BILL NUMBER: AB 1543 CHAPTERED
BILL TEXT
CHAPTER 10
FILED WITH SECRETARY OF STATE JULY 2, 2009
APPROVED BY GOVERNOR JULY 2, 2009
PASSED THE SENATE JUNE 28, 2009
PASSED THE ASSEMBLY JUNE 30, 2009
AMENDED IN SENATE JUNE 23, 2009
AMENDED IN SENATE JUNE 11, 2009
AMENDED IN ASSEMBLY MAY 21, 2009
AMENDED IN ASSEMBLY MAY 6, 2009
AMENDED IN ASSEMBLY APRIL 20, 2009
INTRODUCED BY Assembly Members Jones and Fletcher
(Coauthors: Assembly Members Adams, Ammiano, Block, Carter,
Conway, De La Torre, Emmerson, Hall, Hayashi, Hernandez, Bonnie
Lowenthal, Nava, V. Manuel Perez, Salas, and Audra Strickland)
MARCH 4, 2009
An act to amend Sections 1358.4, 1358.6, 1358.8, 1358.9, 1358.11,
1358.12, 1358.13, 1358.17, 1358.18, and 1358.20 of, and to add
Sections 1358.81, 1358.91, and 1358.24 to, the Health and Safety
Code, and to amend Sections 785, 10192.4, 10192.6, 10192.8, 10192.9,
10192.11, 10192.12, 10192.13, 10192.17, 10192.18, 10192.20 of, and to
add Sections 10192.81, 10192.91, and 10192.24 to, the Insurance
Code, relating to health care coverage, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1543, Jones. Medicare supplement coverage.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care and
makes a willful violation of the act a crime. Existing law provides
for the regulation of health insurers by the Department of Insurance.
Existing law requires plans and insurers that issue Medicare
supplement contracts or policies, as defined, to comply with
specified requirements.
The federal Medicare Improvements for Patients and Providers Act
of 2008 requires states to adopt, by September 24, 2009, certain
modernization changes to Medicare supplement policies made in a
specified model law developed by the National Association of
Insurance Commissioners.
In addition, the federal Genetic Information Nondiscrimination Act
of 2008, prohibits an issuer of a Medicare supplemental policy from
denying or conditioning the issuance or effectiveness of the policy,
and from discriminating in the pricing of the policy, on the basis of
genetic information, as specified. The act further prohibits an
issuer of a Medicare supplemental policy from, among other things,
requesting or requiring an individual or a family member of that
individual to undergo a genetic test, as specified. The act requires
states to make changes needed to conform to these requirements by
July 1, 2009.
This bill would make those conforming changes and would adopt the
modernization changes made in the model law developed by the
National Association of Insurance Commissioners.
Existing law entitles individuals to an annual open enrollment
period, commencing with the individual's birthday, during which time
the individual may purchase any Medicare supplement contract or
policy that offers benefits equal to or lesser than those provided by
the previous coverage, as specified.
This bill would identify the Medicare supplement plans, based on
the modernization changes described above, that provide equal
coverage for purposes of this provision.
Existing law provides that a person is eligible for the guaranteed
issue of a Medicare supplement contract or policy if the person is
enrolled under an employee welfare benefit plan that provides health
benefits that supplement the benefits under Medicare, and the plan
either terminates or ceases to provide all of those supplemental
health benefits.
This bill would provide that a person is eligible for the
guaranteed issue of a Medicare supplement contract or policy if the
person is enrolled under an employee welfare benefit plan that
provides health benefits that supplement the benefits under Medicare
and either the plan terminates or ceases to provide all of those
supplemental health benefits or the employer no longer provides the
individual with insurance that covers all of the payment for the 20%
coinsurance.
Existing law prohibits an issuer from denying or conditioning the
issuance of a Medicare supplement contract or policy because of,
among other things, the health status of the applicant during certain
open enrollment periods, as specified. Existing law prohibits an
issuer from requiring or requesting health information from an
applicant who is guaranteed Medicare supplement coverage and from
requiring or requesting that applicant to sign a form required by the
federal Health Insurance Portability and Accountability Act of 1996
(HIPAA). Existing law requires the application form to include a
statement that the applicant is not required to provide health
information or sign a form required by HIPAA during a period of
guaranteed issuance.
This bill would prohibit an issuer from requiring, requesting, or
obtaining health information from an applicant who is guaranteed
issuance of, or open enrollment for, Medicare supplement coverage,
except as specified, and would require the application form to
include a statement that the applicant is not required to provide
health information during a period where guaranteed issue or open
enrollment applies.
Existing law provides that an individual enrolled in Medicare Part
B is entitled to open enrollment for Medicare supplement coverage
upon being notified that he or she is no longer eligible for benefits
under the Medi-Cal program.
This bill would also make an individual enrolled in Medicare Part
B entitled to open enrollment if he or she is only eligible for
Medi-Cal benefits with a share of cost and he or she certifies, at
the time of application, that he or she has not met the share of
cost.
Because a willful violation of the bill's requirements with
respect to health care service plans would be a crime, the bill would
impose a state-mandated local program.
This bill would make other conforming, technical, and related
changes.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1358.4 of the Health and Safety Code is amended
to read:
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which 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.
(c) "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 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Division 2 of the Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C.A. Section 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that 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.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the Social Security Act.
(k) "1990 standardized Medicare supplement benefit plan," "1990
standardized benefit plan," or "1990 plan" means a group or
individual Medicare supplement contract issued on or after July 21,
1992, and with an effective date prior to June 1, 2010, and includes
Medicare supplement contracts renewed on or after that date that are
not replaced by the issuer at the request of the enrollee or
subscriber.
(l) "2010 standardized Medicare supplement benefit plan," "2010
standardized benefit plan," or "2010 plan" means a group or
individual Medicare supplement contract issued with an effective date
on or after June 1, 2010.
(m) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 2. Section 1358.6 of the Health and Safety Code is amended to
read:
1358.6. (a) (1) Except for permitted preexisting condition
clauses as described in Sections 1358.7, 1358.8, and 1358.81, a
contract shall not be advertised, solicited, or issued for delivery
as a Medicare supplement contract if the contract contains
definitions, limitations, exclusions, conditions, reductions, or
other provisions that are more restrictive or limiting than that term
as officially used in Medicare, except as expressly authorized by
this article.
(2) No issuer may advertise, solicit, or issue for delivery any
Medicare supplement contract with hospital or medical coverage if the
contract contains any of the prohibited provisions described in
subdivision (b).
(b) The following provisions shall be deemed to be unfair,
unreasonable, and inconsistent with the objectives of this chapter
and shall not be contained in any Medicare supplement contract:
(1) Any waiver, exclusion, limitation, or reduction based on or
relating to a preexisting disease or physical condition, unless that
waiver, exclusion, limitation, or reduction (A) applies only to
coverage for specified services rendered not more than six months
from the effective date of coverage, (B) is based on or relates only
to a preexisting disease or physical condition defined no 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, (C) does not apply to
any coverage under any group contract, and (D) is approved in advance
by the director. Any limitations with respect to a preexisting
condition shall appear as a separate paragraph of the contract and be
labeled "Preexisting Condition Limitations."
(2) Except with respect to a group contract subject to, and in
compliance with, Section 1399.62, any provision denying coverage,
after termination of the contract, for services provided continuously
beginning while the contract was in effect, during the continuous
total disability of the subscriber or enrollee, except that the
coverage may be limited to a reasonable period of time not less than
the duration of the contract benefit period, if any, and may be
limited to the maximum benefits provided under the contract.
(c) A Medicare supplement contract in force shall not contain
benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 1358.8, a Medicare supplement contract with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current enrollees and subscribers, at
their option, who do not enroll in Medicare Part D.
(2) A Medicare supplement contract with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement contract
with benefits for outpatient prescription drugs shall not be renewed
after the enrollee or subscriber enrolls in Medicare Part D unless
both of the following conditions exist:
(A) The contract is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
SEC. 3. Section 1358.8 of the Health and Safety Code is amended to
read:
1358.8. The following standards are applicable to all Medicare
supplement contracts advertised, solicited, or issued for delivery on
or after January 1, 2001, and with an effective date prior to June
1, 2010. A contract shall not be advertised, solicited, or issued for
delivery as a Medicare supplement contract unless it complies with
these benefit standards.
(a) The following general standards apply to Medicare supplement
contracts and are in addition to all other requirements of this
article:
(1) A Medicare supplement contract 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
contract 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.
(2) A Medicare supplement contract shall not indemnify against
losses resulting from sickness on a different basis than losses
resulting from accidents.
(3) A Medicare supplement contract 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. Prepaid or
periodic charges may be modified to correspond with those changes.
(4) A Medicare supplement contract shall not provide for
termination of coverage of a spouse solely because of the occurrence
of an event specified for termination of coverage of the covered
person, other than the nonpayment of the prepaid or periodic charge.
(5) Each Medicare supplement contract shall be guaranteed
renewable.
(A) The issuer shall not cancel or nonrenew the contract solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the contract for any
reason other than nonpayment of the prepaid or periodic charge or
misrepresentation of the risk by the applicant that is shown by the
plan to be material to the acceptance for coverage. The
contestability period for Medicare supplement contracts shall be two
years.
(C) If a group Medicare supplement contract is terminated by the
subscriber and is not replaced as provided under subparagraph (E),
the issuer shall offer enrollees an individual Medicare supplement
contract that, at the option of the enrollee, either provides for
continuation of the benefits contained in the terminated contract or
provides for benefits that otherwise meet the requirements of this
subsection.
(D) If an individual is an enrollee in a group Medicare supplement
contract and the individual membership in the group is terminated,
the issuer shall either offer the enrollee the conversion opportunity
described in subparagraph (C) or, at the option of the subscriber,
shall offer the enrollee continuation of coverage under the group
contract.
(E) If a group Medicare supplement contract is replaced by another
group Medicare supplement contract purchased by the same subscriber,
the issuer of the replacement contract shall offer coverage to all
persons covered under the old group contract on its date of
termination. Coverage under the new contract shall not result in any
exclusion for preexisting conditions that would have been covered
under the group contract being replaced.
(F) If a Medicare supplement contract eliminates an outpatient
prescription drug benefit as a result of requirements imposed by the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Public Law 108-173), the contract as modified as a result of
that act shall be deemed to satisfy the guaranteed renewal
requirements of this paragraph.
(6) Termination of a Medicare supplement contract shall be without
prejudice to any continuous loss that commenced while the contract
was in force, but the extension of benefits beyond the period during
which the contract was in force may be predicated upon the continuous
total disability of the covered person, limited to the duration of
the contract benefit period, if any, or to payment of the maximum
benefits. Receipt of Medicare Part D benefits shall not be considered
in determining a continuous loss.
(7) (A) (i) A Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended at the request of the enrollee for the period, not to
exceed 24 months, in which the enrollee has applied for and is
determined to be entitled to medical assistance under Title XIX of
the federal Social Security Act, but only if the enrollee notifies
the issuer of the contract within 90 days after the date the
individual becomes entitled to assistance.
If suspension occurs and if the enrollee loses entitlement to
medical assistance, the contract shall be automatically reinstituted
(effective as of the date of termination of entitlement) as of the
termination of entitlement if the enrollee provides notice of loss of
entitlement within 90 days after the date of loss and pays the
prepaid or periodic charge attributable to the period, effective as
of the date of termination of entitlement. Upon receipt of timely
notice, the issuer shall return directly to the enrollee that portion
of the prepaid or periodic charge attributable to the period the
enrollee was entitled to medical assistance, subject to adjustment
for paid claims.
(ii) A Medicare supplement contract shall provide that benefits
and premiums under the contract shall be suspended at the request of
the enrollee or subscriber for any period that may be provided by
federal regulation if the enrollee or subscriber 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 the
enrollee or subscriber loses coverage under the group health plan,
the contract shall be automatically reinstituted, effective as of the
date of loss of coverage if the enrollee or subscriber provides
notice within 90 days of the date of the loss of coverage.
(B) Reinstitution of coverages:
(i) Shall not provide for any waiting period with respect to
treatment of preexisting conditions.
(ii) Shall provide for resumption of coverage that is
substantially equivalent to coverage in effect before the date of
suspension. If the suspended Medicare supplement contract provided
coverage for outpatient prescription drugs, reinstitution of the
contract for a Medicare Part D enrollee shall not include coverage
for outpatient prescription drugs but shall otherwise provide
coverage that is substantially equivalent to the coverage in effect
before the date of suspension.
(iii) Shall provide for classification of prepaid or periodic
charges on terms at least as favorable to the enrollee as the prepaid
or periodic charge classification terms that would have applied to
the enrollee had the coverage not been suspended.
(8) If an issuer makes a written offer to the Medicare supplement
enrollee or subscriber of one or more of its plan contracts, to
exchange during a specified period from his or her 1990 standardized
plan, as described in Section 1358.9, to a 2010 standardized plan, as
described in Section 1358.91, the offer and subsequent exchange
shall comply with the following requirements:
(A) An issuer need not provide justification to the director if
the enrollee or subscriber replaces a 1990 standardized plan contract
with an issue age rated 2010 standardized plan contract at the
enrollee or subscriber's original issue age and duration. If an
enrollee or subscriber's plan contract to be replaced is priced on an
issue age rate schedule at the time of that offer, the rate charged
to the enrollee or subscriber for the new exchanged plan shall
recognize the plan contract reserve buildup, due to the prefunding
inherent in the use of an issue age rate basis, for the benefit of
the enrollee or subscriber. The method proposed to be used by an
issuer shall be filed with the director.
(B) The rating class of the new plan contract shall be the class
closest to the enrollee or subscriber's class of the replaced
coverage.
(C) An issuer may not apply new preexisting condition limitations
or a new incontestability period to the new plan contract for those
benefits contained in the exchanged 1990 standardized plan contract
of the enrollee or subscriber, but may apply preexisting condition
limitations of no more than six months to any added benefits
contained in the new 2010 standardized plan contract not contained in
the exchanged plan contract. This subparagraph shall not apply to an
applicant who is guaranteed issue under Section 1358.11 or 1358.12.
(D) The new plan contract shall be offered to all enrollees or
subscribers within a given plan, except where the offer or issue
would be in violation of state or federal law.
(9) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(10) A Medicare supplement contract shall provide an examination
period of 30 days after the receipt of the contract by the applicant
for purposes of review, during which time the applicant may return
the contract as described in subdivision (e) of Section 1358.17.
(11) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(12) Within 30 days prior to the effective date of any Medicare
benefit changes, an issuer shall file with the director, and notify
its subscribers and enrollees of, modifications it has made to
Medicare supplement contracts.
(A) The notice shall include a description of revisions to the
Medicare Program and a description of each modification made to the
coverage provided under the Medicare supplement contract.
(B) The notice shall inform each subscriber and enrollee as to
when any adjustment in the prepaid or periodic charges will be made
due to changes in Medicare benefits.
(C) The notice of benefit modifications and any adjustments to the
prepaid or periodic charges shall be in outline form and in clear
and simple terms so as to facilitate comprehension. The notice shall
not contain or be accompanied by any solicitation.
(13) No modifications to existing Medicare supplement coverage
shall be made at the time of, or in connection with, the notice
requirements of this article except to the extent necessary to
eliminate duplication of Medicare benefits and any modifications
necessary under the contract to provide indexed benefit adjustment.
(b) With respect to the standards for basic (core) benefits for
benefit plans A to J, inclusive, every issuer shall make available a
contract including only the following basic "core" package of
benefits to each prospective applicant. This "core" package of
benefits shall be referred to as standardized Medicare supplement
benefit plan "A". An issuer may make available to prospective
applicants any of the other Medicare supplement benefit plans in
addition to the basic core package, but not in lieu of that package.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day to the 90th day, inclusive, in any Medicare benefit period.
(2) 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.
(3) Upon exhaustion of the Medicare hospital inpatient coverage
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment as payment in full and may not bill the enrollee or
subscriber for any balance.
(4) 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.
(5) Coverage for the coinsurance amount, or in the case of
hospital outpatient services, the copayment amount, of Medicare
eligible expenses under Part B regardless of hospital confinement,
subject to the Medicare Part B deductible.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B to J, inclusive, only as provided
by Section 1358.9.
(1) With respect to the Medicare Part A deductible, coverage for
all of the Medicare Part A inpatient hospital deductible amount per
benefit period.
(2) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(3) With respect to the Medicare Part B deductible, coverage for
all of the Medicare Part B deductible amount per calendar year
regardless of hospital confinement.
(4) With respect to 80 percent of the Medicare Part B excess
charges, coverage for 80 percent 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.
(5) With respect to 100 percent 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.
(6) With respect to the basic outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two-hundred-fifty-dollar ($250) calendar year
deductible, to a maximum of one thousand two hundred fifty dollars
($1,250) in benefits received by the insured per calendar year, to
the extent not covered by Medicare. On and after January 1, 2006, no
Medicare supplement contract may be sold or issued if it includes a
prescription drug benefit.
(7) With respect to the extended outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two-hundred-fifty-dollar ($250) calendar year
deductible, to a maximum of three thousand dollars ($3,000) in
benefits received by the insured per calendar year, to the extent not
covered by Medicare. On and after January 1, 2006, no Medicare
supplement contract may be sold or issued if it includes a
prescription drug benefit.
(8) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent 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 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of two hundred fifty
dollars ($250), and a lifetime maximum benefit of fifty thousand
dollars ($50,000). For purposes of this benefit,
"emergency care" shall mean care
needed immediately because of an injury or an illness of sudden and
unexpected onset.
(9) With respect to the preventive medical care benefit, coverage
for the following preventive health services:
(A) An annual clinical preventive medical history and physical
examination that may include tests and services from subparagraph (B)
and patient education to address preventive health care measures.
(B) The following screening tests or preventive services that are
not covered by Medicare, the selection and frequency of which are
determined to be medically appropriate by the attending physician:
(i) Fecal occult blood test.
(ii) Mammogram.
(C) Influenza vaccine administered at any appropriate time during
the year.
Reimbursement shall be for the actual charges up to 100 percent 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 (AMACPT) codes, to a maximum of one
hundred twenty dollars ($120) annually under this benefit. This
benefit shall not include payment for any procedure covered by
Medicare.
(10) With respect to the 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.
(A) For purposes of this benefit, the following definitions shall
apply:
(i) "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.
(ii) "Care provider" means a duly qualified or licensed home
health aide or homemaker, or a personal care aide or nurse provided
through a licensed home health care agency or referred by a licensed
referral agency or licensed nurses registry.
(iii) "Home" shall mean any place used by the insured as a place
of residence, provided that the 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.
(iv) "At-home recovery visit" means the period of a visit required
to provide at-home recovery care, without any limit on the duration
of the visit, except that each consecutive four hours in a 24-hour
period of services provided by a care provider is one visit.
(B) With respect to coverage requirements and limitations, the
following shall apply:
(i) At-home recovery services provided shall be primarily services
that assist in activities of daily living.
(ii) The covered person's attending physician shall 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.
(iii) Coverage is limited to the following:
(I) No more than the number and type of at-home recovery visits
certified as necessary by the covered person'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 ($40) per visit.
(III) One thousand six hundred dollars ($1,600) 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
subparagraph (A).
(VII) At-home recovery visits while the covered person is covered
under the contract and not otherwise excluded.
(VIII) At-home recovery visits received during the period the
covered person 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.
(C) Coverage is excluded for the following:
(i) Home care visits paid for by Medicare or other government
programs.
(ii) Care provided by family members, unpaid volunteers, or
providers who are not care providers.
(d) The standardized Medicare supplement benefit plan "K" shall
consist of the following benefits:
(1) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each day used from the 61st to the 90th day,
inclusive, in any Medicare benefit period.
(2) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each Medicare lifetime inpatient reserve day
used from the 91st to the 150th day, inclusive, in any Medicare
benefit period.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate, or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment for this benefit as payment in full and shall not bill the
enrollee or subscriber for any balance.
(4) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (10) is met.
(5) With respect to skilled nursing facility care, coverage for 50
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (10)
is met.
(6) With respect to hospice care, coverage for 50 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (10) is
met.
(7) Coverage for 50 percent, 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 described in paragraph (10) is
met.
(8) Except for coverage provided in paragraph (9), coverage for 50
percent of the cost sharing otherwise applicable under Medicare Part
B after the enrollee or subscriber pays the Part B deductible, until
the out-of-pocket limitation is met as described in paragraph (10).
(9) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services, after the enrollee or subscriber pays the
Medicare Part B deductible.
(10) Coverage of 100 percent 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
($4,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the secretary.
(e) The standardized Medicare supplement benefit plan "L" shall
consist of the following benefits:
(1) The benefits described in paragraphs (1), (2), (3), and (9) of
subdivision (d).
(2) With respect to the Medicare Part A deductible, coverage for
75 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (8) is met.
(3) With respect to skilled nursing facility care, coverage for 75
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (8)
is met.
(4) With respect to hospice care, coverage for 75 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (8) is met.
(5) Coverage for 75 percent, 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 described in paragraph (8) is met.
(6) Except for coverage provided in paragraph (7), coverage for 75
percent of the cost sharing otherwise applicable under Medicare Part
B after the enrollee or subscriber pays the Part B deductible until
the out-of-pocket limitation described in paragraph (8) is met.
(7) Coverage for 100 percent of the cost sharing for Medicare Part
B preventive services after the enrollee or subscriber pays the Part
B deductible.
(8) Coverage of 100 percent of the cost sharing for 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 two thousand dollars ($2,000) in 2006,
indexed each year by the appropriate inflation adjustment specified
by the secretary.
(f) A contract shall not contain any provision delaying the
effective date of coverage beyond the first day of the month
following the date of receipt by the issuer of the applicant's
properly completed application, except that the effective date of
coverage may be delayed until the 65th birthday of an applicant who
is to become eligible for Medicare by reason of age if the
application is received any time during the three months immediately
preceding the applicant's 65th birthday.
SEC. 4. Section 1358.81 is added to the Health and Safety Code, to
read:
1358.81. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
with an effective date on or after June 1, 2010. No contract may be
advertised, solicited, delivered, or issued for delivery in this
state as a Medicare supplement contract unless it complies with these
benefit standards. No issuer may offer any 1990 standardized
Medicare supplement contract for sale with an effective date on or
after June 1, 2010. Benefit standards applicable to Medicare
supplement contracts issued with an effective date before June 1,
2010, remain subject to the requirements of Section 1358.8.
(a) The following general standards apply to Medicare supplement
contracts and are in addition to all other requirements of this
article.
(1) A Medicare supplement contract 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
contract 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.
(2) A Medicare supplement contract shall not indemnify against
losses resulting from sickness on a different basis than losses
resulting from accidents.
(3) A Medicare supplement contract 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. Prepaid or
periodic charges may be modified to correspond with those changes.
(4) A Medicare supplement contract shall not provide for
termination of coverage of a spouse solely because of the occurrence
of an event specified for termination of coverage of the enrollee or
subscriber, other than the nonpayment of prepaid or periodic charges.
(5) Each Medicare supplement contract shall be guaranteed
renewable.
(A) The issuer shall not cancel or nonrenew the contract solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the contract for any
reason other than nonpayment of prepaid or periodic charges or
misrepresentation of the risk by the applicant that is shown by the
plan to be material to the acceptance for coverage. The
contestability period for Medicare supplement contracts shall be two
years.
(C) If the Medicare supplement contract is terminated by the group
contractholder and is not replaced as provided under subparagraph
(E), the issuer shall offer enrollees or subscribers an individual
Medicare supplement contract which, at the option of the enrollee or
subscriber, does one of the following:
(i) Provides for continuation of the benefits contained in the
group contract.
(ii) Provides for benefits that otherwise meet the requirements of
one of the standardized contracts defined in this article.
(D) If an individual is an enrollee or subscriber in a group
Medicare supplement contract and the individual terminates membership
in the group, the issuer shall do one of the following:
(i) Offer the enrollee or subscriber the conversion opportunity
described in subparagraph (C).
(ii) At the option of the group contractholder, offer the enrollee
or subscriber continuation of coverage under the group contract.
(E) (i) If a group Medicare supplement contract is replaced by
another group Medicare supplement contract purchased by the same
group contractholder, the issuer of the replacement contract shall
offer coverage to all persons covered under the old group contract on
its date of termination. Coverage under the new contract shall not
result in any exclusion for preexisting conditions that would have
been covered under the group contract being replaced.
(ii) If a Medicare supplement contract replaces another Medicare
supplement contract that has been in force for six months or more,
the replacing issuer shall not impose an exclusion or limitation
based on a preexisting condition. If the original coverage has been
in force for less than six months, the replacing issuer shall waive
any time period applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
contract to the extent the time was spent under the original
coverage.
(6) Termination of a Medicare supplement contract shall be without
prejudice to any continuous loss that commenced while the contract
was in force, but the extension of benefits beyond the period during
which the contract was in force may be predicated upon the continuous
total disability of the enrollee or subscriber, limited to the
duration of the contract benefit period, if any, or payment of the
maximum benefits. Receipt of Medicare Part D benefits shall not be
considered in determining a continuous loss.
(7) (A) (i) A Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended at the request of the enrollee or subscriber for the
period, not to exceed 24 months, in which the enrollee or subscriber
has applied for, and is determined to be entitled to, medical
assistance under Medi-Cal under Title XIX of the federal Social
Security Act, but only if the enrollee or subscriber notifies the
issuer of the contract within 90 days after the date the individual
becomes entitled to assistance. Upon receipt of timely notice, the
insurer shall return directly to the enrollee or subscriber that
portion of the prepaid or periodic charge attributable to the period
of Medi-Cal eligibility, subject to adjustment for paid claims.
(ii) If suspension occurs and if the enrollee or subscriber loses
entitlement to medical assistance under Medi-Cal, the Medicare
supplement contract shall be automatically reinstituted (effective as
of the date of termination of entitlement) as of the termination of
entitlement if the enrollee or subscriber provides notice of loss of
entitlement within 90 days after the date of loss and pays the
prepaid or periodic charge attributable to the period, effective as
of the date of termination of entitlement or equivalent coverage
shall be provided if the prior contract is no longer available.
(iii) Each Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended (for any period that may be provided by federal regulation)
at the request of the enrollee or subscriber if the enrollee or
subscriber 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 enrollee or subscriber loses coverage under the
group health plan, the contract shall be automatically reinstituted
(effective as of the date of loss of coverage) if the enrollee or
subscriber provides notice of loss of coverage within 90 days after
the date of the loss and pays the applicable prepaid or periodic
charge.
(B) Reinstitution of coverages shall comply with all of the
following requirements:
(i) Not provide for any waiting period with respect to treatment
of preexisting conditions.
(ii) Provide for resumption of coverage that is substantially
equivalent to coverage in effect before the date of suspension.
(iii) Provide for classification of prepaid or periodic charges on
terms at least as favorable to the enrollee or subscriber as the
classification of the prepaid or periodic charge that would have
applied to the enrollee or subscriber had the coverage not been
suspended.
(8) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(9) A Medicare supplement contract shall provide an examination
period of 30 days after the receipt of the contract by the applicant
for purposes of review, during which time the applicant may return
the contract as described in subdivision (e) of Section 1358.17.
(10) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(11) Within 30 days prior to the effective date of any Medicare
benefit changes, an issuer shall file with the director, and notify
its subscribers and enrollees of, modifications it has made to
Medicare supplement contracts.
(A) The notice shall include a description of revisions to the
Medicare Program and a description of each modification made to the
coverage provided under the Medicare supplement contract.
(B) The notice shall inform each subscriber and enrollee as to
when any adjustment in the prepaid or periodic charges will be made
due to changes in Medicare benefits.
(C) The notice of benefit modifications and any adjustments to the
prepaid or periodic charges shall be in outline form and in clear
and simple terms so as to facilitate comprehension. The notice shall
not contain or be accompanied by any solicitation.
(12) No modifications to existing Medicare supplement coverage
shall be made at the time of, or in connection with, the notice
requirements of this article except to the extent necessary to
eliminate duplication of Medicare benefits and any modifications
necessary under the contract to provide indexed benefit adjustment.
(b) With respect to the standards for basic (core) benefits for
benefit plans A, B, C, D, F, high deductible F, G, M, and N, every
issuer of Medicare supplement benefit plans shall make available a
contract including only the following basic "core" package of
benefits to each prospective enrollee or subscriber. An issuer may
make available to prospective enrollees or subscribers any of the
other Medicare supplement benefit plans in addition to the basic core
package, but not in lieu of that package.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day through the 90th day, inclusive, in any Medicare benefit period.
(2) 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.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent 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 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(4) 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.
(5) 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.
(6) Coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B, C, D, F, high deductible F, G,
M, and N, consistent with the plan type and benefits for each plan as
provided in Section 1358.91:
(1) With respect to the Medicare Part A deductible, coverage for
100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(2) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(3) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day through the 100th day in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(4) With respect to the Medicare Part B deductible, coverage for
100 percent of the Medicare Part B deductible amount per calendar
year regardless of hospital confinement.
(5) With respect to 100 percent 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.
(6) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent 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 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of two hundred fifty
dollars ($250), and a lifetime maximum benefit of fifty thousand
dollars ($50,000). For purposes of this benefit, "emergency care"
shall mean care needed immediately because of an injury or an illness
of sudden and unexpected onset.
SEC. 5. Section 1358.9 of the Health and Safety Code is amended to
read:
1358.9. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
on or after July 21, 1992, and with an effective date prior to June
1, 2010.
(a) An issuer shall make available to each prospective enrollee a
contract form containing only the basic (core) benefits, as defined
in subdivision (b) of Section 1358.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 1358.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to L,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 1358.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 1358.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 1358.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
1358.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, 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 (1), (2), (3), and (8) of
subdivision (c) of Section 1358.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, 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 (1), (2), (8), and (10) of subdivision (c)
of Section 1358.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, 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 (1), (2), (8), and (9) of subdivision (c) of
Section 1358.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
1358.8, respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus
the Medicare Part A
deductible, skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
1358.8, 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 one thousand five hundred
dollars ($1,500) for 1998 and 1999, and shall be based on the
calendar year, as adjusted annually thereafter by the secretary to
reflect the change in the Consumer Price Index for all urban
consumers for the 12-month period ending with August of the preceding
year, and rounded to the nearest multiple of ten dollars ($10).
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent 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 (1), (2), (4), (8), and (10) of subdivision (c) of Section
1358.8, respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
subdivision (c) of Section 1358.8, respectively. The outpatient
prescription drug benefit shall not be included in a Medicare
supplement contract sold on or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent 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 (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
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 one thousand five hundred dollars ($1,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars ($10). The outpatient prescription drug
benefit shall not be included in a Medicare supplement contract sold
on or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
1358.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
1358.8.
(f) An issuer may, with the prior approval of the director, offer
contracts with new or innovative benefits in addition to the benefits
provided in a contract that otherwise complies with the applicable
standards. The new or innovative benefits may include benefits that
are appropriate to Medicare supplement contracts, that are not
otherwise available and that are cost-effective and offered in a
manner that is consistent with the goal of simplification of Medicare
supplement contracts. On and after January 1, 2006, the innovative
benefit shall not include an outpatient prescription drug benefit.
SEC. 6. Section 1358.91 is added to the Health and Safety Code, to
read:
1358.91. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
with an effective date on or after June 1, 2010. No contract may be
advertised, solicited, delivered, or issued for delivery in this
state as a Medicare supplement contract unless it complies with these
benefit plan standards. Benefit plan standards applicable to
Medicare supplement contracts issued with an effective date before
June 1, 2010, remain subject to the requirements of Section 1358.9.
(a) (1) An issuer shall make available to each prospective
enrollee and subscriber a contract containing only the basic (core)
benefits, as defined in subdivision (b) of Section 1358.81.
(2) If an issuer makes available any of the additional benefits
described in subdivision (c) of Section 1358.81, or offers
standardized benefit plan K or L, as described in paragraphs (8) and
(9) of subdivision (e), then the issuer shall make available to each
prospective enrollee and subscriber, in addition to a contract with
only the basic (core) benefits as described in paragraph (1), a
contract containing either standardized benefit plan C, as described
in paragraph (3) of subdivision (e), or standardized benefit plan F,
as described in paragraph (5) of subdivision (e).
(b) No groups, packages or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted in subdivision (f)
and by Section 1358.10.
(c) Benefit plans shall be uniform in structure, language,
designation, and format to the standard benefit plans listed in
subdivision (e) and conform to the definitions in Section 1358.4.
Each benefit shall be structured in accordance with the format
provided in subdivisions (b) and (c) of Section 1358.81; or, in the
case of plan K or L, in paragraphs (8) or (9) of subdivision (e) of
Section 1358.91 and list the benefits in the order shown in
subdivision (e). For purposes of this section, "structure, language,
and format" means style, arrangement, and overall content of a
benefit.
(d) In addition to the benefit plan designations required in
subdivision (c), an issuer may use other designations to the extent
permitted by law.
(e) With respect to the makeup of 2010 standardized benefit plans,
the following shall apply:
(1) Standardized Medicare supplement benefit plan A shall include
only the following: the basic (core) benefits as defined in
subdivision (b) of Section 1358.81.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible as defined in paragraph (1) of subdivision (c) of
Section 1358.81.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, 100 percent of the
Medicare Part B deductible, and medically necessary emergency care in
a foreign country, as defined in paragraphs (1), (3), (4), and (6)
of subdivision (c) of Section 1358.81, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the basic (core) benefit, as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (1), (3), and (6) of subdivision (c) of Section 1358.81,
respectively.
(5) Standardized Medicare supplement benefit plan F shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, 100 percent of the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign
country, as defined in paragraphs (1), (3), (4), (5), and (6) of
subdivision (c) of Section 1358.81, respectively.
(6) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual deductible set forth in
subparagraph (B).
(A) The basic (core) benefit as defined in subdivision (b) of
Section 1358.81, plus 100 percent of the Medicare Part A deductible,
skilled nursing facility care, 100 percent of the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country, as defined
in paragraphs (1), (3), (4), (5), and (6) of subdivision (c) of
Section 1358.81, respectively.
(B) The annual deductible in high deductible plan F shall consist
of out-of-pocket expenses, other than premiums, for services covered
by 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 ($1,500) and shall be adjusted annually from 1999 by
the Secretary of the United States Department of Health and Human
Services to reflect the change in the Consumer Price Index for all
urban consumers for the 12-month period ending with August of the
preceding year, and rounded to the nearest multiple of ten dollars
($10).
(7) Standardized Medicare supplement benefit plan G shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, and medically necessary emergency
care in a foreign country, as defined in paragraphs (1), (3), (5),
and (6) of subdivision (c) of Section 1358.81, respectively.
(8) Standardized Medicare supplement benefit plan K shall include
only the following:
(A) Coverage of 100 percent of the Part A hospital coinsurance
amount for each day used from the 61st through the 90th day in any
Medicare benefit period.
(B) Coverage of 100 percent of the Part A hospital coinsurance
amount for each Medicare lifetime inpatient reserve day used from the
91st through the 150th day in any Medicare benefit period.
(C) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent 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 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(D) Coverage for 50 percent of the Medicare Part A inpatient
hospital deductible amount per benefit period until the out-of-pocket
limitation is met as described in subparagraph (J).
(E) Coverage for 50 percent of the coinsurance amount for each day
used from the 21st day through the 100th day in a Medicare benefit
period for posthospital skilled nursing facility care eligible under
Medicare Part A until the out-of-pocket limitation is met as
described in subparagraph (J).
(F) Coverage for 50 percent of cost sharing for all Part A
Medicare eligible expenses and respite care until the out-of-pocket
limitation is met as described in subparagraph (J).
(G) Coverage for 50 percent, 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 in
subparagraph (J).
(H) Except for coverage provided in subparagraph (I), coverage for
50 percent of the cost sharing otherwise applicable under Medicare
Part B after the enrollee or subscriber pays the Part B deductible
until the out-of-pocket limitation is met as described in
subparagraph (J).
(I) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services after the enrollee or subscriber pays the Part
B deductible.
(J) Coverage of 100 percent 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
($4,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the Secretary of the United States Department
of Health and Human Services.
(9) Standardized Medicare supplement benefit plan L shall include
only the following:
(A) The benefits described in subparagraphs (A), (B), (C), and (I)
of paragraph (8).
(B) The benefit described in subparagraphs (D), (E), (F), (G), and
(H) of paragraph (8), but substituting 75 percent for 50 percent.
(C) The benefit described in subparagraph (J) of paragraph (8),
but substituting two thousand dollars ($2,000) for four thousand
dollars ($4,000).
(10) Standardized Medicare supplement benefit plan M shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 50 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (2), (3), and (6) of subdivision (c) of Section 1358.81,
respectively.
(11) Standardized Medicare supplement benefit plan N shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 1358.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (1), (3), and (6) of subdivision (c) of Section 1358.81,
respectively, with copayments in the following amounts:
(A) The lesser of twenty dollars ($20) or the Medicare Part B
coinsurance or copayment for each covered health care provider office
visit, including visits to medical specialists.
(B) The lesser of fifty dollars ($50) or the Medicare Part B
coinsurance or copayment for each covered emergency room visit;
however, this copayment shall be waived if the enrollee or subscriber
is admitted to any hospital and the emergency visit is subsequently
covered as a Medicare Part A expense.
(f) An issuer may, with the prior approval of the director, offer
contracts with new or innovative benefits, in addition to the
standardized benefits provided in a contract that otherwise complies
with the applicable standards. The new or innovative benefits shall
include only benefits that are appropriate to Medicare supplement
contracts, are new or innovative, are not otherwise available, and
are cost effective. Approval of new or innovative benefits shall 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.
SEC. 7. Section 1358.11 of the Health and Safety Code is amended
to read:
1358.11. (a) (1) An issuer shall not deny or condition the
offering or effectiveness of any Medicare supplement contract
available for sale in this state, nor discriminate in the pricing of
a contract because of the health status, claims experience, receipt
of health care, or medical condition of an applicant in the case of
an application for a contract 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 65 years of age or older and is
enrolled for benefits under Medicare Part B. Each Medicare supplement
contract currently available from an issuer shall be made available
to all applicants who qualify under this subdivision and who are 65
years of age or older.
(2) An issuer shall make available Medicare supplement benefit
plans A, B, C, and F, if currently available, to an applicant who
qualifies under this subdivision who is 64 years of age or younger
and who does not have end-stage renal disease. An issuer shall also
make available to those applicants, Medicare supplement benefit plan
H, I, or J, if currently available, and commencing January 1, 2007,
shall make available to them Medicare supplement benefit plan K or L,
if currently available. The selection among Medicare supplement
benefit plan H, I, or J and the selection between Medicare supplement
benefit plan K or L shall be made at the issuer's discretion.
(3) This section and Section 1358.12 do not prohibit an issuer in
determining subscriber rates from treating applicants who are under
65 years of age and are eligible for Medicare Part B as a separate
risk classification.
(b) (1) If an applicant qualifies under subdivision (a) and
submits an application during the time period referenced in
subdivision (a) 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.
(2) If the applicant qualifies under subdivision (a) and submits
an application during the time period referenced in subdivision (a)
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 manner of the reduction
under this subdivision shall be as specified by the director.
(c) Except as provided in subdivision (b) and Section 1358.23,
subdivision (a) shall not be construed as preventing the exclusion of
benefits under a contract, during the first six months, based on a
preexisting condition for which the enrollee received treatment or
was otherwise diagnosed during the six months before the coverage
became effective.
(d) An individual enrolled in Medicare by reason of disability
shall be entitled to open enrollment described in this section for
six months after the date of his or her enrollment in Medicare Part
B, or if notified retroactively of his or her eligibility for
Medicare, for six months following notice of eligibility. Sales
during the open enrollment period shall not be discouraged by any
means, including the altering of the commission structure.
(e) (1) An individual enrolled in Medicare Part B is entitled to
open enrollment described in this section for six months following:
(A) Receipt of a notice of termination or, if no notice is
received, the effective date of termination from any
employer-sponsored health plan including an employer-sponsored
retiree health plan.
(B) Receipt of a notice of loss of eligibility due to the divorce
or death of a spouse or, if no notice is received, the effective date
of loss of eligibility due to the divorce or death of a spouse, from
any employer-sponsored health plan including an employer-sponsored
retiree health plan.
(C) Termination of health care services for a military retiree or
the retiree's Medicare eligible spouse or dependent as a result of a
military base closure or loss of access to health care services
because the base no longer offers services or because the individual
relocates.
(2) For purposes of this subdivision, "employer-sponsored retiree
health plan" includes any coverage for medical expenses, including
coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA) and the California Continuation Benefits Replacement Act
(Cal-COBRA), that is directly or indirectly sponsored or established
by an employer for employees or retirees, their spouses, dependents,
or other included covered persons.
(f) An individual enrolled in Medicare Part B is entitled to open
enrollment described in this section if the individual was covered
under a policy, certificate, or contract providing Medicare
supplement coverage but that coverage terminated because the
individual established residence at a location not served by the
issuer.
(g) (1) An individual whose coverage was terminated by a Medicare
Advantage plan shall be entitled to an additional 60-day open
enrollment period to be added on to and run consecutively after any
open enrollment period authorized by federal law or regulation, for
any and all Medicare supplement coverage available on a guaranteed
basis under state and federal law or regulations for persons
terminated by their Medicare Advantage plan.
(2) Health plans that terminate Medicare enrollees shall notify
those enrollees in the termination notice of the additional open
enrollment period authorized by this subdivision. Health plan notices
shall inform enrollees of the opportunity to secure advice and
assistance from the HICAP in their area, along with the toll-free
telephone number for HICAP.
(h) (1) An individual shall be entitled to an annual open
enrollment period lasting 30 days or more, commencing with the
individual's birthday, during which time that person may purchase any
Medicare supplement coverage that offers benefits equal to or lesser
than those provided by the previous coverage. During this open
enrollment period, no issuer that falls under this provision shall
deny or condition the issuance or effectiveness of Medicare
supplement coverage, nor discriminate in the pricing of coverage,
because of health status, claims experience, receipt of health care,
or medical condition of the individual if, at the time of the open
enrollment period, the individual is covered under another Medicare
supplement policy, certificate, or contract. An issuer that offers
Medicare supplement contracts shall notify an enrollee of his or her
rights under this subdivision at least 30 and no more than 60 days
before the beginning of the open enrollment period.
(2) For purposes of this subdivision, the following provisions
shall apply:
(A) A 1990 standardized Medicare supplement benefit plan A shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan A.
(B) A 1990 standardized Medicare supplement benefit plan B shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan B.
(C) A 1990 standardized Medicare supplement benefit plan C shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan C.
(D) A 1990 standardized Medicare supplement benefit plan D shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan D.
(E) A 1990 standardized Medicare supplement benefit plan E shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare benefit plan D.
(F) (i) A 1990 standardized Medicare supplement benefit plan F
shall be deemed to offer benefits equal to those provided by a 2010
standardized Medicare benefit plan F.
(ii) A 1990 standardized Medicare supplement benefit high
deductible plan F shall be deemed to offer benefits equal to those
provided by a 2010 standardized Medicare supplement benefit high
deductible plan F.
(G) A 1990 standardized Medicare supplement benefit plan G shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan G.
(H) A 1990 standardized Medicare supplement benefit plan H shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan D.
(I) A 1990 standardized Medicare supplement benefit plan I shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan G.
(J) (i) A 1990 standardized Medicare supplement benefit plan J
shall be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan F.
(ii) A 1990 standardized Medicare supplement benefit high
deductible plan J shall be deemed to offer benefits equal to those
provided by a 2010 standardized Medicare supplement benefit high
deductible plan F.
(K) A 1990 standardized Medicare supplement benefit plan K shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan K.
(L) A 1990 standardized Medicare supplement benefit plan L shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan L.
(i) An individual enrolled in Medicare Part B is entitled to open
enrollment described in this section upon being notified that,
because of an increase in the individual's income or assets, he or
she meets one of the following requirements:
(1) He or she is no longer eligible for Medi-Cal benefits.
(2) He or she is only eligible for Medi-Cal benefits with a share
of cost and certifies at the time of application that he or she has
not met the share of cost.
SEC. 8. Section 1358.12 of the Health and Safety Code is
amended to read:
1358.12. (a) (1) With respect to the guaranteed issue of a
Medicare supplement contract, eligible persons are those individuals
described in subdivision (b) who seek to enroll under the contract
during the period specified in subdivision (c), and who submit
evidence of the date of termination or disenrollment or enrollment in
Medicare Part D with the application for a Medicare supplement
contract.
(2) With respect to eligible persons, an issuer shall not take any
of the following actions:
(A) Deny or condition the issuance or effectiveness of a Medicare
supplement contract described in subdivision (e) that is offered and
is available for issuance to new enrollees by the issuer.
(B) Discriminate in the pricing of that Medicare supplement
contract because of health status, claims experience, receipt of
health care, or medical condition.
(C) Impose an exclusion of benefits based on a preexisting
condition under that Medicare supplement contract.
(b) An eligible person is an individual described in any of the
following paragraphs:
(1) The individual is enrolled under an employee welfare benefit
plan that provides health benefits that supplement the benefits under
Medicare and either of the following apply:
(A) The plan either terminates or ceases to provide all of those
supplemental health benefits to the individual.
(B) The employer no longer provides the individual with insurance
that covers all of the payment for the 20-percent coinsurance.
(2) The individual is enrolled with a Medicare Advantage
organization under a Medicare Advantage plan under Medicare Part C,
and any of the following circumstances apply:
(A) The certification of the organization or plan has been
terminated.
(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. Those changes in
circumstances shall not include 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 Medicare Advantage plan in which the individual is
enrolled reduces any of its benefits or increases the amount of cost
sharing or discontinues for other than good cause relating to quality
of care, its relationship or contract under the plan with a provider
who is currently furnishing services to the individual. An
individual shall be eligible under this subparagraph for a Medicare
supplement contract issued by the same issuer through which the
individual was enrolled at the time the reduction, increase, or
discontinuance described above occurs or, commencing January 1, 2007,
for one issued by a subsidiary of the parent company of that issuer
or by a network that contracts with the parent company of that
issuer.
(E) The individual demonstrates, in accordance with guidelines
established by the secretary, either of the following:
(i) The organization offering the plan substantially violated a
material provision of the organization's contract under this article
in relation to the individual, including the failure to provide on a
timely basis medically necessary care for which benefits are
available under the plan or the failure to provide the covered care
in accordance with applicable quality standards.
(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.
(F) The individual meets other exceptional conditions as the
secretary may provide.
(3) The individual is 65 years of age or older, is enrolled with a
Program of All-Inclusive Care for the Elderly (PACE) provider under
Section 1894 of the Social Security Act, and circumstances similar to
those described in paragraph (2) exist that would permit
discontinuance of the individual's enrollment with the provider, if
the individual were enrolled in a Medicare Advantage plan.
(4) The individual meets both of the following conditions:
(A) The individual is enrolled with any of the following:
(i) An eligible organization under a contract under Section 1876
of the Social Security Act (Medicare cost).
(ii) A similar organization operating under demonstration project
authority, effective for periods before April 1, 1999.
(iii) An organization under an agreement under Section 1833(a)(1)
(A) of the Social Security Act (health care prepayment plan).
(iv) An organization under a Medicare Select policy.
(B) The enrollment ceases under the same circumstances that would
permit discontinuance of an individual's election of coverage under
paragraph (2) or (3).
(5) The individual is enrolled under a Medicare supplement
contract, and the enrollment ceases because of any of the following
circumstances:
(A) The insolvency of the issuer or bankruptcy of the nonissuer
organization, or other involuntary termination of coverage or
enrollment under the contract.
(B) The issuer of the contract substantially violated a material
provision of the contract.
(C) The issuer, or an agent or other entity acting on the issuer's
behalf, materially misrepresented the contract's provisions in
marketing the contract to the individual.
(6) The individual meets both of the following conditions:
(A) The individual was enrolled under a Medicare supplement
contract and terminates enrollment and subsequently enrolls, for the
first time, with any Medicare Advantage organization under a Medicare
Advantage plan under Medicare Part C, any eligible organization
under a contract under Section 1876 of the Social Security Act
(Medicare cost), any similar organization operating under
demonstration project authority, any PACE provider under Section 1894
of the Social Security Act, or a Medicare Select policy.
(B) The subsequent enrollment under subparagraph (A) is terminated
by the individual during any period within the first 12 months of
the subsequent enrollment (during which the enrollee is permitted to
terminate the subsequent enrollment under Section 1851(e) of the
federal Social Security Act).
(7) The individual upon first becoming eligible for benefits under
Medicare Part A at 65 years of age, enrolls in a Medicare Advantage
plan under Medicare Part C or with a PACE provider under Section 1894
of the Social Security Act, and disenrolls from the plan or program
not later than 12 months after the effective date of enrollment.
(8) The individual while enrolled under a Medicare supplement
contract that covers outpatient prescription drugs enrolls in a
Medicare Part D plan during the initial enrollment period, terminates
enrollment in the Medicare supplement contract, and submits evidence
of enrollment in Medicare Part D along with the application for a
contract described in paragraph (4) of subdivision (e).
(c) (1) In the case of an individual described in paragraph (1) of
subdivision (b), the guaranteed issue period begins on the later of
the following two dates and ends on the date that is 63 days after
the date the applicable coverage terminated:
(A) The date the individual receives a notice of termination or
cessation of all supplemental health benefits or, if no notice is
received, the date of the notice denying a claim because of a
termination or cessation of benefits.
(B) The date that the applicable coverage terminates or ceases.
(2) In the case of an individual described in paragraphs (2), (3),
(4), (6), and (7) of subdivision (b) whose enrollment is terminated
involuntarily, the guaranteed issue period begins on the date that
the individual receives a notice of termination and ends 63 days
after the date the applicable coverage is terminated.
(3) In the case of an individual described in subparagraph (A) of
paragraph (5) of subdivision (b), the guaranteed issue period begins
on the earlier of the following two dates and ends on the date that
is 63 days after the date the coverage is terminated:
(A) The date that the individual receives a notice of termination,
a notice of the issuer's bankruptcy or insolvency, or other similar
notice if any.
(B) The date that the applicable coverage is terminated.
(4) In the case of an individual described in paragraph (2), (3),
(6), or (7) of, or in subparagraph (B) or (C) of paragraph (5) of,
subdivision (b) who disenrolls voluntarily, the guaranteed issue
period begins on the date that is 60 days before the effective date
of the disenrollment and ends on the date that is 63 days after the
effective date of the disenrollment.
(5) In the case of an individual described in paragraph (8) of
subdivision (b), 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
60-day period immediately preceding the initial enrollment period for
Medicare Part D and ends on the date that is 63 days after the
effective date of the individual's coverage under Medicare Part D.
(6) In the case of an individual described in subdivision (b) who
is not included in this subdivision, the guaranteed issue period
begins on the effective date of disenrollment and ends on the date
that is 63 days after the effective date of disenrollment.
(d) (1) In the case of an individual described in paragraph (6) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b) is
involuntarily terminated within the first 12 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 (6) of subdivision
(b).
(2) In the case of an individual described in paragraph (7) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with a plan or in a program described in
paragraph (7) of subdivision (b) is involuntarily terminated within
the first 12 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 (7) of subdivision (b).
(3) For purposes of paragraphs (6) and (7) of subdivision (b), an
enrollment of an individual with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b), or
with a plan or in a program described in paragraph (7) of
subdivision (b) shall not 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.
(e) (1) Under paragraphs (1), (2), (3), (4), and (5) of
subdivision (b), an eligible individual is entitled to a Medicare
supplement contract that has a benefit package classified as Plan A,
B, C, F (including a high deductible Plan F), K, or L offered by any
issuer.
(2) (A) Under paragraph (6) of subdivision (b), an eligible
individual is entitled to the same Medicare supplement contract in
which he or she was most recently enrolled, if available from the
same issuer. If that contract is not available, the eligible
individual is entitled to a Medicare supplement contract that has a
benefit package classified as Plan A, B, C, F (including a high
deductible Plan F), K, or L offered by any issuer.
(B) On and after January 1, 2006, an eligible individual described
in this paragraph who was most recently enrolled in a Medicare
supplement contract with an outpatient prescription drug benefit, is
entitled to a Medicare supplement contract that is available from the
same issuer but without an outpatient prescription drug benefit or,
at the election of the individual, has a benefit package classified
as a Plan A, B, C, F (including high deductible Plan F), K, or L that
is offered by any issuer.
(3) Under paragraph (7) of subdivision (b), an eligible individual
is entitled to any Medicare supplement contract offered by any
issuer.
(4) Under paragraph (8) of subdivision (b), an eligible individual
is entitled to a Medicare supplement contract that has a benefit
package classified as Plan A, B, C, F (including a high deductible
Plan F), K, or L and that is offered and is available for issuance to
a new enrollee by the same issuer that issued the individual's
Medicare supplement contract with outpatient prescription drug
coverage.
(f) (1) At the time of an event described in subdivision (b) by
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 contract, or the administrator of the plan being
terminated, respectively, shall notify the individual of his or her
rights under this section and of the obligations of issuers of
Medicare supplement contracts under subdivision (a). The notice shall
be communicated contemporaneously with the notification of
termination.
(2) At the time of an event described in subdivision (b) by 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 contract, or the administrator of
the plan, respectively, shall notify the individual of his or her
rights under this section, and of the obligations of issuers of
Medicare supplement contracts under subdivision (a). The notice shall
be communicated within 10 working days of the date the issuer
received notification of disenrollment.
(g) An issuer shall refund any unearned premium that an enrollee
or subscriber paid in advance and shall terminate coverage upon the
request of an enrollee or subscriber.
SEC. 9. Section 1358.13 of the Health and Safety Code is amended
to read:
1358.13. (a) An issuer shall comply with Section 1882(c)(3) of
the federal Social Security Act (as enacted by Section 4081(b)(2)(C)
of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA),
Public Law 100-203) by doing all of the following:
(1) Accepting a notice from a Medicare Administrative Contractor,
formerly known as a fiscal intermediary or 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.
(2) Notifying the participating physician or supplier and the
beneficiary of the payment determination.
(3) Paying the participating physician or supplier directly.
(4) Furnishing, at the time of enrollment, each enrollee with a
card listing the contract name, number, and a central mailing address
to which notices respecting coverage from a Medicare Administrative
Contractor may be sent.
(5) Paying user fees established under Section 1395u(h)(3)(B) of
Title 42 of the United States Code, for claim notices that are
transmitted electronically or otherwise.
(6) Providing to the secretary, at least annually, a central
mailing address to which all claims may be sent by Medicare
Administrative Contractors.
(b) Compliance with the requirements set forth in subdivision (a)
shall be certified on the Medicare supplement insurance experience
reporting form provided by the director.
SEC. 10. Section 1358.17 of the Health and Safety Code is amended
to read:
1358.17. (a) (1) Medicare supplement contracts shall include a
renewal or continuation provision. The language or specifications of
the provision shall be consistent with subdivision (a) of Section
1365 and the rules adopted thereunder. The provision shall be
appropriately captioned and shall appear on the first page of the
contract, and shall include any reservation by the issuer of the
right to change prepaid or periodic charges and any automatic renewal
increases based on the enrollee's age.
(2) The contract shall contain the provisions required to be set
forth by Section 1300.67.4 of Title 28 of the California Code of
Regulations.
(b) (1) Except for contract amendments by which the issuer
effectuates a request made in writing by the enrollee, exercises a
specifically reserved right under a Medicare supplement contract, or
is required to reduce or eliminate benefits to avoid duplication of
Medicare benefits, all amendments to a Medicare supplement contract
after the date of issue or upon reinstatement or renewal that reduce
or eliminate benefits or coverage in the contract shall require a
signed acceptance by the subscriber. After the date of contract
issue, any amendment that increases benefits or coverage with a
concomitant increase in prepaid or periodic charges during the
contract term shall be agreed to in writing signed by the subscriber,
unless the benefits are required by the minimum standards for
Medicare supplement contracts, or if the increased benefits or
coverage is required by law. If a separate additional charge is made
for benefits provided in connection with contract amendments, the
charge shall be set forth in the contract.
(2) An issuer shall not in any way reduce or eliminate any benefit
or coverage under a Medicare supplement contract at any time after
the date of entering the contract, including dates of reinstatement
or renewal, unless and until the change is voluntarily agreed to in
writing signed by the subscriber or enrollee, or is required to
reduce or eliminate benefits to avoid duplication of Medicare
benefits. The issuer shall not increase benefits or coverage with a
concomitant increase in prepaid or periodic charges during the term
of the contract unless and until the change is voluntarily agreed to
in writing signed by the subscriber or enrollee or unless the
increased benefits or coverage is required by law or regulation.
(c) Medicare supplement contracts 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 contract contains any limitations
with respect to preexisting conditions, those limitations shall
appear as a separate paragraph of the contract and be labeled as
"Preexisting Condition Limitations."
(e) (1) Medicare supplement contracts shall have a notice
prominently printed in no less than 10-point uppercase type, on the
cover page of the contract or attached thereto stating that the
applicant shall have the right to return the contract within 30 days
of its receipt via regular mail, and to have any charges refunded in
a timely manner if, after examination of the contract, the covered
person is not satisfied for any reason. The return shall void the
contract from the beginning, and the parties shall be in the same
position as if no contract had been issued.
(2) For purposes of this section, a timely manner shall be no
later than 30 days after the issuer receives the returned contract.
(3) If the issuer fails to refund all prepaid or periodic charges
paid in a timely manner, then the applicant shall receive interest on
the paid charges at the legal rate of interest on judgments as
provided in Section 685.010 of the Code of Civil Procedure. The
interest shall be paid from the date the issuer received the returned
contract.
(f) (1) Issuers of health care service plan contracts that provide
hospital or medical expense coverage on an expense incurred or
indemnity basis to persons 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 and in a type size no smaller than 12-point type. Delivery
of the guide shall be made whether or not the contracts are
advertised, solicited, or issued for delivery as Medicare supplement
contracts as defined in this article. Except in the case of direct
response issuers, delivery of the guide shall be made to the
applicant at the time of application, and acknowledgment 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 contract is delivered.
(2) For the purposes of this section, "form" means the language,
format, type size, type proportional spacing, bold character, and
line spacing.
(g) As soon as practicable, but no later than 30 days prior to the
annual effective date of any Medicare benefit changes, an issuer
shall notify its enrollees and subscribers of modifications it has
made to Medicare supplement contracts in a format acceptable to the
director. The notice shall include both of the following:
(1) A description of revisions to the Medicare Program and a
description of each modification made to the coverage provided under
the Medicare supplement contract.
(2) Inform each enrollee as to when any adjustment in prepaid or
periodic charges is to be made due to changes in Medicare.
(h) The notice of benefit modifications and any adjustments of
prepaid or periodic charges shall be in outline form and in clear and
simple terms so as to facilitate comprehension.
(i) The notices shall not contain or be accompanied by any
solicitation.
(j) (1) 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
acknowledgment of receipt of the outline from the applicant. If an
outline of coverage is provided at the time of application and the
Medicare supplement contract is issued on a basis which would require
revision of the outline, a substitute outline of coverage properly
describing the contract shall accompany the contract when it is
delivered and contain the following statement, in no less than
12-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."
(2) The outline of coverage provided to applicants pursuant to
this section consists of four parts: a cover page, information about
prepaid or periodic charges, disclosure pages, and charts displaying
the features of each benefit plan offered by the issuer. The outline
of coverage shall be in the language and format prescribed below in
no less than 12-point type. All Medicare supplement plans authorized
by federal law shall be shown on the cover page, and the plans that
are offered by the issuer shall be prominently identified.
Information about prepaid or periodic charges for plans that are
offered shall be shown on the cover page or immediately following the
cover page and shall be prominently displayed. The charge and mode
shall be stated for all plans that are offered to the prospective
applicant. All possible charges for the prospective applicant shall
be illustrated.
(3) (A) The following shall only apply to contracts sold for
effective dates prior to June 1, 2010:
(i) The outline of coverage shall include the items, and in the
same order, specified in the chart set forth in Section 17 of the
Model Regulation to implement the NAIC Medicare Supplement Insurance
Minimum Standards Model Act, as adopted by the National Association
of Insurance Commissioners in 2004.
(ii) The cover page shall contain the 14-plan (A-L) charts. The
plans offered by the issuer shall be clearly identified. Innovative
benefits shall be explained in a manner approved by the director.
(B) The following shall only apply to policies sold for effective
dates on or after June 1, 2010:
(i) The outline of coverage shall include the items, and in the
same order specified in the chart set forth in Section 17 of the
Model Regulation to implement the NAIC Medicare Supplement Insurance
Minimum Standards Model Act, as adopted by the National Association
of Insurance Commissioners in 2008.
(ii) The cover page shall contain all Medicare supplement benefit
plan charts A to D, inclusive, F, high deductible F, G, and K to N,
inclusive. The plans offered by the issuer shall be clearly
identified. Innovative benefits shall be explained in a manner
approved by the director.
The text shall read: "Medicare supplement contracts can be sold in
only standard plans. This chart shows the benefits included in each
plan. Every insurance company must offer Plan A. Some plans may not
be available. Plans E, H, I, and J are no longer available for sale.
[This sentence shall not appear after June 1, 2011.]"
(4) The disclosure pages shall be in the language and format
described below in no less than 12-point type.
INFORMATION ABOUT PREPAID OR PERIODIC CHARGES
[Insert plan's name] can only raise your charges if it raises the
charge for all contracts like yours in this state. [If the charge is
based on the increasing age of the enrollee, include information
specifying when charges will change.]
DISCLOSURES
Use this outline to compare benefits and charges among policies.
[The following additional language shall be included under
"DISCLOSURES" for contracts with effective dates on or after June 1,
2010, but shall not appear after June 1, 2011.]
This outline shows benefits and premiums of policies sold for
effective dates on or after June 1, 2010. Policies sold for effective
dates prior to June 1, 2010, have different benefits and premiums.
Plans E, H, I, and J are no longer available for sale.
READ YOUR POLICY VERY CAREFULLY
This is only an outline describing the most important features of
your Medicare supplement plan contract. This is not the plan contract
and only the actual contract provisions will control. You must read
the contract itself to understand all of the rights and duties of
both you and [insert the health care service plan's name].
RIGHT TO RETURN POLICY
If you find that you are not satisfied with your contract, you may
return it to [insert plan's address]. If you send the contract back
to us within 30 days after you receive it,
we will treat the contract as if it had never been
issued and return all of your payments.
POLICY REPLACEMENT
If you are replacing other health coverage, do NOT cancel it until
you have actually received your new contract and are sure you want
to keep it.
NOTICE
This contract may not fully cover all of your medical costs.
Neither [insert the health care service plan's name] nor its agents
are connected with Medicare.
This outline of coverage does not give all the details of Medicare
coverage. Contact your local social security office or consult "The
Medicare Handbook" for further details and limitations applicable to
Medicare.
COMPLETE ANSWERS ARE VERY IMPORTANT
When you fill out the application for the new contract, be sure to
answer truthfully and completely all questions about your medical
and health history. The company may cancel your contract and refuse
to pay any claims if you leave out or falsify important medical
information. [If the contract is guaranteed issue, this paragraph
need not appear.] Review the application carefully before you sign
it. Be certain that all information has been properly recorded. [The
charts displaying the features of each benefit plan offered by the
issuer shall use the uniform format and language shown in the charts
set forth in Section 17 of the Model Regulation to Implement the NAIC
Medicare Supplement Insurance Minimum Standards Model Act, as most
recently adopted by the National Association of Insurance
Commissioners. No more than four benefit plans may be shown on one
chart. For purposes of illustration, charts for each benefit plan are
set forth below. An issuer may use additional benefit plan
designations on these charts.]
[Include an explanation of any innovative benefits on the cover
page and in the chart, in a manner approved by the director.]
(k) Notwithstanding Section 1300.63.2 of Title 28 of the
California Code of Regulations, no issuer shall combine the evidence
of coverage and disclosure form into a single document relating to a
contract that supplements Medicare, or is advertised or represented
as a supplement to Medicare, with hospital or medical coverage.
(l) The director may adopt regulations to implement this article,
including, but not limited to, regulations that specify the required
information to be contained in the outline of coverage provided to
applicants pursuant to this section, including the format of tables,
charts, and other information.
(m) (1) Any health care service plan contract, other than a
Medicare supplement contract, a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Sec. 1395 et seq.), a disability income policy, or any other
contract identified in subdivision (b) of Section 1358.3, issued for
delivery in this state to persons eligible for Medicare, shall notify
enrollees under the contract that the contract is not a Medicare
supplement contract. The notice shall either be printed or attached
to the first page of the outline of coverage delivered to enrollees
under the contract, or if no outline of coverage is delivered, to the
first page of the contract delivered to enrollees. The notice shall
be in no less than 12-point type and shall contain the following
language:
"THIS CONTRACT IS NOT A MEDICARE SUPPLEMENT. If you are eligible
for Medicare, review the Guide to Health Insurance for People with
Medicare available from the company."
(2) Applications provided to persons eligible for Medicare for the
health insurance contracts described in paragraph (1) shall disclose
the extent to which the contract duplicates Medicare in a manner
required by the director. The disclosure statement shall be provided
as a part of, or together with, the application for the contract.
(n) A Medicare supplement contract that does not cover custodial
care shall, on the cover page of the outline of coverages, contain
the following statement in uppercase type: "THIS POLICY DOES NOT
COVER CUSTODIAL CARE IN A SKILLED NURSING CARE FACILITY."
(o) An issuer shall comply with all notice requirements of the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (P.L. 108-173).
SEC. 11. Section 1358.18 of the Health and Safety Code is amended
to read:
1358.18. In the interest of full and fair disclosure, and to
assure the availability of necessary consumer information to
potential subscribers or enrollees not possessing a special knowledge
of Medicare, health care service plans, or Medicare supplement
contracts, an issuer shall comply with the following provisions:
(a) Application forms shall include the following questions
designed to elicit information as to whether, as of the date of the
application, the applicant currently has Medicare supplement,
Medicare Advantage, Medi-Cal coverage, or another health insurance
policy or certificate or plan contract in force or whether a Medicare
supplement contract is intended to replace any other disability
policy or certificate, or plan contract, presently in force. A
supplementary application or other form to be signed by the applicant
and solicitor containing those questions and statements may be used.
"(Statements)
(1) You do not need more than one Medicare supplement policy or
contract.
(2) If you purchase this contract, you may want to evaluate your
existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medi-Cal or Medicaid
and may not need a Medicare supplement contract.
(4) If after purchasing this contract you become eligible for
Medi-Cal, the benefits and premiums under your Medicare supplement
contract can be suspended, if requested, during your entitlement to
benefits under Medi-Cal or Medicaid for 24 months. You must request
this suspension within 90 days of becoming eligible for Medi-Cal or
Medicaid. If you are no longer entitled to Medi-Cal or Medicaid, your
suspended Medicare supplement contract or if that is no longer
available, a substantially equivalent contract, will be reinstituted
if requested within 90 days of losing Medi-Cal or Medicaid
eligibility. If the Medicare supplement contract provided coverage
for outpatient prescription drugs and you enrolled in Medicare Part D
while your contract was suspended, the reinstituted contract will
not have outpatient prescription drug coverage, but will otherwise be
substantially equivalent to your coverage before the date of the
suspension.
(5) If you are eligible for, and have enrolled in, a Medicare
supplement contract by reason of disability and you later become
covered by an employer or union-based group health plan, the benefits
and premiums under your Medicare supplement contract can be
suspended, if requested, while you are covered under the employer or
union-based group health plan. If you suspend your Medicare
supplement contract under these circumstances and later lose your
employer or union-based group health plan, your suspended Medicare
supplement contract or if that is no longer available, a
substantially equivalent contract, will be reinstituted if requested
within 90 days of losing your employer or union-based group health
plan. If the Medicare supplement contract provided coverage for
outpatient prescription drugs and you enrolled in Medicare Part D
while your contract was suspended, the reinstituted contract will not
have outpatient prescription drug coverage, but will otherwise be
substantially equivalent to your coverage before the date of the
suspension.
(6) Counseling services are available in this state to provide
advice concerning your purchase of Medicare supplement coverage and
concerning medical assistance through the Medi-Cal or Medicaid
Program, including benefits as a qualified Medicare beneficiary (QMB)
and a specified low-income Medicare beneficiary (SLMB). Information
regarding counseling services may be obtained from the California
Department of Aging.
(Questions)
If you lost or are losing other health insurance coverage and
received a notice from your prior insurer saying you were eligible
for guaranteed issue of a Medicare supplement insurance contract or
that you had certain rights to buy such a contract, you may be
guaranteed acceptance in one or more of our Medicare supplement
plans. Please include a copy of the notice from your prior insurer
with your application. PLEASE ANSWER ALL QUESTIONS.
[Please mark Yes or No below with an "X."]
To the best of your knowledge,
(1) (a) Did you turn 65 years of age in the last 6 months
Yes____ No____
(b) Did you enroll in Medicare Part B in the last 6 months
Yes____ No____
(c) If yes, what is the effective date ___________________
(2) Are you covered for medical assistance through California's
Medi-Cal program
NOTE TO APPLICANT: If you have a share of cost under the Medi-Cal
program, please answer NO to this question.
Yes____ No____
If yes,
(a) Will Medi-Cal pay your premiums for this Medicare supplement
contract
Yes____ No____
(b) Do you receive benefits from Medi-Cal OTHER THAN payments
toward your Medicare Part B premium
Yes____ No____
(3) (a) If you had coverage from any Medicare plan other than
original Medicare within the past 63 days (for example, a Medicare
Advantage plan or a Medicare HMO or PPO), fill in your start and end
dates below. If you are still covered under this plan, leave "END"
blank.
START __/__/__ END __/__/__
(b) If you are still covered under the Medicare plan, do you
intend to replace your current coverage with this new Medicare
supplement contract
Yes____ No____
(c) Was this your first time in this type of Medicare plan
Yes____ No____
(d) Did you drop a Medicare supplement contract to enroll in the
Medicare plan
Yes____ No____
(4) (a) Do you have another Medicare supplement policy or
certificate or contract in force
Yes____ No____
(b) If so, with what company, and what plan do you have [optional
for Direct Mailers]
Yes____ No____
(c) If so, do you intend to replace your current Medicare
supplement policy or certificate or contract with this contract
Yes____ No____
(5) Have you had coverage under any other health insurance within
the past 63 days (For example, an employer, union, or individual
plan)
Yes____ No____
(a) If so, with what companies and what kind of policy
________________________________________________
________________________________________________
________________________________________________
________________________________________________
(b) What are your dates of coverage under the other policy
START __/__/__ END __/__/__
(If you are still covered under the other policy, leave "END"
blank).
(b) Solicitors shall list any other health insurance policies or
plan contracts they have sold to the applicant as follows:
(1) List policies and contracts sold that are still in force.
(2) List policies and contracts sold in the past five years that
are no longer in force.
(c) An issuer issuing Medicare supplement contracts without a
solicitor or solicitor firm (a direct response issuer) shall return
to the applicant, upon delivery of the contract, a copy of the
application or supplemental forms, signed by the applicant and
acknowledged by the issuer.
(d) 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 for delivery of the Medicare supplement contract, a notice
regarding replacement of Medicare supplement coverage. One copy of
the 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 contract the notice regarding replacement of
Medicare supplement coverage.
(e) The notice required by subdivision (d) for an issuer shall be
provided in substantially the following form in no less than 12-point
type:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE
SUPPLEMENT COVERAGE OR MEDICARE ADVANTAGE
(Company name and address)
SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE
According to [your application] [information you have furnished],
you intend to lapse or otherwise terminate an existing Medicare
supplement policy or contract or Medicare Advantage plan and replace
it with a contract to be issued by [Plan Name]. Your contract to be
issued by [Plan Name] will provide 30 days within which you may
decide without cost whether you desire to keep the contract. You
should review this new coverage carefully. Compare it with all
accident and sickness coverage you now have. Terminate your present
policy or contract only if, after due consideration, you find that
purchase of this Medicare supplement coverage is a wise decision.
STATEMENT TO APPLICANT BY PLAN, SOLICITOR, SOLICITOR FIRM, OR OTHER
REPRESENTATIVE:
(1) I have reviewed your current medical or health coverage. To
the best of my knowledge, the replacement of coverage involved in
this transaction does not duplicate coverage or, if applicable,
Medicare Advantage coverage because you intend to terminate your
existing Medicare supplement coverage or leave your Medicare
Advantage plan. The replacement contract is being purchased for the
following reason (check one):__ Additional benefits. __ No change in
benefits, but lower premiums or charges. __ Fewer benefits and lower
premiums or charges.__ Plan has outpatient prescription drug coverage
and applicant is enrolled in Medicare Part D.__ Disenrollment from a
Medicare Advantage plan. Reasons for disenrollment:__ Other. (please
specify) ________.
(2) If the issuer of the Medicare supplement contract being
applied for does not impose, or is otherwise prohibited from
imposing, preexisting condition limitations, please skip to statement
3 below. Health conditions that you may presently have (preexisting
conditions) may not be immediately or fully covered under the new
contract. This could result in denial or delay of a claim for
benefits under the new contract, whereas a similar claim might have
been payable under your present contract.
(3) State law provides that your replacement Medicare supplement
contract may not contain new preexisting conditions, waiting periods,
elimination periods, or probationary periods. The plan will waive
any time periods applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
coverage for similar benefits to the extent that time was spent
(depleted) under the original contract.
(4) If you still wish to terminate your present policy or contract
and replace it with new coverage, be certain to truthfully and
completely answer any and all questions on the application concerning
your medical and health history. Failure to include all material
medical information on an application requesting that information may
provide a basis for the plan to deny any future claims and to refund
your prepaid or periodic payment as though your contract had never
been in force. After the application has been completed and before
you sign it, review it carefully to be certain that all information
has been properly recorded.
(5) Do not cancel your present Medicare supplement coverage until
you have received your new contract and are sure you want to keep it.
_________________________________________________
(Signature of Solicitor, Solicitor Firm, or
Other
Representative)
(Typed Name and Address of Plan, Solicitor, or
Solicitor Firm)
_________________________________________________
(Applicant's Signature)
_________________________________________________
(Date)
(f) The application form or other consumer information for persons
eligible for Medicare and used by an issuer shall contain as an
attachment a Medicare supplement buyer's guide in the form approved
by the director. The application or other consumer information,
containing as an attachment the buyer's guide, shall be mailed or
delivered to each applicant applying for that coverage at or before
the time of application and, to establish compliance with this
subdivision, the issuer shall obtain an acknowledgment of receipt of
the attached buyer's guide from each applicant. No issuer shall make
use of or otherwise disseminate any buyer's guide that does not
accurately outline current Medicare supplement benefits. No issuer
shall be required to provide more than one copy of the buyer's guide
to any applicant.
(g) An issuer may comply with the requirement of this section in
the case of group contracts by causing the subscriber (1) to
disseminate copies of the disclosure form containing as an attachment
the buyer's guide to all persons eligible under the group contract
at the time those persons are offered the Medicare supplement plan,
and (2) collecting and forwarding to the issuer an acknowledgment of
receipt of the disclosure form containing as an attachment the buyer'
s guide from each enrollee.
(h) An issuer shall not require, request, or obtain health
information as part of the application process for an applicant who
is eligible for guaranteed issuance of, or open enrollment for, any
Medicare supplement coverage pursuant to Section 1358.11 or 1358.12,
except for purposes of paragraph (1) or (2) of subdivision (a) of
Section 1358.11 when the applicant is first enrolled in Medicare Part
B. The application form shall include a clear and conspicuous
statement that the applicant is not required to provide health
information during a period where guaranteed issue or open enrollment
applies, as specified in Section 1358.11 or 1358.12, except for
purposes of paragraph (1) or (2) of subdivision (a) of Section
1358.11 when the applicant is first enrolled in Medicare Part B, and
shall inform the applicant of those periods of guaranteed issuance of
Medicare supplement coverage. This subdivision shall not prohibit an
issuer from requiring proof of eligibility for a guaranteed issuance
of Medicare supplement coverage.
SEC. 12. Section 1358.20 of the Health and Safety Code is amended
to read:
1358.20. (a) An issuer, directly or through solicitors or other
representatives, shall do each of the following:
(1) Establish marketing procedures to ensure that any comparison
of Medicare supplement coverage by its solicitors or other
representatives will be fair and accurate.
(2) Establish marketing procedures to ensure that excessive
coverage is not sold or issued.
(3) Display prominently by type, stamp, or other appropriate
means, on the first page of the outline of coverage and contract, the
following:
"Notice to buyer: This Medicare supplement contract may not cover
all of your medical expenses."
(4) Inquire and otherwise make every reasonable effort to identify
whether a prospective applicant for a Medicare supplement contract
already has health care coverage and the types and amounts of that
coverage.
(5) Provide, on the application form for Medicare supplement
contracts, a statement that reads as follows: "A rate guide is
available that compares the policies sold by different insurers. You
can obtain a copy of this rate guide by calling the Department of
Managed Health Care's consumer toll-free telephone number
(1-888-HMO-2219), by calling the Health Insurance Counseling and
Advocacy Program (HICAP) toll-free telephone number (1-800-434-0222),
or by accessing the Department of Managed Health Care's Internet Web
site (www.dmhc.ca.gov)."
(6) Establish auditable procedures for verifying compliance with
this subdivision.
(b) In addition to the practices prohibited by this code or any
other law, the following acts and practices are prohibited:
(1) Twisting, which means knowingly making any misleading
representation or incomplete or fraudulent comparison of any
coverages or issuers for the purpose of inducing or tending to
induce, any person to lapse, forfeit, surrender, terminate, retain,
pledge, assign, borrow on, or convert any coverage or to take out
coverage with another plan or insurer.
(2) High pressure tactics, which means employing any method of
marketing having the effect of or tending to induce the purchase of
coverage through force, fright, threat, whether explicit or implied,
or undue pressure to purchase or recommend the purchase of coverage.
(3) Cold lead advertising, which means making use directly or
indirectly of any method of marketing that fails to disclose in a
conspicuous manner that a purpose of the method of marketing is the
solicitation of coverage and that contact will be made by a health
care service plan or its representative.
(c) The terms "Medicare supplement," "Medigap," "Medicare
Wrap-Around" and words of similar import shall not be used unless the
contract is issued in compliance with this article.
SEC. 13. Section 1358.24 is added to the Health and Safety Code,
to read:
1358.24. This section applies to all contracts that become
effective on or after May 21, 2009.
(a) In addition to the requirements set forth under Sections
1365.5 and 1374.7, an issuer of a Medicare supplement contract shall
adhere to the requirements imposed by the federal Genetic Information
Nondiscrimination Act of 2008 (Public Law 110-233), as follows:
(1) The issuer shall not deny or condition the issuance or
effectiveness of the contract, including the imposition of any
exclusion of benefits under the contract based on a preexisting
condition, on the basis of the genetic information with respect to
that individual or a family member of the individual.
(2) The issuer shall not discriminate in the pricing of the
contract, including the adjustment of prepaid or periodic charges, of
an individual on the basis of the genetic information with respect
to that individual or a family member of the individual.
(b) Nothing in subdivision (a) shall be construed to limit the
ability of an issuer, to the extent otherwise permitted by law, to do
any of the following:
(1) Deny or condition the issuance or effectiveness of the
contract or increase the prepaid or periodic charge for a group based
on the manifestation of a disease or disorder of an enrollee,
subscriber, or applicant.
(2) Increase the prepaid or periodic charge for any contract
issued to an individual based on the manifestation of a disease or
disorder of an individual who is covered under the contract. For
purposes of this paragraph, the manifestation of a disease or
disorder in one individual shall not also be used as genetic
information about other group members and to further increase the
prepaid or periodic charge for the group.
(c) An issuer of a Medicare supplement contract shall not request
or require an individual or a family member of that individual to
undergo a genetic test.
(d) Subdivision (c) shall not be construed to preclude an issuer
of a Medicare supplement contract 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 subdivision (a).
(e) For purposes of carrying out subdivision (d), an issuer of a
Medicare supplement contract may request only the minimum amount of
information necessary to accomplish the intended purpose.
(f) An issuer of a Medicare supplement contract shall not request,
require, seek, or purchase genetic information for underwriting
purposes.
(g) An issuer of a Medicare supplement contract shall not request,
require, seek, or purchase genetic information with respect to any
individual or a family member of that individual prior to the
individual's enrollment under the contract in connection with that
enrollment.
(h) If an issuer of a Medicare supplement contract obtains genetic
information incidental to the requesting, requiring, or purchasing
of other information concerning any individual or a family member of
that individual, the request, requirement, or purchase shall not be
considered a violation of subdivision (g) if the request,
requirement, or purchase is not in violation of subdivision (f).
However, the issuer shall not use any genetic information obtained
under this section for any prohibited purpose described in this
section or in Sections 1365.5 and 1374.7.
(i) For the purposes of this section, the following definitions
shall apply:
(1) "Issuer of a Medicare supplement contract" includes a
third-party administrator, or other person acting for or on behalf of
an issuer.
(2) "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 the individual.
(3) "Genetic information" means, with respect to any individual,
information about the individual's genetic tests, the genetic tests
of family members of the individual, and the manifestation of a
disease or disorder in family members of the individual. The 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 the individual or any family member of
the 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 that 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.
(4) "Genetic services" means a genetic test, genetic education,
genetic counseling, including obtaining, interpreting, or assessing
genetic information.
(5) "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.
(6) "Underwriting purposes" includes all of the following:
(A) Rules for, or determination of, eligibility, including
enrollment and continued eligibility, for benefits under the
contract.
(B) The computation of prepaid or periodic charges or contribution
amounts under the contract.
(C) The application of any preexisting condition exclusion under
the contract.
(D) Other activities related to the creation, renewal, or
replacement of a contract of health insurance or health benefits.
SEC. 14. Section 785 of the Insurance Code is amended to read:
785. (a) All insurers, brokers, agents, and others engaged in the
transaction of insurance owe a prospective insured who is 65 years
of age or older, a duty of honesty, good faith, and fair dealing.
This duty is in addition to any other duty, whether express or
implied, that may exist.
(b) Conduct of an insurer, broker, or agent, or other person
engaged in the transaction of insurance, during the offer and sale of
a policy or certificate previous to the purchase is relevant to any
action alleging a breach of the duty of good faith and fair dealing.
(c) Except where explicitly provided to the contrary, this article
shall not apply to any of the following:
(1) Medicare supplement insurance as defined in subdivision (m) of
Section 10192.4.
(2) Long-term care insurance as defined in Section 10231.2.
(3) Disability coverage provided through the insured's employer or
former employer.
(4) Disability insurance policies or certificates principally
designed to provide coverage for accidents or expenses incurred while
traveling if the premium for the policy or certificate is ten
dollars ($10) or less.
(5) Blanket disability insurance as defined in Section 10270.3.
(6) Credit disability insurance as defined in Section 779.2.
(7) Accidental death insurance.
(8) Until January 1, 2002, disability policies or certificates
that are sold through direct response methods of delivery.
(9) Disability income insurance as defined in subdivision (i) of
Section 799.01.
(d) Provided that the requirements of Section 10296 are met, this
article shall not apply to transportation ticket policies and baggage
insurance policy types allowable for sale by travel agents pursuant
to Section 1753.
SEC. 15. Section 10192.4 of the Insurance Code is amended to read:
10192.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) The person who seeks to contract for insurance benefits, in
the case of an individual Medicare supplement policy.
(2) The proposed certificate holder, in the case of a group
Medicare supplement policy.
(b) "Bankruptcy" means that situation in which 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.
(c) "Certificate" means a certificate issued for delivery in this
state under a group Medicare supplement policy.
(d) "Certificate form" means the form on which the certificate is
issued for delivery by the issuer.
(e) "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 63 days.
(f) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (Medicaid (known
as Medi-Cal in California)), other than coverage consisting solely of
benefits under Section 1928 of that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage only for accident or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "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:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract of insurance:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(g) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(h) "Insolvency" means when an issuer, licensed to transact the
business of insurance in this state, has had a final order of
liquidation entered against it with a finding of insolvency by a
court of competent jurisdiction in the issuer's state of domicile.
(i) "Issuer" includes insurance companies, fraternal benefit
societies, and any other entity delivering, or issuing for delivery,
Medicare supplement policies or certificates in this state, except
entities subject to Article 3.5 (commencing with Section 1358) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
(j) "Medi-Cal" means California's version of Medicaid under Title
XIX of the federal Social Security Act.
(k) "Medicare" means the Health Insurance for the Aged Act, Title
XVIII of the Social Security Amendments of 1965, as amended.
(l) "Medicare Advantage plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(m) "Medicare supplement policy" means a group or individual
policy of health insurance, other than a policy issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Section 1395mm) or an issued policy under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that 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 a Medicare Advantage
plan established under Medicare Part C, an outpatient prescription
drug plan established under Medicare Part D, or a health care
prepayment plan that provides benefits pursuant to an agreement under
subparagraph (A) of paragraph (1) of subsection (a) of Section 1833
of the Social Security Act.
(n) "Policy form" means the form on which the policy is issued for
delivery by the issuer.
(o) "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
July 21, 1992, and with an effective date 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.
(p) "2010 standardized Medicare supplement benefit plan," "2010
standardized benefit plan," or "2010 plan" means a group or
individual policy of Medicare supplement insurance issued with an
effective date on or after June 1, 2010.
(q) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 16. Section 10192.6 of the Insurance Code is amended to read:
10192.6. (a) Except for permitted preexisting condition clauses
as described in Sections 10192.7, 10192.8, and 10192.81, a policy or
certificate shall not be advertised, solicited, or issued for
delivery as a Medicare supplement policy if the policy or certificate
contains limitations or exclusions on coverage that are more
restrictive than those of Medicare.
(b) A Medicare supplement policy or certificate shall not use
waivers to exclude, limit, or reduce coverage or benefits for
specifically named or described preexisting diseases or physical
conditions.
(c) A Medicare supplement policy or certificate in force shall not
contain benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 10192.8, a Medicare supplement policy with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current policyholders, at the option of
the policyholder, who do not enroll in Medicare Part D.
(2) A Medicare supplement policy with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement policy
with benefits for outpatient prescription drugs shall not be renewed
after the policyholder enrolls in Medicare Part D unless both of the
following conditions exist:
(A) The policy is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
SEC. 17. Section 10192.8 of the Insurance Code is amended to read:
10192.8. The following standards are applicable to all Medicare
supplement policies or certificates advertised, solicited, or issued
for delivery on or after January 1, 2001, and with an effective date
prior to June 1, 2010. A policy or certificate shall not be
advertised, solicited, or issued for delivery as a Medicare
supplement policy or certificate unless it complies with these
benefit standards.
(a) The following general standards apply to Medicare supplement
policies and certificates and are in addition to all other
requirements of this article:
(1) 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 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.
(2) A Medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis
than losses resulting from accidents.
(3) 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 those changes.
(4) A Medicare supplement policy or certificate shall not 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.
(5) Each Medicare supplement policy shall be guaranteed renewable
or noncancelable.
(A) The issuer shall not cancel or nonrenew the policy solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the policy for any
reason other than nonpayment of premium or misrepresentation which is
shown by the issuer to be material to the acceptance for coverage.
The contestability period for Medicare supplement insurance shall be
two years.
(C) If the Medicare supplement policy is terminated by the master
policyholder and is not replaced as provided under subparagraph (E),
the issuer shall offer certificate holders an individual Medicare
supplement policy that, at the option of the certificate holder,
either provides for continuation of the benefits contained in the
group policy or provides for benefits that otherwise meet the
requirements of one of the standardized policies defined in this
article.
(D) If an individual is a certificate holder in a group Medicare
supplement policy and membership in the group is terminated, the
issuer shall either offer the certificate holder the conversion
opportunity described in subparagraph (C) or, at the option of the
group policyholder, shall offer the certificate holder continuation
of coverage under the group policy.
(E) (i) 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.
(ii) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate that has been in
force for six months or more, the replacing issuer shall not impose
an exclusion or limitation based on a preexisting condition. If the
original coverage has been in force for less than six months, the
replacing issuer shall waive any time period applicable to
preexisting conditions, waiting periods, elimination periods, or
probationary periods in the new policy or certificate to the extent
the time was spent under the original coverage.
(F) 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 (P.L. 108-173), the policy as modified as a result of that act
shall be deemed to satisfy the guaranteed renewal requirements of
this paragraph.
(6) Termination of a Medicare supplement policy or certificate
shall be without prejudice to any continuous loss that 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 shall not be
considered in determining a continuous loss.
(7) (A) (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 24 months, in which the
policyholder or certificate holder has applied for and is determined
to be entitled to Medi-Cal, but only if the policyholder or
certificate holder notifies the issuer of the policy or certificate
within 90 days after the date the individual becomes entitled to
assistance. Upon receipt of timely notice, the insurer shall return
directly to the insured that portion of the premium attributable to
the period of Medi-Cal eligibility, subject to adjustment for paid
claims. If suspension occurs and if the policyholder or certificate
holder loses entitlement to Medi-Cal, 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 90 days after the date of loss and pays the
premium attributable to the period, effective as of the date of
termination of entitlement, or equivalent coverage shall be provided
if the prior form is no longer available.
(ii) 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 any period that may be provided by federal regulation 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 the policyholder or certificate holder loses
coverage under the group health plan, the policy or certificate shall
be automatically reinstituted, effective as of the date of loss of
coverage if the policyholder provides notice within 90 days of the
date of the loss of coverage.
(B) Reinstitution of coverages:
(i) Shall not provide for any waiting period with respect to
treatment of preexisting conditions.
(ii) Shall provide for resumption of coverage that is
substantially equivalent to coverage in effect before the date of
suspension. If the suspended Medicare supplement policy provided
coverage for outpatient prescription drugs, reinstitution of the
policy for a Medicare Part D enrollee shall not include coverage for
outpatient prescription drugs but shall otherwise provide coverage
that is substantially equivalent to the coverage in effect before the
date of suspension.
(iii) 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.
(8) 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 Section 10192.9, to a 2010 standardized plan,
as described in Section 10192.91, the offer and subsequent exchange
shall comply with the following requirements:
(A) An issuer need not provide justification to the commissioner
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 that 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 shall be filed with the commissioner.
(B) The rating class of the new policy or certificate shall be the
class closest to the insured's class of the replaced coverage.
(C) An issuer shall not apply new preexisting 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 preexisting 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. This subparagraph shall not apply
to an applicant who is guaranteed issue under Section 10192.11 or
10192.12.
(D) 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.
(9) A Medicare supplement policy shall not limit coverage
exclusively to a single disease or affliction.
(b) With respect to the standards for basic (core) benefits for
benefit plans A to J, inclusive, every issuer 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. However, the benefits described in
paragraphs (6) and (7) shall not be offered so long as California is
required to disallow these benefits for Medicare beneficiaries by the
Centers for Medicare and Medicaid Services or other agent of the
federal government under Section 1395ss of Title 42 of the United
States Code.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day to the 90th day, inclusive, in any Medicare benefit period.
(2) 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.
(3) Upon exhaustion of the Medicare hospital inpatient coverage
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
appropriate Medicare standard of payment, subject to a lifetime
maximum benefit of an additional 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(4) 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.
(5) Coverage for the coinsurance amount, or in the case of
hospital outpatient department services, the copayment amount, of
Medicare eligible expenses under Part B regardless of hospital
confinement, subject to the Medicare Part B deductible.
(6) Coverage of the actual cost, up to the legally billed amount,
of an annual mammogram as provided in Section 10123.81, to the extent
not paid by Medicare.
(7) Coverage of the actual cost, up to the legally billed amount,
of an annual cervical cancer screening test as provided in Section
10123.18, to the extent not paid by Medicare.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B to J, inclusive, only as provided
by Section 10192.9.
(1) With respect to the Medicare Part A deductible, coverage for
all of the Medicare Part A inpatient hospital deductible amount per
benefit period.
(2) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(3) With respect to the Medicare Part B deductible, coverage for
all of the Medicare Part B deductible amount per calendar year
regardless of hospital confinement.
(4) With respect to 80 percent of the Medicare Part B excess
charges, coverage for 80 percent 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. If the insurer limits payment to a
limiting charge, the insurer has the burden to establish that amount
as the legal limit.
(5) With respect to 100 percent 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. If the insurer limits payment to a
limiting charge, the insurer has the burden to establish that amount
as the legal limit.
(6) With respect to the basic outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two hundred fifty dollar ($250) calendar year
deductible, to a maximum of one thousand two hundred fifty dollars
($1,250) in benefits received by the insured per calendar year, to
the extent not covered by Medicare. On and after January 1, 2006, no
Medicare supplement policy may be sold or issued if it includes a
prescription drug benefit.
(7) With respect to the extended outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two hundred fifty
dollar ($250) calendar year deductible, to a maximum of three
thousand dollars ($3,000) in benefits received by the insured per
calendar year, to the extent not covered by Medicare. On and after
January 1, 2006, no Medicare supplement policy may be sold or issued
if it includes a prescription drug benefit.
(8) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent 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 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of two hundred fifty
dollars ($250), and a lifetime maximum benefit of fifty thousand
dollars ($50,000). For purposes of this benefit, "emergency care"
shall mean care needed immediately because of an injury or an illness
of sudden and unexpected onset.
(9) With respect to the following, reimbursement shall be for the
actual charges up to 100 percent 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, up to a maximum of one hundred twenty dollars ($120)
annually under this benefit, however, this benefit shall not include
payment for any procedure covered by Medicare:
(A) An annual clinical preventive medical history and physical
examination that may include tests and services from subparagraph (B)
and patient education to address preventive health care measures.
(B) The following screening tests or preventive services that are
not covered by Medicare, the selection and frequency of which are
determined to be medically appropriate by the attending physician:
(i) Fecal occult blood test.
(ii) Mammogram.
(C) Influenza vaccine administered at any appropriate time during
the year.
(10) With respect to the at-home recovery benefit, coverage for
the actual charges up to forty dollars ($40) per visit and an annual
maximum of one thousand six hundred dollars ($1,600) per year to
provide short-term, at-home assistance with activities of daily
living for those recovering from an illness, injury, or surgery.
(A) For purposes of this benefit, the following definitions shall
apply:
(i) "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.
(ii) "Care provider" means a duly qualified or licensed home
health aide or homemaker, or a personal care aide or nurse provided
through a licensed home health care agency or referred by a licensed
referral agency or licensed nurses registry.
(iii) "Home" shall mean any place used by the insured as a place
of residence, provided that the 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.
(iv) "At-home recovery visit" means the period of a visit required
to provide at-home recovery care, without any limit on the duration
of the visit, except that each consecutive four hours in a 24-hour
period of services provided by a care provider is one visit.
(B) With respect to coverage requirements and limitations, the
following shall apply:
(i) At-home recovery services provided shall be primarily services
that assist in activities of daily living.
(ii) The insured's attending physician shall 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.
(iii) Coverage is limited to the following:
(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 ($40) per visit.
(III) One thousand six hundred dollars ($1,600) 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
subparagraph (A).
(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.
(C) Coverage is excluded for the following:
(i) Home care visits paid for by Medicare or other government
programs.
(ii) Care provided by family members, unpaid volunteers, or
providers who are not care providers.
(d) The standardized Medicare supplement benefit plan "K" shall
consist of the following benefits:
(1) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each day used from the 61st to the 90th day,
inclusive, in any Medicare benefit period.
(2) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each Medicare lifetime inpatient reserve day
used from the 91st to the 150th day, inclusive, in any Medicare
benefit period.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate, or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment for this benefit as payment in full and shall not bill the
insured for any balance.
(4) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (10) is met.
(5) With respect to skilled nursing facility care, coverage for 50
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (10)
is met.
(6) With respect to hospice care, coverage for 50 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (10) is
met.
(7) Coverage for 50 percent, 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 described in paragraph (10) is
met.
(8) Except for coverage provided in paragraph (9), coverage for 50
percent 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 (10).
(9) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services, after the policyholder pays the Medicare Part
B deductible.
(10) Coverage of 100 percent 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
($4,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the secretary.
(e) The standardized Medicare supplement benefit plan "L" shall
consist of the following benefits:
(1) The benefits described in paragraphs (1), (2), (3), and (9) of
subdivision (d).
(2) With respect to the Medicare Part A deductible, coverage for
75 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (8) is met.
(3) With respect to skilled nursing facility care, coverage for 75
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (8)
is met.
(4) With respect to hospice care, coverage for 75 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (8) is met.
(5) Coverage for 75 percent, 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 described in paragraph (8) is met.
(6) Except for coverage provided in paragraph (7), coverage for 75
percent of the cost sharing otherwise applicable under Medicare Part
B after the policyholder pays the Part B deductible until the
out-of-pocket limitation described in paragraph (8) is met.
(7) Coverage for 100 percent of the cost sharing for Medicare Part
B preventive services after the policyholder pays the Part B
deductible.
(8) Coverage of 100 percent of the cost sharing for 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 two thousand dollars ($2,000) in 2006,
indexed each year by the appropriate inflation adjustment specified
by the secretary.
(f) An issuer shall prominently indicate through text edits, or by
other means acceptable to the commissioner, an amendment made to a
Medicare supplement policy form that the department previously
approved on the basis that the amendment is consistent with this
section. The department may, in its discretion, restrict its review
to amendments made to Medicare supplement policy forms that have not
previously been found consistent with this section in order to
facilitate the availability of amended policy forms that are
consistent with the federal Medicare Modernization Act. The
department shall not restrict its review if the amendment makes
additional changes to the Medicare supplement policy form.
SEC. 18. Section 10192.81 is added to the Insurance Code, to read:
10192.81. The following standards are applicable to all Medicare
supplement policies or certificates delivered or issued for delivery
in this state with an effective date 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 with an effective date on or after June 1, 2010.
Benefit standards applicable to Medicare supplement policies and
certificates issued with an effective date prior to June 1, 2010,
remain subject to the requirements of Section 10192.8.
(a) The following general standards apply to Medicare supplement
policies and certificates and are in addition to all other
requirements of this article.
(1) 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 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.
(2) A Medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis
than losses resulting from accidents.
(3) 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 those changes.
(4) A Medicare supplement policy or certificate shall not 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.
(5) Each Medicare supplement policy shall be guaranteed renewable.
(A) The issuer shall not cancel or nonrenew the policy solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the policy for any
reason other than nonpayment of premium or material misrepresentation
which is shown by the issuer to be material to the acceptance for
coverage. The contestability period for Medicare supplement insurance
shall be two years, pursuant to Section 10350.2.
(C) If the Medicare supplement policy is terminated by the master
policyholder and is not replaced as provided under subparagraph (E),
the issuer shall offer certificate holders an individual Medicare
supplement policy which, at the option of the certificate holder,
does one of the following:
(i) Provides for continuation of the benefits contained in the
group policy.
(ii) Provides for benefits that otherwise meet the requirements of
one of the standardized policies defined in this article.
(D) If an individual is a certificate holder in a group Medicare
supplement policy and the individual terminates membership in the
group, the issuer shall do one of the following:
(i) Offer the certificate holder the conversion opportunity
described in subparagraph (C).
(ii) At the option of the group policyholder, offer the
certificate holder continuation of coverage under the group policy.
(E) (i) 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.
(ii) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate that has been in
force for six months or more, the replacing issuer shall not impose
an exclusion or limitation based on a preexisting condition. If the
original coverage has been in force for less than six months, the
replacing issuer shall waive any time period applicable to
preexisting conditions, waiting periods, elimination periods, or
probationary periods in the new policy or certificate to the extent
the time was spent under the original coverage.
(6) Termination of a Medicare supplement policy or certificate
shall be without prejudice to any continuous loss that 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 payment of the
maximum benefits. Receipt of Medicare Part D benefits shall not be
considered in determining a continuous loss.
(7) (A) (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 24 months, in which the
policyholder or certificate holder has applied for and is determined
to be entitled to medical assistance under Medi-Cal, but only if the
policyholder or certificate holder notifies the issuer of the policy
or certificate within 90 days after the date the individual becomes
entitled to assistance. Upon receipt of timely notice, the insurer
shall return directly to the insured that portion of the premium
attributable to the period of Medi-Cal eligibility, subject to
adjustment for paid claims.
(ii) If suspension occurs and if the policyholder or certificate
holder loses entitlement to medical assistance under Medi-Cal, 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 90 days after the date of loss
and pays the premium attributable to the period, effective as of the
date of termination of entitlement or equivalent coverage shall be
provided if the prior form is no longer available.
(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 90 days after the date of the loss and pays the
applicable premium.
(B) Reinstitution of coverages shall comply with all of the
following requirements:
(i) Not provide for any waiting period with respect to treatment
of preexisting conditions.
(ii) Provide for resumption of coverage that is substantially
equivalent to coverage in effect before the date of suspension.
(iii) 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.
(8) A Medicare supplement policy shall not limit coverage
exclusively to a single disease or affliction.
(9) A Medicare supplement policy shall provide an examination
period of 30 days after the receipt of the policy by the applicant
for purposes of review, during which time the applicant may return
the policy as described in subdivision (e) of Section 10192.17.
(b) With respect to the standards for basic (core) benefits for
benefit plans A, B, C, D, F, high deductible F, 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. However, the benefits described in
paragraphs (7) and (8) shall not be offered so long as California is
required to disallow these benefits for Medicare beneficiaries by the
centers for Medicare and Medicaid Services or other agent of the
federal government under Section 1395ss of Title 42 of the United
States Code.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day through the 90th day, inclusive, in any Medicare benefit period.
(2) 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.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent 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 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(4) 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.
(5) 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.
(6) Coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(7) Coverage of the actual cost, up to the legally billed amount,
of an annual mammogram as provided in Section 10123.81, to the extent
not paid by Medicare.
(8) Coverage of the actual cost, up to the legally billed amount,
of an annual cervical cancer screening test as provided in Section
10123.18, to the extent not paid by Medicare.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B, C, D, F, high deductible F, G,
M, and N, consistent with the plan type and benefits for each plan as
provided in Section 10192.91:
(1) With respect to the Medicare Part A deductible, coverage for
100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(2) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(3) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day through the 100th day in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(4) With respect to the Medicare Part B deductible, coverage for
100 percent of the Medicare Part B deductible amount per calendar
year regardless of hospital confinement.
(5) With respect to 100 percent 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.
(6) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent 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 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of $250, and a lifetime
maximum benefit of $50,000. For purposes of this benefit, "emergency
care" shall mean care needed immediately because of an injury or an
illness of sudden and unexpected onset.
SEC. 19. Section 10192.9 of the Insurance Code is amended to read:
10192.9. The following standards are applicable to all Medicare
supplement policies or certificates delivered or issued for delivery
in this state on or after July 1, 1992, and with an effective date
prior to June 1, 2010.
(a) 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 subdivision
(b) of Section 10192.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 10192.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to L,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 10192.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 10192.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 10192.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
10192.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, 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 (1), (2), (3), and (8) of
subdivision (c) of Section 10192.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, 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 (1), (2), (8), and (10) of subdivision (c)
of Section 10192.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, 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 (1), (2), (8), and (9) of subdivision (c) of
Section 10192.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary
emergency care in a foreign country as defined in paragraphs (1),
(2), (3), (5), and (8) of subdivision (c) of Section 10192.8,
respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country
as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision
(c) of Section 10192.8, 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
one thousand five hundred dollars ($1,500) for 1998 and 1999, and
shall be based on the calendar year, as adjusted annually thereafter
by the secretary to reflect the change in the Consumer Price Index
for all urban consumers for the 12-month period ending with August of
the preceding year, and rounded to the nearest multiple of ten
dollars ($10).
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent 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 (1), (2), (4), (8), and (10) of subdivision (c) of Section
10192.8, respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
subdivision (c) of Section 10192.8, respectively. The outpatient
prescription drug benefit shall not be included in a Medicare
supplement policy sold on or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 10192.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement policy sold on or after January 1,
2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 10192.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement policy sold on or after January 1,
2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent 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 (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 10192.8,
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 one thousand five hundred dollars ($1,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars ($10). The outpatient prescription drug
benefit shall not be included in a Medicare supplement policy sold on
or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
10192.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
10192.8.
(f) An issuer may, with the prior approval of the commissioner,
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, that are not otherwise available and
that are cost-effective and offered in a manner that is consistent
with the goal of simplification of Medicare supplement policies. On
and after January 1, 2006, the innovative benefit shall not include
an outpatient prescription drug benefit.
SEC. 20. Section 10192.91 is added to the Insurance Code, to read:
10192.91. The following standards are applicable to all Medicare
supplement policies or certificates delivered or issued for delivery
in this state with an effective date 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 before June 1, 2010,
remain subject to the requirements of Section 10192.9.
(a) (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 subdivision
(b) of Section 10192.81.
(2) If an issuer makes available any of the additional benefits
described in subdivision (c) of Section 10192.81, or offers
standardized benefit plans K or L, as described in paragraphs (8) and
(9) of subdivision (e), 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 paragraph (1), a policy form or certificate form
containing either standardized benefit plan C, as described in
paragraph (3) of subdivision (e), or standardized benefit plan F, as
described in paragraph (5) of subdivision (e).
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted in subdivision (f)
and by Section 10192.10.
(c) Benefit plans shall be uniform in structure, language,
designation, and format to the standard benefit plans listed in
subdivision (e) and conform to the definitions in Section 10192.4.
Each benefit shall be structured in accordance with the format
provided in subdivisions (b) and (c) of Section 10192.81; or, in the
case of plan K or L, in paragraph (8) or (9) of subdivision (e) and
list the benefits in the order shown in subdivision (e). For purposes
of this section, "structure, language, and format" means style,
arrangement, and overall content of a benefit.
(d) In addition to the benefit plan designations required in
subdivision (c), an issuer may use other designations to the extent
permitted by law.
(e) With respect to the makeup of 2010 standardized benefit plans,
the following shall apply:
(1) Standardized Medicare supplement benefit plan A shall include
only the basic (core) benefits as defined in subdivision (b) of
Section 10192.81.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible as defined in paragraph (1) of subdivision (c) of
Section 10192.81.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, 100 percent of the
Medicare Part B deductible, and medically necessary emergency care
in a foreign country, as defined in paragraphs (1), (3), (4), and (6)
of subdivision (c) of Section 10192.81, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the basic (core) benefit, as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (1), (3), and (6) of subdivision (c) of Section 10192.81,
respectively.
(5) Standardized Medicare supplement benefit plan F shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible, the skilled nursing facility care, 100 percent of
the Medicare Part B deductible, 100 percent of the Medicare Part B
excess charges, and medically necessary emergency care in a foreign
country as defined in paragraphs (1), (3), (4), (5), and (6) of
subdivision (c) of Section 10192.81, respectively.
(6) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual deductible set forth in
subparagraph (B).
(A) The covered expenses include the basic (core) benefit as
defined in subdivision (b) of Section 10192.81, plus 100 percent of
the Medicare Part A deductible, skilled nursing facility care, 100
percent of the Medicare Part B deductible, 100 percent of the
Medicare Part B excess charges, and medically necessary emergency
care in a foreign country, as defined in paragraphs (1), (3), (4),
(5), and (6) of subdivision (c) of Section 10192.81, respectively.
(B) The annual deductible in high deductible plan F shall consist
of out-of-pocket expenses, other than premiums, for services covered
by 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 ($1,500) and shall be adjusted annually from 1999 by
the Secretary of the United States Department of Health and Human
Services to reflect the change in the Consumer Price Index for all
urban consumers for the 12-month period ending with August of the
preceding year, and rounded to the nearest multiple of ten dollars
($10).
(7) Standardized Medicare supplement benefit plan G shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, and medically necessary emergency
care in a foreign country, as defined in paragraphs (1), (3), (5),
and (6) of subdivision (c) of Section 10192.81, respectively.
(8) Standardized Medicare supplement benefit plan K shall include
only the following:
(A) Coverage of 100 percent of the Part A hospital coinsurance
amount for each day used from the 61st through the 90th day in any
Medicare benefit period.
(B) Coverage of 100 percent of the Part A hospital coinsurance
amount for each Medicare lifetime inpatient reserve day used from the
91st through the 150th day in any Medicare benefit period.
(C) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent 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 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(D) Coverage for 50 percent of the Medicare Part A inpatient
hospital deductible amount per benefit period until the out-of-pocket
limitation is met as described in subparagraph (J).
(E) Coverage for 50 percent of the coinsurance amount for each day
used from the 21st day through the 100th day in a Medicare benefit
period for posthospital skilled nursing facility care eligible under
Medicare Part A until the out-of-pocket limitation is met as
described in subparagraph (J).
(F) Coverage for 50 percent of cost sharing for all Part A
Medicare eligible expenses and respite care until the out-of-pocket
limitation is met as described in subparagraph (J).
(G) Coverage for 50 percent, 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 in
subparagraph (J).
(H) Except for coverage provided in subparagraph (I), coverage for
50 percent 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 subparagraph (J).
(I) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services after the policyholder pays the Part B
deductible.
(J) Coverage of 100 percent 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
($4,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the Secretary of the United States Department
of Health and Human Services.
(9) Standardized Medicare supplement benefit plan L shall include
only the following:
(A) The benefits described in subparagraphs (A), (B), (C), and (I)
of paragraph (8).
(B) The benefit described in subparagraphs (D), (E), (F), (G), and
(H) of paragraph (8), but substituting 75 percent for 50 percent.
(C) The benefit described in subparagraph (J) of paragraph (8),
but substituting two thousand dollars ($2,000) for four thousand
dollars ($4,000).
(10) Standardized Medicare supplement benefit plan M shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 50 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (2), (3), and (6) of subdivision (c) of Section 10192.81,
respectively.
(11) Standardized Medicare supplement benefit plan N shall include
only the following: the basic (core) benefit as defined in
subdivision (b) of Section 10192.81, plus 100 percent of the Medicare
Part A deductible, skilled nursing facility care, and medically
necessary emergency care in a foreign country, as defined in
paragraphs (1), (3), and (6) of subdivision (c) of Section 10192.81,
respectively, with copayments in the following amounts:
(A) The lesser of twenty dollars ($20) or the Medicare Part B
coinsurance or copayment for each covered health care provider office
visit, including visits to medical specialists.
(B) The lesser of fifty dollars ($50) 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.
(f) An issuer may, with the prior approval of the commissioner,
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 shall 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.
SEC. 21. Section 10192.11 of the Insurance Code is amended to
read:
10192.11. (a) (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,
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
65 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 this subdivision and who are 65 years of age or
older.
(2) An issuer shall make available Medicare supplement benefit
plans A, B, C, and F, if currently available, to an applicant who
qualifies under this subdivision who is 64 years of age or younger
and who does not have end-stage renal disease. An issuer shall also
make available to those applicants, Medicare supplement benefit plan
H, I, or J, if currently available, and commencing January 1, 2007,
shall make available to them Medicare supplement benefit plan K or L,
if currently available. The selection among Medicare supplement plan
H, I, or J and the selection between Medicare supplement benefit
plan K or L shall be made at the issuer's discretion.
(3) This section and Section 10192.12 do not prohibit an issuer in
determining premium rates from treating applicants who are under 65
years of age and are eligible for Medicare Part B as a separate risk
classification. This section shall not be construed as preventing the
exclusion of benefits for preexisting conditions as defined in
paragraph (1) of subdivision (a) of Section 10192.8 or paragraph (1)
of subdivision (a) of Section 10192.81.
(b) (1) If an applicant qualifies under subdivision (a) and
submits an application during the time period referenced in
subdivision (a) 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.
(2) If the applicant qualifies under subdivision (a) and submits
an application during the time period referenced in subdivision (a)
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 manner of the reduction
under this subdivision shall be as specified by the commissioner.
(c) Except as provided in subdivision (b) and Section 10192.23,
subdivision (a) 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.
(d) An individual enrolled in Medicare by reason of disability
shall be entitled to open enrollment described in this section for
six months after the date of his or her enrollment in Medicare Part
B, or if notified retroactively of his or her eligibility for
Medicare, for six months following notice of eligibility. Every
issuer shall make available to every applicant qualified for open
enrollment all policies and certificates offered by that issuer at
the time of application. Issuers shall not discourage sales during
the open enrollment period by any means, including the altering of
the commission structure.
(e) (1) An individual enrolled in Medicare Part B is entitled to
open enrollment described in this section for six months following:
(A) Receipt of a notice of termination or, if no notice is
received, the effective date of termination from any
employer-sponsored health plan including an employer-sponsored
retiree health plan.
(B) Receipt of a notice of loss of eligibility due to the divorce
or death of a spouse or, if no notice is received, the effective date
of loss of eligibility due to the divorce or death of a spouse, from
any employer-sponsored health plan including an employer-sponsored
retiree health plan.
(C) Termination of health care services for a military retiree or
the retiree's Medicare eligible spouse or dependent as a result of a
military base closure or loss of access to health care services
because the base no longer offers services or because the individual
relocates.
(2) For purposes of this subdivision, "employer-sponsored retiree
health plan" includes any coverage for medical expenses, including,
but not limited to, coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) and the California Continuation
Benefits Replacement Act (Cal-COBRA), that is directly or indirectly
sponsored or established by an employer for employees or retirees,
their spouses, dependents, or other included insureds.
(f) An individual enrolled in Medicare Part B is entitled to open
enrollment described in this section if the individual was covered
under a policy, certificate, or contract providing Medicare
supplement coverage but that coverage terminated because the
individual established residence at a location not served by the
plan.
(g) An individual whose coverage was terminated by a Medicare
Advantage plan shall be entitled to an additional 60-day open
enrollment period to be added on to and run consecutively after any
open enrollment period authorized by federal law or regulation, for
any Medicare supplement coverage provided by Medicare supplement
issuers and available on a guaranteed basis under state and federal
law or regulation for persons terminated by their Medicare Advantage
plan.
(h) (1) An individual shall be entitled to an annual open
enrollment period lasting 30 days or more, commencing with the
individual's birthday, during which time that person may purchase any
Medicare supplement policy that offers benefits equal to or lesser
than those provided by the previous coverage. During this open
enrollment period, no issuer that falls under this provision shall
deny or condition the issuance or effectiveness of Medicare
supplement coverage, nor discriminate in the pricing of coverage,
because of health status, claims experience, receipt of health care,
or medical condition of the individual if, at the time of the open
enrollment period, the individual is covered under another Medicare
supplement policy or contract. An issuer shall notify a policyholder
of his or her rights under this subdivision at least 30 and no more
than 60 days before the beginning of the open enrollment period.
(2) For purposes of this subdivision, the following provisions
shall apply:
(A) A 1990 standardized Medicare supplement benefit plan A shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan A.
(B) A 1990 standardized Medicare supplement benefit plan B shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan B.
(C) A 1990 standardized Medicare supplement benefit plan C shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan C.
(D) A 1990 standardized Medicare supplement benefit plan D shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan D.
(E) A 1990 standardized Medicare supplement benefit plan E shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare benefit plan D.
(F) (i) A 1990 standardized Medicare supplement benefit plan F
shall be deemed to offer benefits equal to those provided by a 2010
standardized Medicare benefit plan F.
(ii) A 1990 standardized Medicare supplement benefit high
deductible plan F shall be deemed to offer benefits equal to those
provided by a 2010 standardized Medicare supplement benefit high
deductible plan F.
(G) A 1990 standardized Medicare supplement benefit plan G shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan G.
(H) A 1990 standardized Medicare supplement benefit plan H shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan D.
(I) A 1990 standardized Medicare supplement benefit plan I shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan G.
(J) (i) A 1990 standardized Medicare supplement benefit plan J
shall be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan F.
(ii) A 1990 standardized Medicare supplement benefit high
deductible plan J shall be deemed to offer benefits equal to those
provided by a 2010 standardized Medicare supplement benefit high
deductible plan F.
(K) A 1990 standardized Medicare supplement benefit plan K shall
be deemed to offer benefits equal to those provided by a 2010
standardized Medicare supplement benefit plan K.
(L) A 1990 standardized Medicare supplement
benefit plan L shall be deemed to offer benefits equal to those
provided by a 2010 standardized Medicare supplement benefit plan L.
(i) An individual enrolled in Medicare Part B is entitled to open
enrollment described in this section upon being notified that,
because of an increase in the individual's income or assets, he or
she meets one of the following requirements:
(1) He or she is no longer eligible for Medi-Cal benefits.
(2) He or she is only eligible for Medi-Cal benefits with a share
of cost and certifies at the time of application that he or she has
not met the share of cost.
SEC. 22. Section 10192.12 of the Insurance Code is amended to
read:
10192.12. (a) (1) With respect to the guaranteed issue of a
Medicare supplement policy, eligible persons are those individuals
described in subdivision (b) who seek to enroll under the policy
during the period specified in subdivision (c), and who submit
evidence of the date of termination or disenrollment or enrollment in
Medicare Part D with the application for a Medicare supplement
policy.
(2) With respect to eligible persons, an issuer shall not take any
of the following actions:
(A) Deny or condition the issuance or effectiveness of a Medicare
supplement policy described in subdivision (e) that is offered and is
available for issuance to new enrollees by the issuer.
(B) Discriminate in the pricing of that Medicare supplement policy
because of health status, claims experience, receipt of health care,
or medical condition.
(C) Impose an exclusion of benefits based on a preexisting
condition under that Medicare supplement policy.
(b) An eligible person is an individual described in any of the
following paragraphs:
(1) The individual is enrolled under an employee welfare benefit
plan that provides health benefits that supplement the benefits under
Medicare and either of the following apply:
(A) The plan either terminates or ceases to provide all of those
supplemental health benefits to the individual.
(B) The employer no longer provides the individual with insurance
that covers all of the payment for the 20-percent coinsurance.
(2) The individual is enrolled with a Medicare Advantage
organization under a Medicare Advantage plan under Medicare Part C,
and any of the following circumstances apply:
(A) The certification of the organization or plan has been
terminated.
(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. Those changes in
circumstances shall not include 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 Medicare Advantage plan in which the individual is
enrolled reduces any of its benefits or increases the amount of cost
sharing or discontinues for other than good cause relating to quality
of care, its relationship or contract under the plan with a provider
who is currently furnishing services to the individual. An
individual shall be eligible under this subparagraph for a Medicare
supplement policy issued by the same issuer through which the
individual was enrolled at the time the reduction, increase, or
discontinuance described above occurs or, commencing January 1, 2007,
for one issued by a subsidiary of the parent company of that issuer
or by a network that contracts with the parent company of that
issuer.
(E) The individual demonstrates, in accordance with guidelines
established by the secretary, either of the following:
(i) The organization offering the plan substantially violated a
material provision of the organization's contract under this article
in relation to the individual, including the failure to provide on a
timely basis medically necessary care for which benefits are
available under the plan or the failure to provide the covered care
in accordance with applicable quality standards.
(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.
(F) The individual meets other exceptional conditions as the
secretary may provide.
(3) The individual is 65 years of age or older, is enrolled with a
Program of All-Inclusive Care for the Elderly (PACE) provider under
Section 1894 of the Social Security Act, and circumstances similar to
those described in paragraph (2) exist that would permit
discontinuance of the individual's enrollment with the provider, if
the individual were enrolled in a Medicare Advantage plan.
(4) The individual meets both of the following conditions:
(A) The individual is enrolled with any of the following:
(i) An eligible organization under a contract under Section 1876
of the Social Security Act (Medicare cost).
(ii) A similar organization operating under demonstration project
authority, effective for periods before April 1, 1999.
(iii) An organization under an agreement under Section 1833(a)(1)
(A) of the Social Security Act (health care prepayment plan).
(iv) An organization under a Medicare Select policy.
(B) The enrollment ceases under the same circumstances that would
permit discontinuance of an individual's election of coverage under
paragraph (2) or (3).
(5) The individual is enrolled under a Medicare supplement policy,
and the enrollment ceases because of any of the following
circumstances:
(A) The insolvency of the issuer or bankruptcy of the nonissuer
organization, or other involuntary termination of coverage or
enrollment under the policy.
(B) The issuer of the policy substantially violated a material
provision of the policy.
(C) 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.
(6) The individual meets both of the following conditions:
(A) 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 Medicare Part C, any eligible organization under
a contract under Section 1876 of the Social Security Act (Medicare
cost), any similar organization operating under demonstration project
authority, any PACE provider under Section 1894 of the Social
Security Act, or a Medicare Select policy.
(B) The subsequent enrollment under subparagraph (A) is terminated
by the individual during any period within the first 12 months of
the subsequent enrollment (during which the enrollee is permitted to
terminate the subsequent enrollment under Section 1851(e) of the
federal Social Security Act).
(7) The individual upon first becoming eligible for benefits under
Medicare Part A at 65 years of age, enrolls in a Medicare Advantage
plan under Medicare Part C or with a PACE provider under Section 1894
of the Social Security Act, and disenrolls from the plan or program
not later than 12 months after the effective date of enrollment.
(8) The individual while enrolled under a Medicare supplement
policy that covers outpatient prescription drugs enrolls in a
Medicare Part D plan during the initial enrollment period, 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 (4) of subdivision (e).
(c) (1) In the case of an individual described in paragraph (1) of
subdivision (b), the guaranteed issue period begins on the later of
the following two dates and ends on the date that is 63 days after
the date the applicable coverage terminates:
(A) The date the individual receives a notice of termination or
cessation of all supplemental health benefits or, if no notice is
received, the date of the notice denying a claim because of a
termination or cessation of benefits.
(B) The date that the applicable coverage terminates or ceases.
(2) In the case of an individual described in paragraphs (2), (3),
(4), (6), and (7) of subdivision (b) whose enrollment is terminated
involuntarily, the guaranteed issue period begins on the date that
the individual receives a notice of termination and ends 63 days
after the date the applicable coverage is terminated.
(3) In the case of an individual described in subparagraph (A) of
paragraph (5) of subdivision (b), the guaranteed issue period begins
on the earlier of the following two dates and ends on the date that
is 63 days after the date the coverage is terminated:
(A) The date that the individual receives a notice of termination,
a notice of the issuer's bankruptcy or insolvency, or other similar
notice if any.
(B) The date that the applicable coverage is terminated.
(4) In the case of an individual described in paragraph (2), (3),
(6), or (7) of, or in subparagraph (B) or (C) of paragraph (5) of,
subdivision (b) who disenrolls voluntarily, the guaranteed issue
period begins on the date that is 60 days before the effective date
of the disenrollment and ends on the date that is 63 days after the
effective date of the disenrollment.
(5) In the case of an individual described in paragraph (8) of
subdivision (b), 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
60-day period immediately preceding the initial enrollment period for
Medicare Part D and ends on the date that is 63 days after the
effective date of the individual's coverage under Medicare Part D.
(6) In the case of an individual described in subdivision (b) who
is not included in this subdivision, the guaranteed issue period
begins on the effective date of disenrollment and ends on the date
that is 63 days after the effective date of disenrollment.
(d) (1) In the case of an individual described in paragraph (6) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b) is
involuntarily terminated within the first 12 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 (6) of subdivision
(b).
(2) In the case of an individual described in paragraph (7) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with a plan or in a program described in
paragraph (7) of subdivision (b) is involuntarily terminated within
the first 12 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 (7) of subdivision (b).
(3) For purposes of paragraphs (6) and (7) of subdivision (b), an
enrollment of an individual with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b), or
with a plan or in a program described in paragraph (7) of
subdivision (b) shall not 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.
(e) (1) Under paragraphs (1), (2), (3), (4), and (5) of
subdivision (b), an eligible individual is entitled to a Medicare
supplement policy that has a benefit package classified as Plan A, B,
C, F (including a high deductible Plan F), K, or L offered by any
issuer.
(2) (A) Under paragraph (6) of subdivision (b), an eligible
individual is entitled to the same Medicare supplement policy in
which he or she was most recently enrolled, if available from the
same issuer. If that policy is not available, the eligible individual
is entitled to a Medicare supplement policy that has a benefit
package classified as Plan A, B, C, F (including a high deductible
Plan F), K, or L offered by any issuer.
(B) On and after January 1, 2006, an eligible individual described
in this paragraph who was most recently enrolled in a Medicare
supplement policy with an outpatient prescription drug benefit, is
entitled to a Medicare supplement policy that is available from the
same issuer but without an outpatient prescription drug benefit or,
at the election of the individual, has a benefit package classified
as a Plan A, B, C, F (including high deductible Plan F), K, or L that
is offered by any issuer.
(3) Under paragraph (7) of subdivision (b), an eligible individual
is entitled to any Medicare supplement policy offered by any issuer.
(4) Under paragraph (8) of subdivision (b), an eligible individual
is entitled to a Medicare supplement policy that has a benefit
package classified as Plan A, B, C, F (including a high deductible
Plan F), K, or L and that is offered and is available for issuance to
a new enrollee by the same issuer that issued the individual's
Medicare supplement policy with outpatient prescription drug
coverage.
(f) (1) At the time of an event described in subdivision (b) by
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
this section and of the obligations of issuers of Medicare supplement
policies under subdivision (a). The notice shall be communicated
contemporaneously with the notification of termination.
(2) At the time of an event described in subdivision (b) by 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
this section, and of the obligations of issuers of Medicare
supplement policies under subdivision (a). The notice shall be
communicated within 10 working days of the date the issuer received
notification of disenrollment.
(g) An issuer shall refund any unearned premium that an insured
paid in advance and shall terminate coverage upon the request of an
insured.
SEC. 23. Section 10192.13 of the Insurance Code is amended to
read:
10192.13. (a) An issuer shall comply with Section 1882(c)(3) of
the federal Social Security Act (as enacted by Section 4081(b)(2)(C)
of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA),
Public Law 100-203) by doing all of the following and by certifying
compliance on the Medicare supplement insurance experience reporting
form:
(1) Accepting a notice from a Medicare Administrative Contractor,
formerly known as a fiscal intermediary or 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.
(2) Notifying the participating physician or supplier and the
beneficiary of the payment determination.
(3) Paying the participating physician or supplier directly.
(4) 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 Medicare Administrative Contractors may be
sent.
(5) Paying user fees for claim notices that are transmitted
electronically or otherwise.
(6) Providing to the secretary, at least annually, a central
mailing address to which all claims may be sent by Medicare
Administrative Contractors.
(7) File, by June 30 of each year, with the commissioner a list of
its Medicare supplement policies and certificates offered or issued
or in force in California as of the end of the previous year.
(A) The list shall identify the issuer by name and address, shall
identify each type of form it offers by name and form number, and
shall differentiate between forms approved in the previous calendar
year and those approved before the previous calendar year.
(B) The list shall identify all of the following:
(i) Forms issued and in force but no longer offered in California.
(ii) Forms that, for any reason, were not filed and approved by
the commissioner.
(iii) Forms for which the commissioner's approval was withdrawn
within the previous calendar year.
(iv) The number of forms issued in California in the previous
calendar year, and the number of forms in force in California on
December 31 of the previous calendar year.
(b) (1) Compliance with the requirements set forth in subdivision
(a) shall be certified on the Medicare supplement insurance
experience reporting form provided by the commissioner.
(2) The commissioner shall, by September 1 of each year, provide
the secretary with a list identifying each issuer by name and address
and provide the information requested in this section.
(c) No issuer that administers Medicare coverage and federal
employee programs may require that more than one form be submitted
per claim in order to receive payment or reimbursement under any or
all of those policies or programs.
SEC. 24. Section 10192.17 of the Insurance Code is amended to
read:
10192.17. (a) Medicare supplement policies and certificates shall
include a renewal, continuation, or conversion provision. The
language or specifications of the 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
policyholder's age.
(b) 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, or is
required to reduce or eliminate benefits to avoid duplication of
Medicare benefits, all riders or endorsements added to a Medicare
supplement policy after the date of issue or upon reinstatement or
renewal that reduce or eliminate benefits or coverage in the policy
shall require a signed acceptance by the insured. After the date of
policy or certificate issue, any rider or endorsement that 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. If 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, those limitations
shall appear as a separate paragraph of the policy and be labeled as
"Preexisting Condition Limitations."
(e) (1) Medicare supplement policies and certificates shall have a
notice prominently printed on the first page of the policy or
certificate, and of the outline of coverage, or attached thereto, in
no less than 10-point uppercase type, stating in substance that the
policyholder or certificate holder shall have the right to return the
policy or certificate, via regular mail, within 30 days of receiving
it, and to have the full premium refunded if, after examination of
the policy or certificate, the insured person is not satisfied for
any reason. The return shall void the contract from the beginning,
and the parties shall be in the same position as if no contract had
been issued.
(2) For purposes of this section, a timely manner shall be no
later than 30 days after the issuer receives the returned contract.
(3) If the issuer fails to refund all prepaid or periodic charges
paid in a timely manner, then the applicant shall receive interest on
the paid charges at the legal rate of interest on judgments as
provided in Section 685.010 of the Code of Civil Procedure. The
interest shall be paid from the date the issuer received the returned
contract.
(f) (1) Issuers of health insurance policies, certificates, or
contracts that provide hospital or medical expense coverage on an
expense incurred or indemnity basis, other than incidentally, to
persons 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 and
in a type size no smaller than 12-point type. Delivery of the guide
shall be made whether or not the policies or certificates are
advertised, solicited, or issued for delivery as Medicare supplement
policies or certificates as defined in this article. Except in the
case of direct response issuers, delivery of the guide shall be made
to the applicant at the time of application, and acknowledgment 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.
(2) For the purposes of this section, "form" means the language,
format, type size, type proportional spacing, bold character, and
line spacing.
(g) As soon as practicable, but no later than 30 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 commissioner. The notice
shall include both of the following:
(1) 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.
(2) Inform each policyholder or certificate holder as to when any
premium adjustment is to be made due to changes in Medicare.
(h) 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.
(i) The notices shall not contain or be accompanied by any
solicitation.
(j) (1) 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
acknowledgment of receipt of the outline from the applicant. 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 require revision of the outline, a substitute outline of
coverage properly describing the policy or certificate shall
accompany the policy or certificate when it is delivered and contain
the following statement, in no less than 12-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."
(2) The outline of coverage provided to applicants pursuant to
this section 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 and format prescribed below in no less than
12-point type. All Medicare supplement plans authorized by federal
law shall be shown on the cover page, and the plans 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.
(3) The commissioner may adopt regulations to implement this
article, including, but not limited to, regulations that specify the
required information to be contained in the outline of coverage
provided to applicants pursuant to this section, including the format
of tables, charts, and other information.
(k) (1) Any disability insurance policy or certificate, a basic,
catastrophic or major medical expense policy, or single premium
nonrenewal policy or certificate issued to persons eligible for
Medicare, other than a Medicare supplement policy, a policy issued
pursuant to a contract under Section 1876 of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.), a disability income
policy, or any other policy identified in subdivision (b) of Section
10192.3, advertised, solicited, or 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 12-point type and shall contain the following
language:
"THIS [POLICY OR CERTIFICATE] IS NOT A MEDICARE SUPPLEMENT [POLICY
OR CONTRACT]. If you are eligible for Medicare, review the Guide to
Health Insurance for People with Medicare available from the company."
(2) Applications provided to persons eligible for Medicare for the
disability insurance policies or certificates described in paragraph
(1) shall disclose the extent to which the policy duplicates
Medicare in a manner required by the commissioner. The disclosure
statement shall be provided as a part of, or together with, the
application for the policy or certificate.
(l) (1) Insurers issuing
Medicare supplement policies or certificates for delivery in
California shall provide an outline of coverage to all applicants at
the time of presentation for examination or sale as provided in
Section 10605, and in no case later than at the time the application
is made. Except for direct response policies, insurers shall obtain a
written acknowledgment of receipt of the outline from the applicant.
Any advertisement that is not a presentation for examination or
sale as defined in subdivision (e) of Section 10601 shall contain a
notice in no less than 10-point uppercase type that an outline of
coverage is available upon request. The insurer or agent that
receives any request for an outline of coverage shall provide an
outline of coverage to the person making the request within 14 days
of receipt of the request.
(2) If an outline of coverage is provided at or before the time of
application and the Medicare supplement policy or certificate is
issued on a basis that would require revision of the outline, a
substitute outline of coverage properly describing the policy or
certificate shall accompany the policy or certificate when it is
delivered and contain the following statement, in no less than
12-point type, immediately above the 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."
(3) The outline of coverage shall be in the language and format
prescribed in this subdivision in no less than 12-point type, and
shall include the following items in the order prescribed below.
Titles, as set forth below in paragraphs (B) to (H), inclusive, shall
be capitalized, centered, and printed in boldface type.
(A) (i) The following shall only apply to policies sold for
effective dates prior to June 1, 2010:
(I) The outline of coverage shall include the items, and in the
same order, specified in the chart set forth in Section 17 of the
Model Regulation to implement the NAIC Medicare Supplement Insurance
Minimum Standards Model Act, as adopted by the National Association
of Insurance Commissioners in 2004.
(II) The cover page shall contain the 14-plan (A-L) charts. The
plans offered by the insurer shall be clearly identified. Innovative
benefits shall be explained in a manner approved by the commissioner.
The text shall read:
"Medicare supplement insurance can be sold in only 12 standard
plans. This chart shows the benefits included in each plan. Every
insurance company must offer Plan A. Some plans may not be available.
The BASIC BENEFITS included in ALL plans are:
Hospitalization: Medicare Part A coinsurance plus coverage for 365
additional days after Medicare benefits end.
Medical expenses: Medicare Part B coinsurance (usually 20 percent
of the Medicare-approved amount).
Blood: First three pints of blood each year.
Mammogram: One annual screening to the extent not covered by
Medicare.
Cervical cancer test: One annual screening."
[Reference to the mammogram and cervical cancer screening test
shall not be included so long as California is required to disallow
them for Medicare beneficiaries by the Centers for Medicare and
Medicaid Services or other agent of the federal government under 42
U.S.C. Sec. 1395ss.]
(ii) The following shall only apply to policies sold for effective
dates on or after June 1, 2010:
(I) The outline of coverage shall include the items, and in the
same order specified in the chart set forth in Section 17 of the
Model Regulation to implement the NAIC Medicare Supplement Insurance
Minimum Standards Model Act, as adopted by the National Association
of Insurance Commissioners in 2008.
(II) The cover page shall contain all Medicare supplement benefit
plan charts A to D, inclusive, F, high deductible F, G, and K to N,
inclusive. The plans offered by the insurer shall be clearly
identified. Innovative benefits shall be explained in a manner
approved by the commissioner. The text shall read:
"Medicare supplement insurance can be sold in only standard plans.
This chart shows the benefits included in each plan. Every insurance
company must offer Plan A. Some plans may not be available. Plans E,
H, I and J are no longer available for sale. [This sentence shall
not appear after June 1, 2011.]
The BASIC BENEFITS included in ALL plans are:
Hospitalization: Medicare Part A coinsurance plus coverage for 365
additional days after Medicare benefits end.
Medical expenses: Medicare Part B coinsurance (usually 20 percent
of the Medicare-approved amount) or copayments for hospital
outpatient services. Plans K, L, and N require insureds to pay a
portion of Part B coinsurance copayments.
Blood: First three pints of blood each year.
Hospice: Part A coinsurance.
Mammogram: One annual screening to the extent not covered by
Medicare.
Cervical cancer test: One annual screening."
[Reference to the mammogram and cervical cancer screening test
shall not be included so long as California is required to disallow
them for Medicare beneficiaries by the Centers for Medicare and
Medicaid Services or other agent of the federal government under 42
U.S.C. Sec. 1395ss.]
(B) PREMIUM INFORMATION. Premium information for plans that are
offered by the insurer shall be shown on, or immediately following,
the cover page and shall be clearly and prominently displayed. The
premium and mode shall be stated for all offered plans. All possible
premiums for the prospective applicant shall be illustrated in
writing. If the premium is based on the increasing age of the
insured, information specifying when and how premiums will change
shall be clearly illustrated in writing. The text shall state: "We
[the insurer's name] can only raise your premium if we raise the
premium for all policies like yours in California."
(C) The text shall state: "Use this outline to compare benefits
and premiums among policies."
(D) READ YOUR POLICY VERY CAREFULLY. The text shall state: "This
is only an outline describing your policy's most important features.
The policy is your insurance contract. You must read the policy
itself to understand all of the rights and duties of both you and
your insurance company."
(E) THIRTY-DAY RIGHT TO RETURN THIS POLICY. The text shall state:
"If you find that you are not satisfied with your policy, you may
return it to [insert the insurer's address]. If you send the policy
back to us within 30 days after you receive it, we will treat the
policy as if it has never been issued and return all of your
payments."
(F) POLICY REPLACEMENT. The text shall read: "If you are replacing
another health insurance policy, do NOT cancel it until you have
actually received your new policy and are sure you want to keep it."
(G) DISCLOSURES. The text shall read: "This policy may not fully
cover all of your medical costs." "Neither this company nor any of
its agents are connected with Medicare." "This outline of coverage
does not give all the details of Medicare coverage. Contact your
local social security office or consult 'The Medicare Handbook' for
more details." "For additional information concerning policy
benefits, contact the Health Insurance Counseling and Advocacy
Program (HICAP) or your agent. Call the HICAP toll-free telephone
number, 1-800-434-0222, for a referral to your local HICAP office.
HICAP is a service provided free of charge by the State of
California."
For policies effective on dates on or after June 1, 2010, the
following language shall be required until June 1, 2011, "This
outline shows benefits and premiums of policies sold for effective
dates on or after June 1, 2010. Policies sold for effective dates
prior to June 1, 2010 have different benefits and premiums. Plans E,
H, I, and J are no longer available for sale."
(H) [For policies that are not guaranteed issue] COMPLETE ANSWERS
ARE IMPORTANT. The text shall read: "When you fill out the
application for a new policy, be sure to answer truthfully and
completely all questions about your medical and health history. The
company may have the right to cancel your policy and refuse to pay
any claims if you leave out or falsify important medical information.
Review the application carefully before you sign it. Be certain
that all information has been properly recorded."
(I) One chart for each benefit plan offered by the insurer showing
the services, Medicare payments, payments under the policy and
payments expected from the insured, using the same uniform format and
language. No more than four plans may be shown on one page. Include
an explanation of any innovative benefits in a manner approved by the
commissioner.
(m) An issuer shall comply with all notice requirements of the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (P.L. 108-173).
SEC. 25. Section 10192.18 of the Insurance Code is amended to
read:
10192.18. (a) Application forms shall include the following
questions designed to elicit information as to whether, as of the
date of the application, the applicant currently has Medicare
supplement, Medicare Advantage, Medi-Cal coverage, or another health
insurance policy or certificate in force or whether a Medicare
supplement policy or certificate is intended to replace any other
disability policy or certificate presently in force. A supplementary
application or other form to be signed by the applicant and agent
containing those questions and statements may be used.
(Statements)
(1) You do not need more than one Medicare supplement policy.
(2) If you purchase this policy, you may want to evaluate your
existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medi-Cal and may not
need a Medicare supplement policy.
(4) If after purchasing this policy you become eligible for
Medi-Cal, the benefits and premiums under your Medicare supplement
policy can be suspended, if requested, during your entitlement to
benefits under Medi-Cal for 24 months. You must request this
suspension within 90 days of becoming eligible for Medi-Cal. If you
are no longer entitled to Medi-Cal, your suspended Medicare
supplement policy or if that is no longer available, a substantially
equivalent policy, will be reinstituted if requested within 90 days
of losing Medi-Cal eligibility. If the Medicare supplement policy
provided coverage for outpatient prescription drugs and you enrolled
in Medicare Part D while your policy was suspended, the reinstituted
policy will not have outpatient prescription drug coverage, but will
otherwise be substantially equivalent to your coverage before the
date of the suspension.
(5) If you are eligible for, and have enrolled in, a Medicare
supplement policy by reason of disability and you later become
covered by an employer or union-based group health plan, the benefits
and premiums under your Medicare supplement policy can be suspended,
if requested, while you are covered under the employer or
union-based group health plan. If you suspend your Medicare
supplement policy under these circumstances and later lose your
employer or union-based group health plan, your suspended Medicare
supplement policy or if that is no longer available, a substantially
equivalent policy, will be reinstituted if requested within 90 days
of losing your employer or union-based group health plan. If the
Medicare supplement policy provided coverage for outpatient
prescription drugs and you enrolled in Medicare Part D while your
policy was suspended, the reinstituted policy will not have
outpatient prescription drug coverage, but will otherwise be
substantially equivalent to your coverage before the date of the
suspension.
(6) Counseling services are available in this state to provide
advice concerning your purchase of Medicare supplement insurance and
concerning medical assistance through the Medi-Cal program, including
benefits as a qualified Medicare beneficiary (QMB) and a specified
low-income Medicare beneficiary (SLMB). If you want to discuss buying
Medicare supplement insurance with a trained insurance counselor,
call the California Department of Insurance's toll-free telephone
number 1-800-927-HELP, and ask how to contact your local Health
Insurance Counseling and Advocacy Program (HICAP) office. HICAP is a
service provided free of charge by the State of California.
(Questions)
If you lost or are losing other health insurance coverage and
received a notice from your prior insurer saying you were eligible
for guaranteed issue of a Medicare supplement insurance policy or
that you had certain rights to buy such a policy, you may be
guaranteed acceptance in one or more of our Medicare supplement
plans. Please include a copy of the notice from your prior insurer
with your application. PLEASE ANSWER ALL QUESTIONS.
[Please mark Yes or No below with an "X."]
To the best of your knowledge,
(1) (a) Did you turn 65 years of age in the last 6 months
Yes____ No____
(b) Did you enroll in Medicare Part B in the last 6 months
Yes____ No____
(c) If yes, what is the effective date ___________________
(2) Are you covered for medical assistance through California's
Medi-Cal program
NOTE TO APPLICANT: If you have a share of cost under the Medi-Cal
program, please answer NO to this question.
Yes____ No____
If yes,
(a) Will Medi-Cal pay your premiums for this Medicare supplement
policy
Yes____ No____
(b) Do you receive benefits from Medi-Cal OTHER THAN payments
toward your Medicare Part B premium
Yes____ No____
(3) (a) If you had coverage from any Medicare plan other than
original Medicare within the past 63 days (for example, a Medicare
Advantage plan or a Medicare HMO or PPO), fill in your start and end
dates below. If you are still covered under this plan, leave "END"
blank.
START __/__/__ END __/__/__
(b) If you are still covered under the Medicare plan, do you
intend to replace your current coverage with this new Medicare
supplement policy
Yes____ No____
(c) Was this your first time in this type of Medicare plan
Yes____ No____
(d) Did you drop a Medicare supplement policy to enroll in the
Medicare plan
Yes____ No____
(4) (a) Do you have another Medicare supplement policy in force
Yes____ No____
(b) If so, with what company, and what plan do you have [optional
for direct mailers]
Yes____ No____
(c) If so, do you intend to replace your current Medicare
supplement policy with this policy
Yes____ No____
(5) Have you had coverage under any other health insurance within
the past 63 days (For example, an employer, union, or individual
plan)
Yes____ No____
(a) If so, with what companies and what kind of policy
________________________________________________
________________________________________________
________________________________________________
________________________________________________
(b) What are your dates of coverage under the other policy
START __/__/__ END __/__/__
(If you are still covered under the other policy, leave "END"
blank.)
(b) Agents shall list any other health insurance policies they
have sold to the applicant as follows:
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no longer
in force.
(c) 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.
(d) 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 for delivery of the Medicare supplement policy or
certificate, a notice regarding replacement of Medicare supplement
coverage. One copy of the 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 as provided in Section 10508. 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.
(e) The notice required by subdivision (d) for an issuer shall be
in the form specified by the commissioner, using, to the extent
practicable, a model notice prepared by the National Association of
Insurance Commissioners for this purpose. The replacement notice
shall be printed in no less than 12-point type in substantially the
following form:
[Insurer's name and address]
NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE
SUPPLEMENT COVERAGE OR MEDICARE ADVANTAGE
SAVE THIS NOTICE! IT MAY BE IMPORTANT IN THE FUTURE.
If you intend to cancel or terminate existing Medicare supplement
or Medicare Advantage insurance and replace it with coverage issued
by [company name], please review the new coverage carefully and
replace the existing coverage ONLY if the new coverage materially
improves your position. DO NOT CANCEL YOUR PRESENT COVERAGE UNTIL YOU
HAVE RECEIVED YOUR NEW POLICY AND ARE SURE THAT YOU WANT TO KEEP IT.
If you decide to purchase the new coverage, you will have 30 days
after you receive the policy to return it to the insurer, for any
reason, and receive a refund of your money.
If you want to discuss buying Medicare supplement or Medicare
Advantage coverage with a trained insurance counselor, call the
California Department of Insurance's toll-free telephone number
1-800-927-HELP, and ask how to contact your local Health Insurance
Counseling and Advocacy Program (HICAP) office. HICAP is a service
provided free of charge by the State of California.
STATEMENT TO APPLICANT FROM THE INSURER AND AGENT: I have reviewed
your current health insurance coverage. To the best of my knowledge,
the replacement of insurance involved in this transaction does not
duplicate coverage or, if applicable, Medicare Advantage coverage
because you intend to terminate your existing Medicare supplement
coverage or leave your Medicare Advantage plan. In addition, the
replacement coverage contains benefits that are clearly and
substantially greater than your current benefits for the following
reasons:
__ Additional benefits that are: ______
__ No change in benefits, but lower premiums.
__ Fewer benefits and lower premiums.
__ Plan has outpatient prescription drug coverage and applicant is
enrolled in Medicare Part D.
__ Disenrollment from a Medicare Advantage plan. Reasons for
disenrollment:
__ Other reasons specified here: ______
1. Note: If the issuer of the Medicare supplement policy being
applied for does not impose, or is otherwise prohibited from
imposing, preexisting condition limitations, please skip to statement
3 below. Health conditions that you may presently have (preexisting
conditions) may not be immediately or fully covered under the new
policy. This could result in denial or delay of a claim for benefits
under the new policy, whereas a similar claim might have been payable
under your present policy.
2. State law provides that your replacement Medicare supplement
policy may not contain new preexisting conditions, waiting periods,
elimination periods, or probationary periods. The insurer will waive
any time periods applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
coverage for similar benefits to the extent that time was spent
(depleted) under the original policy.
3. If you still wish to terminate your present policy and replace
it with new coverage, be certain to truthfully and completely answer
any and all questions on the application concerning your medical and
health history. Failure to include all material medical information
on an application requesting that information may provide a basis for
the insurer to deny any future claims and to refund your premium as
though your policy had never been in force. After the application has
been completed and before you sign it, review it carefully to be
certain that all information has been properly recorded. [If the
policy or certificate is guaranteed issue, this paragraph need not
appear.]
DO NOT CANCEL YOUR PRESENT POLICY UNTIL YOU HAVE RECEIVED YOUR NEW
POLICY AND ARE SURE THAT YOU WANT TO KEEP IT.
_________________________________________________
(Signature of Agent, Broker, or Other
Representative)
_________________________________________________
(Signature of Applicant)
_________________________________________________
(Date)
(f) No issuer, broker, agent, or other person shall cause an
insured to replace a Medicare supplement insurance policy
unnecessarily. In recommending replacement of any Medicare supplement
insurance, an agent shall make reasonable efforts to determine the
appropriateness to the potential insured.
(g) An issuer shall not require, request, or obtain health
information as part of the application process for an applicant who
is eligible for guaranteed issuance of, or open enrollment for, any
Medicare supplement coverage pursuant to Section 10192.11 or
10192.12, except for purposes of paragraph (1) or (2) of subdivision
(a) of Section 10192.11 when the applicant is first enrolled in
Medicare Part B. The application form shall include a clear and
conspicuous statement that the applicant is not required to provide
health information during a period where guaranteed issue or open
enrollment applies, as specified in Section 10192.11 or 10192.12,
except for purposes of paragraph (1) or (2) of subdivision (a) of
Section 10192.11 when the applicant is first enrolled in Medicare
Part B, and shall inform the applicant of those periods of guaranteed
issuance of Medicare supplement coverage. This subdivision shall not
prohibit an issuer from requiring proof of eligibility for a
guaranteed issuance of Medicare supplement coverage.
SEC. 26. Section 10192.20 of the Insurance Code is amended to
read:
10192.20. (a) An issuer, directly or through its producers, shall
do each of the following:
(1) Establish marketing procedures to ensure that any comparison
of policies by its agents or other producers will be fair and
accurate.
(2) Establish marketing procedures to ensure that excessive
insurance is not sold or issued.
(3) 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."
(4) Inquire and otherwise make every reasonable effort to identify
whether a prospective applicant for a Medicare supplement policy
already has health insurance and the types and amounts of that
insurance.
(5) Establish auditable procedures for verifying compliance with
this subdivision.
(b) In addition to the practices prohibited by this code or any
other law, the following acts and practices are prohibited:
(1) Twisting, which means 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 an insurance policy or
to take out a policy of insurance with another insurer.
(2) High pressure tactics, which means 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.
(3) Cold lead advertising, which means making use directly or
indirectly of any method of marketing that fails to disclose in a
conspicuous manner that a purpose of the method of marketing is the
solicitation of insurance and that contact will be made by an
insurance agent or insurance company.
(c) 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 article.
(d) The commissioner each year shall prepare a rate guide for
Medicare supplement insurance and Medicare supplement contracts. The
commissioner each year shall make the rate guide available on or
before the date of the fall Medicare annual open enrollment. The rate
guide shall include all of the following for each company that sells
Medicare supplemental insurance or Medicare supplement contracts in
California:
(1) (A) For policies sold for effective dates prior to June 1,
2010, a listing of all the policies, plans A to L, inclusive, that
are available from the company.
(B) For policies sold for effective dates on or after June 1,
2010, a listing of all the policies, plans A to D, inclusive, F, high
deductible F, G, and K to N, inclusive, that are available from the
company.
(2) (A) For policies sold for effective dates prior to June 1,
2010, a listing of all the policies, plans A to L, inclusive, for
Medicare beneficiaries under the age of 65 that are available from
the company.
(B) For policies sold for effective dates on or after June 1,
2010, a listing of all the policies, plans, A to D, inclusive, F,
high deductible F, G, and K to N, inclusive, for Medicare
beneficiaries under the age 65 that are available from the company.
(3) The toll-free telephone number of the company that consumers
can use to obtain information from the company.
(4) Sample rates for each policy listed pursuant to paragraphs (1)
and (2). The sample rates shall be for ages 0-65, 65, 70, 75, and
80.
(5) The premium rate methodology for each policy listed pursuant
to paragraphs (1) and (2). "Premium rate methodology" means attained
age, issue age, or community rated.
(6) The waiting period for preexisting conditions for each policy
listed pursuant to paragraphs (1) and (2).
(e) The consumer rate guide prepared pursuant to subdivision (d)
shall be distributed using all of the following methods:
(1) Through Health Insurance Counseling and Advocacy Program
(HICAP) offices.
(2) By telephone, using the department's consumer toll-free
telephone number.
(3) On the department's Internet Web site.
(4) In addition to the distribution methods described in
paragraphs (1) to (3), inclusive, each insurer that markets Medicare
supplement insurance or Medicare supplement contracts in this state
shall provide on the application form a statement that reads as
follows: "A rate guide is available that compares the
policies sold by different insurers. You
can obtain a copy of this rate guide by calling the Department of
Insurance's consumer toll-free telephone number (1-800-927-HELP), by
calling the Health Insurance Counseling and Advocacy Program (HICAP)
toll-free telephone number (1-800-434-0222), or by accessing the
Department of Insurance's Internet Web site (www.insurance.ca.gov)."
SEC. 27. Section 10192.24 is added to the Insurance Code, to read:
10192.24. This section applies to all policies with policy years
beginning on or after May 21, 2009.
(a) In addition to the requirements set forth under Sections 10140
and 10143, an issuer of a Medicare supplement policy or certificate
shall adhere to the requirements imposed by the federal Genetic
Information Nondiscrimination Act of 2008 (Public Law 110-233) as
follows:
(1) The issuer 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, on the basis of the genetic information with respect to
that individual or a family member of the individual.
(2) The issuer 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
that individual or a family member of the individual.
(b) Nothing in subdivision (a) shall be construed to limit the
ability of an issuer, to the extent otherwise permitted by law, to do
either of the following:
(1) Deny or condition the issuance or effectiveness of the policy
or certificate or increase the premium for a group based on the
manifestation of a disease or disorder of an insured or applicant.
(2) Increase 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. For purposes of this paragraph, the
manifestation of a disease or disorder in one individual shall not
also be used as genetic information about other group members and to
further increase the premium for the group.
(c) An issuer of a Medicare supplement policy or certificate shall
not request or require an individual or a family member of that
individual to undergo a genetic test.
(d) Subdivision (c) shall not be construed to 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 subdivision
(a).
(e) For purposes of carrying out subdivision (d), an issuer of a
Medicare supplement policy or certificate may request only the
minimum amount of information necessary to accomplish the intended
purpose.
(f) An issuer of a Medicare supplement policy or certificate shall
not request, require, seek, or purchase genetic information for
underwriting purposes.
(g) An issuer of a Medicare supplement policy or certificate shall
not request, require, seek, or purchase genetic information with
respect to any individual or a family member of that individual prior
to the individual's enrollment under the policy in connection with
that enrollment.
(h) 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 or a
family member of that individual, the request, requirement, or
purchase shall not be considered a violation of subdivision (g) if
the request, requirement, or purchase is not in violation of
subdivision (f). However, the issuer shall not use any genetic
information obtained under this section for any prohibited purpose
described in this section or in Sections 10140 and 10143.
(i) For the purposes of this section, the following definitions
shall apply:
(1) "Issuer of a Medicare supplement policy or certificate"
includes a third-party administrator, or other person acting for or
on behalf of an issuer.
(2) "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 the individual.
(3) "Genetic information" means, with respect to any individual,
information about the individual's genetic tests, the genetic tests
of family members of the individual, and the manifestation of a
disease or disorder in family members of the individual. The term
includes, with respect to any individual, any request for, or receipt
of, genetic services, or participation in clinical research that
includes genetic services, by the individual or any family member of
the 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 that 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.
(4) "Genetic services" means a genetic test, genetic education, or
genetic counseling, including obtaining, interpreting, or assessing
genetic information.
(5) "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.
(6) "Underwriting purposes" includes all of the following:
(A) Rules for, or determination of, eligibility, including
enrollment and continued eligibility, for benefits under the policy.
(B) The computation of premium or contribution amounts under the
policy.
(C) The application of any preexisting condition exclusion under
the policy.
(D) Other activities related to the creation, renewal, or
replacement of a policy of health insurance or health benefits.
SEC. 28. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 29. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to make the changes required by the federal Medicare
Improvements for Patients and Providers Act of 2008 and the federal
Genetic Information Nondiscrimination Act of 2008 by the dates
imposed under those acts, it is necessary that this act take effect
immediately.