31 Pa. Code § 89.775 - Minimum benefit standards for policies or certificates issued for delivery prior to July 30, 1992
The following standards apply to Prestandardized Medicare supplement benefit plans. A policy or certificate may not be advertised, solicited or issued for delivery in this Commonwealth as a Medicare supplement policy or certificate unless it meets or exceeds the following minimum standards. These are minimum standards and do not preclude the inclusion of other provisions or benefits which are consistent with this subchapter.
(1)
General standards. The
following standards apply to Medicare supplement policies and certificates and
are in addition to the other requirements of this subchapter:
(i)
Exclusion/limitation of
benefits. A Medicare supplement policy or certificate may not exclude
or limit benefits for losses incurred more than 6 months from the effective
date of coverage because it involved a preexisting condition. The policy or
certificate may not define a preexisting condition more restrictively than a
condition for which medical advice was given or treatment was recommended by or
received from a physician within 6 months before the effective date of
coverage.
(ii)
Indemnification of sickness and accidents. A Medicare
supplement policy or certificate may not indemnify against losses resulting
from sickness on a different basis than losses resulting from
accidents.
(iii)
Cost
sharing amounts under Medicare. 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 changes in the
applicable Medicare deductible amount, copayment, and coinsurance percentage
factors. Premiums may be modified to correspond with these changes.
(iv)
Termination of coverage
. A noncancellable, guaranteed renewable or noncancellable and guaranteed
renewable Medicare supplement policy may not:
(A) 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.
(B) Be cancelled or nonrenewed by the issuer
solely on the grounds of deterioration of health.
(v)
Restrictions on termination of
policies and certificates.
(A) Except
as authorized by the Commissioner, an issuer may neither cancel nor nonrenew a
Medicare supplement policy or certificate for any reason other than nonpayment
of premium or material misrepresentation.
(B) If a group Medicare supplement insurance
policy is terminated by the group policyholder and not replaced as provided in
clause (D), the issuer shall offer certificateholders an individual Medicare
supplement policy. The issuer shall offer the certificateholder at least the
following choices:
(I) An individual Medicare
supplement policy currently offered by the issuer having comparable benefits to
those contained in the terminated group Medicare supplement policy.
(II) An individual Medicare supplement policy
which provides only benefits that are required to meet the minimum standards as
defined in §
89.776a(2)
(relating to benefit standards for policies or certificates issued or delivered
on or after June 1, 2010).
(C) If membership in a group is terminated,
the issuer shall do one of the following:
(I)
Offer the certificateholder conversion opportunities that are described in
clause (B).
(II) At the option of
the group policyholder, offer the certificateholder continuation of coverage
under the group policy.
(D) 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 group policy will not result in an exclusion for preexisting
conditions that would have been covered under the group policy being
replaced.
(vi)
Termination of a Medicare supplement policy or certificate shall be without
prejudice to a continuous loss which commenced while the policy was in force,
but the extension of benefits beyond the period during which the policy was in
force may be predicated upon the continuous total disability of the insured,
limited to the duration of the policy benefit period, if any, or to payment of
the maximum benefits. Receipt of Medicare Part D benefits will not be
considered in determining a continuous loss.
(vii) If a Medicare supplement policy
eliminates an outpatient prescription drug benefit as a result of requirements
imposed by the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, the act of December 8, 2003 (Pub. L. No. 108-173 , 117 Stat.
2066), the modified policy shall be deemed to satisfy the guaranteed renewal
requirement of this subsection.
(viii) If a hospital plan corporation or a
professional health services plan corporation issues a subscriber contract
which does not include the required benefits, the contract shall be issued in
conjunction with another contract, including at least the remainder of the
benefits in this subchapter, to qualify as Medicare supplement insurance. In
the alternative, two or more corporations may act jointly and issue a single
contract which contains the required benefits.
(2)
Minimum benefit
standards. The following represent minimum benefit standards:
(i) Coverage of Part A Medicare eligible
expenses for hospitalization to the extent not covered by Medicare from the
61st day through the 90th day in any Medicare benefit period.
(ii) Coverage for all or none of the Medicare
Part A inpatient hospital deductible amount. If the insurer desires, in
consideration of a reduced premium, to offer a contract without coverage for
the initial deductible under Part A, it may do so only if the insured is given
the option of purchasing the contract from that insurer with coverage for all
of the Part A deductible.
(iii)
Coverage of Part A Medicare eligible expenses incurred as daily hospital
charges during the use of Medicare's lifetime hospital inpatient reserve
days.
(iv) Upon exhaustion of
Medicare hospital inpatient coverage, including the lifetime reserve days,
coverage of 90% of all Medicare Part A eligible expenses for hospitalization
not covered by Medicare subject to a lifetime maximum benefit of an additional
365 days.
(v) Coverage under
Medicare Part A for the reasonable cost of the first three pints of blood, or
equivalent quantities of packed red blood cells, as defined under Federal
regulations, unless replaced in accordance with Federal regulations or already
paid for under Part B.
(vi)
Coverage for the coinsurance amount, or in the case of hospital outpatient
department services paid under a prospective payment system, the copayment
amount, of Medicare eligible expenses under Part B regardless of hospital
confinement, subject to a maximum calendar year out-of-pocket amount equal to
the Medicare Part B deductible.
(vii) Effective January 1, 1990, coverage
under Medicare Part B for the reasonable cost of the first three pints of
blood, or equivalent quantities of packed red blood cells, as defined under
Federal regulations, unless replaced in accordance with Federal regulations or
already paid for under Part A, subject to the Medicare deductible
amount.
(viii) If a hospital plan
corporation or a professional health service plan corporation issues a
subscriber contract which does not include the required benefits, the contract
shall be issued in conjunction with another contract, including at least the
remainder of the benefits in this subchapter, to qualify as Medicare supplement
insurance. In the alternative, two or more corporations may act jointly and
issue a single contract which contains the required benefits.
Notes
The provisions of this § 89.775 amended under the
Omnibus Budget Reconciliation Act (OBRA 90) of November 15, 1990,
P. L.
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