BILL NUMBER: AB 151 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 29, 2011
INTRODUCED BY Assembly Member Monning
JANUARY 18, 2011
An act to amend Sections 1358.11 and 1358.12 of the Health and
Safety Code, and to amend Sections 10192.11 and 10192.12 of the
Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 151, as amended, Monning. Medicare supplement coverage.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
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.
Existing law requires issuers to make available to specified
individuals who are 64 years of age or younger and who do not have
end-stage renal disease, Medicare supplement benefit plans A, B, C,
and F, and Medicare supplement benefit plan H, I, or J, or Medicare
supplement benefit plan K or L, as specified. Existing federal law
prohibits the issuance of new Medicare supplement plans H, I, and J,
and instead authorizes the issuance of Medicare supplement plans M
and N, as specified.
This bill would delete from those provisions obsolete references
to plans H, I, and J, and instead require the issuer to make
available Medicare supplement benefit plans A, B, C, and F, and
Medicare supplement benefit plan K or L, or Medicare supplement
benefit plan M or N, as specified.
Existing law prohibits an issuer from denying Medicare supplement
coverage to an eligible individual who is guaranteed issue under
specified circumstances. Existing law requires certain eligible
individuals to be guaranteed issue of Medicare supplement plan A, B,
C, F (including a high deductible plan F), K, or L.
This bill would add to that guaranteed issue requirement Medicare
supplement plans M and N.
Existing law provides that an individual enrolled in a Medicare
Advantage plan (Medicare Part C) that reduces any of its benefits, or
increases cost sharing, or terminates certain relationships with
providers, is eligible for Medicare supplement coverage that is
issued by the same issuer of his or her Medicare Advantage plan or by
a subsidiary of, or a network that contracts with, the parent
company of that issuer.
This bill would extend that eligibility to an individual enrolled
in a Medicare Advantage plan that increases its premium. The bill
would provide that an individual enrolled in a Medicare Advantage
plan is eligible for specified Medicare supplement coverage from any
issuer under the circumstances described above if the issuer of his
or her Medicare Advantage plan, or the subsidiary or network of the
parent company, does not offer any other Medicare supplement coverage
and only offers a Medicare Advantage plan or plans , and other
specified conditions are met .
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.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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 K
or L, if currently available, or Medicare supplement benefit plan M
or N, if currently available. The selection between Medicare
supplement benefit plan K or L and the selection between Medicare
supplement benefit plan M or N 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. 2. 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 applies:
(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 of the federal Social
Security Act, or the plan is terminated for all individuals within a
residence area.
(D) (i) The Medicare Advantage plan in which
the individual is enrolled reduces any of its benefits or increases
the amount of cost sharing or premium 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. If no Medicare supplement contract is
available to the individual from the same issuer, a subsidiary of
the parent company of the issuer, or a network that contracts with
the parent company of the issuer, the individual shall be eligible
for a Medicare supplement contract pursuant to paragraph (1) of
subdivision (e) issued by any issuer. issuer,
if the Medicare Advantage plan in which the individual is enrolled
does any of the following:
(I) Increases the premium by 15 percent or more.
(II) Increases physician, hospital, or drug copayments by 15
percent or more.
(III) Reduces any benefits under the plan.
(IV) 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.
(ii) Enrollment in a Medicare supplement contract from an issuer
unaffiliated with the issuer of the Medicare Advantage plan in which
the individual is enrolled shall be permitted only during the annual
election period for a Medicare Advantage plan, except where the
Medicare Advantage plan has discontinued its relationship with a
provider currently furnishing services to the individual. Nothing in
this section shall be construed to authorize an individual to enroll
in a group Medicare supplement policy if the individual does not meet
the eligibility requirements for the group.
(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 federal 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 federal 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 federal 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 federal Social Security
Act (Medicare cost), any similar organization operating under
demonstration project authority, any PACE provider under Section 1894
of the federal 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 federal 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
federal 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, L, M, or N 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, L, M, or N 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, L, M, or
N 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, L, M, or N 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. 3. 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 K
or L, if currently available, or Medicare supplement benefit plan M
or N, if currently available. The selection between Medicare
supplement plan K or L and the selection between Medicare supplement
benefit plan M or N 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. 4. 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 applies:
(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 of the federal Social
Security Act, or the plan is terminated for all individuals within a
residence area.
(D) (i) The Medicare Advantage plan in which
the individual is enrolled reduces any of its benefits or increases
the amount of cost sharing or premium 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. If no Medicare supplement policy is
available to the individual from the same issuer, a subsidiary of the
parent company of the issuer, or a network that contracts with the
parent company of the issuer, the individual shall be eligible for a
Medicare supplement policy pursuant to paragraph (1) of subdivision
(e) issued by any issuer. issuer, if the
Medicare Advantage plan in which the individual is enrolled does any
of the following:
(I) Increases the premium by 15 percent or more.
(II) Increases physician, hospital, or drug copayments by 15
percent or more.
(III) Reduces any benefits under the plan.
(IV) 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.
(ii) Enrollment in a Medicare supplement contract from an issuer
unaffiliated with the issuer of the Medicare Advantage plan in which
the individual is enrolled shall be permitted only during the annual
election period for a Medicare Advantage plan, except where the
Medicare Advantage plan has discontinued its relationship with a
provider currently furnishing services to the individual. Nothing in
this section shall be construed to authorize an individual to enroll
in a group Medicare supplement policy if the individual does not meet
the eligibility requirements for the group.
(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 federal 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 federal 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 federal 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 federal Social Security Act
(Medicare cost), any similar organization operating under
demonstration project authority, any PACE provider under Section 1894
of the federal 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 federal 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
federal 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, L, M, or N 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, L, M, or N 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, L, M, or
N 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, L, M, or N 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. 5. 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.