02-031 C.M.R. ch. 270, § 13 - Required disclosure provisions

(A) General Rules.

(1) Medicare supplement policies shall include a renewal or continuation provision. The language or specifications of the provision must be consistent with the type of contract to be issued. The provision shall be appropriately captioned and shall appear on the first page of the policy.

(2) All riders or endorsements added to a Medicare supplement policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the insured, except for riders or endorsements by which the insurer 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. After the date of policy issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, unless the increase in benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy.

(3) A Medicare supplement policy which provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or words of similar import shall include a definition and explanation of such terms in its accompanying outline of coverage.

(4) If a Medicare supplement policy contains any limitations with respect to pre-existing conditions as permitted under 24-A M.R.S.A. §5006, such limitations must appear as a separate paragraph of the policy and be labeled as "Pre-existing Condition Limitations."

(5) Whether or not such policies or certificates are advertised, solicited, or issued as Medicare supplement policies as defined in this Rule, all insurers and other entities issuing accident and sickness policies or certificates which provide hospital or medical expense coverage on an expense incurred or indemnity basis, other than incidentally, shall provide a Medicare supplement buyer's guide to all applicants for such policies who are eligible for Medicare by reason of age. Except in the case of direct response insurers, the issuer shall deliver the buyer's guide to the applicant at the time of application and obtain written acknowledgment of receipt. Direct response insurers shall deliver the buyer's guide to the applicant upon request but not later than at the time the policy is delivered. All such buyer's guides shall reflect the Medicare deductible and coinsurance amounts current at the time of their delivery. The buyer's guide shall be in the form entitled "Guide to Health Insurance for People with Medicare" [an edition of which is reproduced as Attachment A to this Rule], unless the National Association of Insurance Commissioners or the Health Care Financing Administration of the U.S. Department of Health and Human Services discontinues its endorsement of that form, or the U.S. Government Printing Office ceases publication of that form. In that event, the Superintendent of Insurance shall prescribe the form of the buyer's guide by bulletin.

(6) The terms "Medicare supplement," "medigap," and words of similar import shall not be used to label, advertise, market, or otherwise describe any insurance policy that is not issued in compliance with Sections 5, 6, 7, and 9 of this Rule.

(B) Notice Requirements

(1) As soon as practicable, and no later than thirty (30) days prior to the annual effective date of any Medicare benefit changes, every insurer, health care service plan, or other entity providing Medicare supplement insurance or benefits to any resident of this State shall notify its policyholders and certificate holders of modifications it has made to Medicare supplement insurance policies in a format acceptable to the Superintendent. The format prescribed in Appendix A may be used if no other format is prescribed by the Superintendent. The notice shall:

(a) include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement insurance policy, and

(b) inform each covered person as to when any premium adjustment is to be made due to changes in Medicare.

(2) 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.

(3) Such notices shall not contain or be accompanied by any solicitation.

(4) In the event that notice substantially similar to Appendix A has been provided to residents of this State who are Medicare supplement insurance policyholders or certificate holders prior to the effective date of this Rule, the notice requirements of this section for the benefits commencing January 1, 1990, shall be deemed to be satisfied.

(C) Outline of Coverage Requirements for Medicare Supplement Policies and Certificates.

(1) Insurers and other entities issuing Medicare supplement policies or certificates for delivery in this State shall provide an outline of coverage to each applicant. Except for direct response insurers, which may deliver the outline of coverage with the policy, the issuer shall provide the outline of coverage at the time application is made and obtain a written acknowledgment of receipt.

(2) 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 must accompany the policy or certificate when it is delivered and contain the following statement, in no less than twelve (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."

(3) The outline of coverage provided to applicants pursuant to subsections (1) and (2) shall be in the form prescribed below, except that terms such as "policy" or "insurance company," if inappropriate to the certificate or contract being described, shall be replaced with the appropriate term. Where language to be used is not specifically prescribed, directions governing the type or description of information which the issuer is to provide are set forth in brackets. Language supplied by the issuer in response to these requirements is subject to review by the Superintendent and shall be disapproved if the Superintendent determines that such language fails to comply with the requirements of this Rule or is in violation of 24-A M.R.S.A. Chapter 23 or Chapter 67. Bracketed dollar amounts representing Medicare deductible and coinsurance amounts shall be appropriately modified when the Medicare deductible or coinsurance amounts change:

[COMPANY NAME]

OUTLINE OF MEDICARE

SUPPLEMENT COVERAGE

(1) Read Your Policy Carefully -- This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!

(2) Medicare Supplement Coverage -- Policies of this category are designed to supplement Medicare by covering some hospital, medical, and surgical services which are partially covered by Medicare. Coverage is provided for hospital inpatient charges and some physician charges, subject to any deductibles and copayment provisions which may be in addition to those provided by Medicare, and subject to other limitations which may be set forth in the policy. The policy does not provide benefits for custodial care such as help in walking, getting in and out of bed, eating, dressing, bathing, and taking medicine [delete to the extent such coverage is provided].

(3) [for agents:]

Neither [insert company's name] nor its agents are connected with Medicare.

[for direct responses:]

[insert company's name] is not connected with Medicare.

(4) [A brief summary of the major benefit gaps in Medicare Parts A & B with a parallel description of supplemental benefits, including dollar amounts (and indexed copayments or deductibles as appropriate), provided by the Medicare supplement coverage in the following order:]

Description	This Policy Pays	You Pay
I. MINIMUM STANDARDS SERVICE PART A INPATIENT HOSPITAL SERVICES: Semiprivate Room & Board Miscellaneous Hospital Services & Supplies, such as Drugs, X-Rays, Lab Tests & Operating Room
BLOOD
MEDICAL EXPENSE: Services of Physician/out-Patient Services Medical Supplies other than Prescribed Drugs
BLOOD
MISCELLANEOUS Immunosuppressive Drugs
II. Additional Benefits PART A Part A Deductible Private Rooms In-Hospital Private Nurses Skilled Nursing Facility
PARTS A& B Home Health Services
PART B
Part B Deductible Medical Charges in Excess of Medicare Allowable Expenses (Percentage Paid)
OUT-OF POCKET MAXIMUM
Prescription Drugs
Miscellaneous
Respite Care Benefits
Expenses Incurred in Foreign County
Other Total Premium	$

IN ADDITION TO THIS OUTLINE OF COVERAGE,

[COMPANY NAME] WILL SEND AN

ANNUAL NOTICE TO YOU 30 DAYS PRIOR TO THE EFFECTIVE

DATE OF MEDICARE

CHANGES WHICH WILL DESCRIBE THESE CHANGES AND

THE CHANGES IN YOUR

MEDICARE SUPPLEMENT COVERAGE.

**If this policy does not provide coverage for a benefit listed above, the insurer must state "No coverage" beside that benefit in the first column.

(5) [A chart describing recent changes in benefits, in the form set forth in Appendix A, shall accompany the outline of coverage]

(6) [A statement that the policy does or does not cover the following:

(a) Private duty nursing,

(b) Skilled nursing home care costs beyond what is covered by Medicare,

(c) Custodial nursing home care costs,

(d) Intermediate nursing home care costs,

(e) Home health care above number of visits covered by Medicare.

(f) Physician charges above Medicare's reasonable charge,

(g) Drugs other than prescription drugs furnished during a hospital or skilled nursing facility stay,

(h) Care received outside of U.S.A., [This statement shall also clearly state that care is provided outside the U.S.A. in those instances when Medicare provides benefits.]

(i) Dental care or dentures, checkups, routine immunizations, cosmetic surgery, routine foot care, examinations for the cost of eyeglasses or hearing aids.]

(7) [A description of any policy provisions which exclude, eliminate, reduce, limit, delay, or in any other manner operate to qualify payments of the benefits described in (4) above, including conspicuous statements:

(a) That the chart summarizing Medicare benefits only briefly describes such benefits.

(b) That the Health Care Financing Administration or its Medicare publications should be consulted for further details and limitations.]

(8) [A description of policy provisions respecting renewability or continuation of coverage, including any reservation of rights to change premium.]

Notes

02-031 C.M.R. ch. 270, § 13