20 CSR 400-3.400 - Model Rule to Implement Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Repeal of Medicare Catastrophic Coverage Act
Editor's Note: The secretary of state has determined that the publication of this rule in its entirety would be unduly cumbersome or expensive. The entire text of the material referenced has been filed with the secretary of state. This material may be found at the Office of the Secretary of State or at the headquarters of the agency and is available to any interested person at a cost established by state law.
(1) This rule shall apply to all Medicare
supplement coverage delivered or issued for delivery in this state. The
provisions of this rule shall have precedence over the provisions of any other
regulation of this state to the extent necessary to assure that-
(A) Benefits do not duplicate benefits
payable by Medicare;
(B) Benefits
are adjusted to reflect changes in Medicare benefits;
(C) Applicants receive adequate notice and
disclosure of changes in their Medicare supplement coverage; and
(D) Appropriate premium adjustments are made
in a timely manner.
(2)
Definitions. For the purposes of this rule-
(A) Applicant means-
1. In the case of an individual Medicare
supplement policy or contract, the person who seeks to contract for insurance
benefits; and
2. In the case of a
group Medicare supplement policy or contract, the proposed certificate
holder;
(B) Certificate
means any certificate issued under a group Medicare supplement policy which has
been delivered or issued for delivery in this state; and
(C) Medicare supplement policy means a group
or individual policy of accident and health insurance, or a subscriber contract
of health service corporations, which is advertised, marketed or designed
primarily to supplement coverage for hospital, medical or surgical expenses
incurred by an insured person which are not covered by Medicare. This term does
not include:
1. A policy or contract of one
(1) or more employers or labor organizations, or of the trustees of a fund
established by one (1) or more employers or labor organizations, or a
combination of them for employees or former employees or a combination of them,
or for members or former members or a combination of them of the labor
organization;
2. A policy or
contact of any professional, trade or occupational association for its members,
former or retired members or a combination of them if the association-
A. Is composed of individuals all of whom are
actively engaged in the same profession, trade or occupation;
B. Has been maintained in good faith for
purposes other than obtaining insurance; and
C. Has been in existence for at least two (2)
years prior to the date of its initial offering of the policy or plan to its
members; or
3. Individual
policies or contracts issued pursuant to a conversion privilege under a policy
or contract of group or individual insurance when the group or individual
policy or contract includes provisions which are inconsistent with the
requirements of sections 376.850-376.885, RSMo nor to Medicare supplement
policies being issued to employees or members as additions to franchise plans
in existence on July 1, 1982.
(3) Benefit Conversion Requirements.
(A) Effective January 1, 1990 no Medicare
supplement insurance policy, contract or certificate in force in this state
shall contain benefits which duplicate benefits provided by Medicare.
(B) Benefits eliminated by operation of the
Medicare Catastrophic Coverage Act of 1988 transition provisions shall be
restored.
(C) For Medicare
supplement policies subject to the minimum standards adopted by the states
pursuant to Medicare Catastrophic Coverage Act of 1988, the minimum benefits
shall be-
1. Coverage of Part A
Medicare-eligible expenses for hospitalization to the extent not covered by
Medicare from the sixty-first day through the ninetieth day in any Medicare
benefit period;
2. Coverage for
either all or none of the Medicare Part A inpatient hospital deductible
amount;
3. Coverage for Part A
Medicare-eligible expenses incurred as daily hospital charges during use of
Medicare's lifetime hospital inpatient reserve days;
4. Upon exhaustion of all Medicare hospital
inpatient coverage including the lifetime reserve days, coverage of ninety
percent (90%) of all Medicare Part A eligible expenses for hospitalization not
covered by Medicare subject to a lifetime maximum benefit of an additional
three hundred sixty-five (365) days;
5. Coverage under Medicare Part A for the
reasonable cost of the first three (3) pints of blood (or equivalent quantities
of packed red blood cells, as defined under federal regulations) unless
replaced in accordance with federal regulations or already paid for under Part
B;
6. Coverage for coinsurance
amount of Medicare-eligible expenses under Part B regardless of hospital
confinement, subject to a maximum calendar year out-of-pocket amount equal to
the Medicare Part B deductible (seventy-five dollars ($75)); and
7. Effective January 1, 1990 coverage under
Medicare Part B for the reasonable cost of the first three (3) pints of blood
(or equivalent quantities of packed red blood cells, as defined under federal
regulations), unless replaced in accordance with federal regulations or already
paid for under Part A, subject to the Medicare deductible amount.
(D) General Requirements.
1. No later than January 31, 1990, every
insurer, health care service plan or other entity providing Medicare supplement
insurance or benefits to a resident of this state shall notify its
policyholders, contract holders and certificate holders of modifications it has
made to Medicare supplement insurance policies or contracts. This notice shall
be in the format prescribed in Appendix A.
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 insurance policy or contract.
B. The notice shall inform each covered
person as to when any premium adjustment due to changes in Medicare benefits
will be effective.
C. 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.
D. The notice shall not contain or be
accompanied by any solicitation.
2. No modifications to an existing Medicare
supplement contract or policy shall be made at the time of or in connection
with the notice requirements of this regulation except to the extent necessary
to accomplish the purpose of this regulation.
(4) Form and Rate Filing Requirements.
(A) As soon as practicable, but no longer
than forty-five (45) days after the effective date of the Medicare benefit
changes, every insurer, health care service plan or other entity providing
Medicare supplement insurance or contracts in this state shall file with the
Department of Commerce and Insurance, in accordance with the applicable filing
procedures of this state-
1. Appropriate
premium adjustments necessary to produce loss ratios as originally anticipated
for the applicable policies or contracts. Supporting documents as necessary to
justify the adjustment shall accompany the filing; and
2. Any appropriate riders, endorsements or
policy forms needed to accomplish the Medicare supplement insurance
modifications necessary to eliminate benefit duplications with Medicare and to
provide the benefits required by section (3). These riders, endorsements or
policy forms shall provide a clear description of the Medicare supplement
benefits provided by the policy or contract.
(B) Upon satisfying the filing and approval
requirements of this state, every insurer, health care service plan or other
entity providing Medicare supplement insurance in this state shall provide each
covered person with any rider, endorsement or policy form necessary to make the
adjustments outlined in section (4).
(C) Any premium adjustments shall produce an
expected loss ratio under the policy or contract as will conform with minimum
loss ratio standards for Medicare supplement policies and shall result in an
expected loss ratio at least as great as that originally anticipated by the
insurer, health care service plan or other entity for the Medicare supplement
insurance policies or contracts. Premium adjustments may be calculated for the
period commencing with Medicare benefits changes.
(5) Offer of Reinstitution of Coverage.
(A) Except as provided in subsection (5)(B),
in the case of an individual who had in effect, as of December 31, 1988, a
Medicare supplemental policy with an insurer (as a policyholder or, in the case
of a group policy, as a certificate holder) and the individual terminated
coverage under this policy before the date of the enactment of the repeal of
the Medicare Catastrophic Coverage Act of 1988, the insurer shall-
1. Provide written notice no earlier than
December 15, 1989 and no later than January 30, 1990 to the policyholder or
certificate holder (at the most recent available address) of the offer
described in this rule; and
2.
Offer the individual, during a period of at least sixty (60) days beginning not
later than February 1, 1990, reinstitution of coverage (with coverage effective
as of January 1, 1990) under terms which-
A.
Do not provide for any waiting period with respect to treatment of preexisting
conditions;
B. Provide for coverage
which is substantially equivalent to coverage in effect before the date of the
termination; and
C. Provide for
classification of premiums which are 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 never
terminated.
(B)
An insurer is not required to make the offer under paragraph (5)(A)2. in the
case of an individual who is a policyholder or certificate holder in another
Medicare supplement policy as of January 1, 1990 if the individual is not
subject to a waiting period with respect to treatment of a preexisting
condition under the other policy.
(6) Requirements for New Policies and
Certificates.
(A) Effective January 1, 1990 no
Medicare supplement insurance policy, contract or certificate shall be
delivered or issued for delivery in this state which provides benefits which
duplicate benefits provided by Medicare. No medicare supplement insurance
policy, contract or certificate shall provide less benefits than those required
under the existing Medicare Supplement Insurance Minimum Standards Model Act or
Regulation except where duplication of Medicare benefits would result and
except as required by transition provisions.
(B) General Requirements.
1. Within ninety (90) days of April 16, 1990,
every insurer, health care service plan or other entity required to file its
policies or contracts with this state shall file new Medicare supplement
insurance policies or contracts which eliminate any duplication of Medicare
supplement benefits with benefits provided by Medicare, which adjust minimum
required benefits to changes in Medicare benefits and which provide a clear
description of the policy or contract benefit.
2. The filing required under paragraph
(6)(B)1. shall provide for loss ratios which are in compliance with all minimum
standards.
3. Every applicant for a
Medicare supplement insurance policy, contract or certificate shall be provided
with an outline of coverage which simplifies and accurately describes benefits
provided by Medicare and policy or contract benefits along with benefit
limitations.
(7) Filing Requirements for Advertising.
Every insurer, health service plan or other entity providing Medicare
supplement insurance or benefits in this state shall provide a copy of any
advertisement intended for use in this state whether through written, radio or
television medium to the director of insurance of this state for review or
approval by the director to the extent it may be required under state law. This
advertisement shall comply with all applicable laws of this state.
(8) Buyer's Guide. No insurer, health care
service plan or other entity shall make use of or otherwise disseminate any
buyer's guide or informational brochure which does not accurately outline
current Medicare benefits and which has not been adopted by the
director.
(9) Separability. If any
provision of this rule or the application of it to any person or circumstance
is for any reason held to be invalid, the remainder of the regulation and the
application of that provision to other persons or circumstances shall not be
affected by it.
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Notes
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