93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB5090

 

Introduced 02/05/04, by Mary E. Flowers

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/363   from Ch. 73, par. 975

    Amends the Illinois Insurance Code. Requires companies writing Medicare supplement business to make available to persons eligible for the federal Medicare program by reason of disability each type of Medicare supplement insurance policy that an issuer makes available to persons eligible for the federal Medicare program by reason of age. Provides that the issuer shall not charge persons eligible for the federal Medicare program by reason of disability premium rates for any medical supplement insurance benefit plan that exceed the issuer's premium rates charged to individuals eligible for the federal Medicare program by reason of age. Provides guaranteed issue rights to those individuals eligible for a Medicare supplement policy during the 6 month period beginning with the first day of the month in which the applicant enrolls for benefits under Medicare Part B.


LRB093 14628 SAS 40140 b

 

 

A BILL FOR

 

HB5090 LRB093 14628 SAS 40140 b

1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by
5 changing Section 363 as follows:
 
6     (215 ILCS 5/363)  (from Ch. 73, par. 975)
7     Sec. 363. Medicare supplement policies; minimum standards.
8     (1) Except as otherwise specifically provided therein,
9 this Section and Section 363a of this Code shall apply to:
10         (a) all Medicare supplement policies and subscriber
11     contracts delivered or issued for delivery in this State on
12     and after January 1, 1989; and
13         (b) all certificates issued under group Medicare
14     supplement policies or subscriber contracts, which
15     certificates are issued or issued for delivery in this
16     State on and after January 1, 1989.
17     This Section shall not apply to "Accident Only" or
18 "Specified Disease" types of policies. The provisions of this
19 Section are not intended to prohibit or apply to policies or
20 health care benefit plans, including group conversion
21 policies, provided to Medicare eligible persons, which
22 policies or plans are not marketed or purported or held to be
23 Medicare supplement policies or benefit plans.
24     (2) For the purposes of this Section and Section 363a, the
25 following terms have the following meanings:
26         (a) "Applicant" means:
27             (i) in the case of individual Medicare supplement
28         policy, the person who seeks to contract for insurance
29         benefits, and
30             (ii) in the case of a group Medicare policy or
31         subscriber contract, the proposed certificate holder.
32         (b) "Certificate" means any certificate delivered or

 

 

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1     issued for delivery in this State under a group Medicare
2     supplement policy.
3         (c) "Medicare supplement policy" means an individual
4     policy of accident and health insurance, as defined in
5     paragraph (a) of subsection (2) of Section 355a of this
6     Code, or a group policy or certificate delivered or issued
7     for delivery in this State by an insurer, fraternal benefit
8     society, voluntary health service plan, or health
9     maintenance organization, other than a policy issued
10     pursuant to a contract under Section 1876 of the federal
11     Social Security Act (42 U.S.C. Section 1395 et seq.) or a
12     policy issued under a demonstration project specified in 42
13     U.S.C. Section 1395ss(g)(1), or any similar organization,
14     that is advertised, marketed, or designed primarily as a
15     supplement to reimbursements under Medicare for the
16     hospital, medical, or surgical expenses of persons
17     eligible for Medicare.
18         (d) "Issuer" includes insurance companies, fraternal
19     benefit societies, voluntary health service plans, health
20     maintenance organizations, or any other entity providing
21     Medicare supplement insurance, unless the context clearly
22     indicates otherwise.
23         (e) "Medicare" means the Health Insurance for the Aged
24     Act, Title XVIII of the Social Security Amendments of 1965.
25     (3) No medicare supplement insurance policy, contract, or
26 certificate, that provides benefits that duplicate benefits
27 provided by Medicare, shall be issued or issued for delivery in
28 this State after December 31, 1988. No such policy, contract,
29 or certificate shall provide lesser benefits than those
30 required under this Section or the existing Medicare Supplement
31 Minimum Standards Regulation, except where duplication of
32 Medicare benefits would result.
33     (3.5) An issuer of a Medicare supplement policy:
34         (a) Shall make available to persons eligible for
35     Medicare by reason of disability each type of Medicare
36     supplement policy the issuer makes available to persons

 

 

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1     eligible for Medicare by reason of age if the applicant
2     applies for a Medicare supplement policy within 6 months
3     after the first day on which the person enrolls for
4     benefits under Medicare part B or within 6 months after
5     receiving notification of retroactive eligibility from the
6     Social Security Administration;
7         (b) Shall not charge individuals who become eligible
8     for Medicare by reason of disability and who are under the
9     age of 65 premium rates for any medical supplemental
10     insurance benefit plan offered by the issuer that exceeds
11     the issuer's premium rates charged for the plan to
12     individuals who are age 65 if the applicant applies for a
13     Medicare supplement policy within 6 months after the first
14     day the person enrolls for benefits under Medicare part B
15     or within 6 months after receiving notification of
16     retroactive eligibility from the Social Security
17     Administration; and
18         (c) May not condition the issuance or effectiveness of
19     a Medicare supplement policy issued to a person eligible
20     for Medicare by reason of disability because of the health
21     status, claims experience, receipt of health care, or
22     medical condition of the applicant if the applicant applies
23     for a Medicare supplement policy during the 6 month period
24     beginning with the first day of the month in which the
25     applicant enrolls for benefits under Medicare part B.
26     (4) Medicare supplement policies or certificates shall
27 have a notice prominently printed on the first page of the
28 policy or attached thereto stating in substance that the
29 policyholder or certificate holder shall have the right to
30 return the policy or certificate within 30 days of its delivery
31 and to have the premium refunded directly to him or her in a
32 timely manner if, after examination of the policy or
33 certificate, the insured person is not satisfied for any
34 reason.
35     (5) A Medicare supplement policy or certificate may not
36 deny a claim for losses incurred more than 6 months from the

 

 

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1 effective date of coverage for a preexisting condition. The
2 policy may not define a preexisting condition more
3 restrictively than a condition for which medical advice was
4 given or treatment was recommended by or received from a
5 physician within 6 months before the effective date of
6 coverage.
7     (6) The Director shall issue reasonable rules and
8 regulations for the following purposes:
9         (a) To establish specific standards for policy
10     provisions of Medicare policies and certificates. The
11     standards shall be in accordance with the requirements of
12     this Code. No requirement of this Code relating to minimum
13     required policy benefits, other than the minimum standards
14     contained in this Section and Section 363a, shall apply to
15     medicare supplement policies and certificates. The
16     standards may cover, but are not limited to the following:
17             (A) Terms of renewability.
18             (B) Initial and subsequent terms of eligibility.
19             (C) Non-duplication of coverage.
20             (D) Probationary and elimination periods.
21             (E) Benefit limitations, exceptions and
22         reductions.
23             (F) Requirements for replacement.
24             (G) Recurrent conditions.
25             (H) Definition of terms.
26             (I) Requirements for issuing rebates or credits to
27         policyholders if the policy's loss ratio does not
28         comply with subsection (7) of Section 363a.
29             (J) Uniform methodology for the calculating and
30         reporting of loss ratio information.
31             (K) Assuring public access to loss ratio
32         information of an issuer of Medicare supplement
33         insurance.
34             (L) Establishing a process for approving or
35         disapproving proposed premium increases.
36             (M) Establishing a policy for holding public

 

 

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1         hearings prior to approval of premium increases.
2             (N) Establishing standards for Medicare Select
3         policies.
4             (O) Prohibited policy provisions not otherwise
5         specifically authorized by statute that, in the
6         opinion of the Director, are unjust, unfair, or
7         unfairly discriminatory to any person insured or
8         proposed for coverage under a medicare supplement
9         policy or certificate.
10         (b) To establish minimum standards for benefits and
11     claims payments, marketing practices, compensation
12     arrangements, and reporting practices for Medicare
13     supplement policies.
14         (c) To implement transitional requirements of Medicare
15     supplement insurance benefits and premiums of Medicare
16     supplement policies and certificates to conform to
17     Medicare program revisions.
18 (Source: P.A. 88-313; 89-484, eff. 6-21-96.)