuer,
other than a direct response issuer, or its agent, shall furnish the applicant,
prior to issuance or delivery of the medicare supplement policy or certificate,
a notice regarding replacement of medicare supplement coverage. One copy of
such notice signed by the applicant and the agent, except where the coverage is
sold without an agent, shall be provided to the applicant and an additional
signed copy shall be retained by the issuer. A direct response issuer shall
deliver to the applicant at the time of the issuance of the policy the notice
regarding replacement of medicare supplement coverage.
(4) The notice required
by paragraph (U)(3) of this rule, for an issuer shall be as provided in
appendix E to this rule in substantially the same form and in no less than
twelve point type.
(V) Filing requirements for advertising
(1) Each issuer of
medicare supplement policies or certificates in this state shall provide to the
superintendent, prior to its use, a copy of any medicare supplement
advertisement intended for use in this state, whether through written or
electronic media. No such advertisement shall be used unless approved in
writing by the superintendent. Any advertisement not disapproved within thirty
days after filing shall be deemed approved.
(2) If the image or voice
of a celebrity is used in the advertisement, any medicare supplement
advertisement shall disclose that the celebrity has been paid to endorse or
advertise the policy.
In radio and television advertising, the
disclosure shall be spoken by the celebrity. In print advertising, the
disclosure shall appear in at least twelve-point type, surrounded by a black
line box. There shall be at least one-eighth inch blank space between the black
line box and the text of the disclosure. The box shall surround no other text
or graphic image.
An issuer may determine the precise language in
which it makes this disclosure, provided the language is clear and
unambiguous.
(W) Standards for marketing
(1) An issuer, directly
or through its producers, shall:
(a) Establish marketing procedures to assure that any comparison
of policies by its agents or other producers will be fair and
accurate.
(b) Establish marketing procedures to assure excessive insurance
is not sold or issued.
(c) Display prominently by type, stamp or other appropriate
means, on the first page of the policy the following:
"Notice to buyer: This policy may not
cover all of your medical expenses."
(d) Inquire and otherwise make every reasonable effort to
identify whether a prospective applicant or enrollee for medicare supplement
insurance already has sickness and accident insurance and the types and amounts
of any such insurance.
(e) Establish auditable procedures for verifying compliance with
paragraph (W)(1) of this rule.
(2) In addition to the
practices prohibited in sections 3901.19 to 3901.221 of the Revised Code,
paragraph (C) of rule 3901-1-07 of the Administrative Code, and paragraph (D)
of rule 3901-8-09 of the Administrative Code, the following acts and practices
are prohibited:
(a) Twisting. Knowingly making any misleading representation or
incomplete or fraudulent comparison of any insurance policies or insurers for
the purpose of inducing, or tending to induce, any person to lapse, forfeit,
surrender, terminate, retain, pledge, assign, borrow on, or convert any
insurance policy or to take out a policy of insurance with another
insurer.
(b) High pressure tactics. Employing any method of marketing
having the effect of or tending to induce the purchase of insurance through
force, fright, threat whether explicit or implied, or undue pressure to
purchase or recommend the purchase of insurance.
(c) Cold lead advertising. Making use directly or indirectly of
any method of marketing which fails to disclose in a conspicuous manner that a
purpose of the method of marketing is solicitation of insurance and that
contact will be made by an insurance agent or insurance company.
(3) The terms
"medicare supplement," "medigap," "medicare
wrap-around" and words of similar import shall not be used unless the
policy is issued in compliance with this rule.
(X) Appropriateness of recommended purchase and excessive
insurance
(1) In recommending the
purchase or replacement of any medicare supplement policy or certificate an
agent shall make reasonable efforts to determine the appropriateness of a
recommended purchase or replacement.
(2) Any sale of a
medicare supplement policy or certificate that will provide an individual more
than one medicare supplement policy or certificate is prohibited.
(3) An issuer shall not
issue a medicare supplement policy or certificate to an individual enrolled in
medicare "Part C" unless the effective date of the coverage is after
the termination date of the individual's "Part C"
coverage.
(Y) Reporting of multiple policies
(1) On or before March
first of each year, an issuer shall report the following information for every
individual resident of this state for which the issuer has in force more than
one medicare supplement policy or certificate:
(a) Policy and certificate number, and
(b) Date of issuance.
(2) The items set forth
in this rule must be grouped by individual policyholder.
(3) Attached as appendix
B to this rule is a reporting form for compliance with paragraph (Y) of this
rule.
(Z) Prohibition against preexisting conditions, waiting periods,
elimination periods and probationary periods in replacement policies or
certificates.
(1) If a medicare
supplement policy or certificate replaces another medicare supplement policy or
certificate, the replacing issuer shall waive any time periods applicable to
preexisting conditions, waiting periods, elimination periods and probationary
periods in the new medicare supplement policy or certificate to the extent such
time was spent under the original policy.
(2) If a medicare
supplement policy or certificate replaces another medicare supplement policy or
certificate which has been in effect for at least six months, the replacing
policy shall not provide any time period applicable to preexisting conditions,
waiting periods, elimination periods and probationary periods.
(AA) Prohibition against use of genetic information and requests
for genetic testing for policy years beginning on or after May 21,
2009.
(1) An issuer of a
medicare supplement policy or certificate shall not deny or condition the
issuance or effectiveness of the policy or certificate (including the
imposition of any exclusion of benefits under the policy based on a preexisting
condition) and shall not discriminate in the pricing of the policy or
certificate (including the adjustment of premium rates) of an individual on the
basis of the genetic information with respect to such individual.
(2) Nothing in paragraph
(AA)(1) of this rule shall be construed to limit the ability of an issuer, to
the extent otherwise permitted by law, from:
(a) Denying or conditioning the issuance or effectiveness of the
policy or certificate or increasing the premium for an employer based on the
manifestation of a disease or disorder of an insured or applicant;
or
(b) Increasing the premium for any policy issued to an individual
based on the manifestation of a disease or disorder of an individual who is
covered under the policy (in such case, the manifestation of a disease or
disorder in one individual cannot also be used as genetic information about
other group members and to further increase the premium for the
group.)
(3) An issuer of a
medicare supplement policy or certificate shall not request or obligate an
individual or a family member of such individual to undergo a genetic
test.
(4) Paragraph (AA)(3) of
this rule does not preclude an issuer of a medicare supplement policy or
certificate from obtaining and using the results of a genetic test in making a
determination regarding payment (as defined for the purposes of applying the
regulations promulgated under part "C" of "Title XI" and
section 264 of the "Health Insurance Portability and Accountability Act of
1996," as may be revised from time to time) and consistent with paragraph
(AA)(1) of this rule.
(5) For purposes of
carrying out paragraph (AA)(4) of this rule, an issuer of a medicare supplement
policy or certificate may request only the minimum amount of information
necessary to accomplish the intended purpose.
(6) Notwithstanding
paragraph (AA)(3) of this rule, an issuer of a medicare supplement policy may
request, but not require, that an individual or a family member of such an
individual undergo a genetic test if each of the following conditions is
met:
(a) The request is made pursuant to research that complies with
section 46 of Title 45, Code of Federal Regulations, or equivalent federal
regulations, and any applicable state or local law or regulations for the
protection of human subjects in research.
(b) The issuer clearly indicates to each individual, or in the
case of a minor child, to the legal guardian of such child, to whom the request
is made, that:
(i) Compliance with the
test is voluntary; and
(ii) Non-compliance will
have no effect on enrollment status or premium or contribution
amounts.
(c) No genetic information collected or acquired under paragraph
(AA)(6) of this rule shall be used for underwriting, determination of
eligibility to enroll or maintain enrollment status, premium rates, or the
issuance, renewal, or replacement of a policy or certificate.
(d) The issuer notifies the secretary in writing that the issuer
is conducting activities pursuant to the exception provided for under paragraph
(AA)(6) of this rule, including a description of the activities
conducted.
(e) The issuer complies with such other conditions as the
secretary may by regulation require for activities conducted under paragraph
(AA)(6) of this rule.
(7) An issuer of a
medicare supplement policy or certificate shall not request, require, or
purchase genetic information for underwriting purposes.
(8) An issuer of a
medicare supplement policy or certificate shall not request, require, or
purchase genetic information with respect to any individual prior to such
individual's enrollment under the policy in connection with such
enrollment.
(9) If an issuer of a
medicare supplement policy or certificate obtains genetic information
incidental to the requesting, requiring, or purchasing of other information
concerning any individual, such request, requirement, or purchase shall not be
considered a violation of paragraph (AA)(8) of this rule if such request,
requirement, or purchase is not in violation of paragraph (AA)(7) of this
rule.
(10) For the purposes of
paragraph (AA) of this rule:
(a) "Issuer of a medicare supplement policy or
certificate" includes a third-party administrator, or other person acting
for or on behalf of such issuer.
(b) "Family member" means, with respect to an
individual, any other individual who is a first-degree, second-degree,
third-degree, or fourth-degree relative of such individual.
(c) "Genetic information" means, with respect to any
individual, information about such individual's genetic tests, the genetic
tests of family members of such individual, and the manifestation of a disease
or disorder in family members of such individual. Such term includes, with
respect to any individual, any request for, or receipt of, genetic services, or
participation in clinical research which includes genetic services, by such
individual or any family member of such individual. Any reference to genetic
information concerning an individual or family member of an individual who is a
pregnant woman, includes genetic information of any fetus carried by such
pregnant woman, or with respect to an individual or family member utilizing
reproductive technology, includes genetic information of any embryo legally
held by an individual or family member. The term "genetic
information" does not include information about the sex or age of any
individual.
(d) "Genetic services" means a genetic test, genetic
counseling (including obtaining, interpreting, or assessing genetic
information), or genetic education.
(e) "Genetic test" means an analysis of human
"DNA," "RNA," chromosomes, proteins, or metabolites, that
detect genotypes, mutations, or chromosomal changes. The term "genetic
test" does not mean an analysis of proteins or metabolites that does not
detect genotypes, mutations, or chromosomal changes; or an analysis of proteins
or metabolites that is directly related to a manifested disease, disorder, or
pathological condition that could reasonably be detected by a health care
professional with appropriate training and expertise in the field of medicine
involved.
(f) "Underwriting purposes" means:
(i) Rules for, or
determination of, eligibility (including enrollment and continued eligibility)
for benefits under the policy;
(ii) The computation of
premium or contribution amounts under the policy;
(iii) The application of
any preexisting condition exclusion under the policy;
(iv) Other activities
related to the creation, renewal, or replacement of a contract of health
insurance or health benefits.
(BB) Severability
If any paragraph, term or provision of this rule
is adjudged invalid for any reason, the judgment shall not affect, impair or
invalidate any other paragraph, term or provision of this rule, but the
remaining paragraphs, terms or provisions shall be and continue in full force
and effect.
