093_HB3658
LRB093 09240 JLS 09473 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
8 standards.
9 (1) Except as otherwise specifically provided therein,
10 this Section and Section 363a of this Code shall apply to:
11 (a) all Medicare supplement policies and subscriber
12 contracts delivered or issued for delivery in this State
13 on and after January 1, 1989; and
14 (b) all certificates issued under group Medicare
15 supplement policies or subscriber contracts, which
16 certificates are issued or issued for delivery in this
17 State on and after January 1, 1989.
18 This Section shall not apply to "Accident Only" or
19 "Specified Disease" types of policies. The provisions of
20 this Section are not intended to prohibit or apply to
21 policies or health care benefit plans, including group
22 conversion policies, provided to Medicare eligible persons,
23 which policies or plans are not marketed or purported or held
24 to be Medicare supplement policies or benefit plans.
25 (2) For the purposes of this Section and Section 363a,
26 the following terms have the following meanings:
27 (a) "Applicant" means:
28 (i) in the case of individual Medicare
29 supplement policy, the person who seeks to contract
30 for insurance benefits, and
31 (ii) in the case of a group Medicare policy or
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1 subscriber contract, the proposed certificate
2 holder.
3 (b) "Certificate" means any certificate delivered
4 or issued for delivery in this State under a group
5 Medicare supplement policy.
6 (c) "Medicare supplement policy" means an
7 individual policy of accident and health insurance, as
8 defined in paragraph (a) of subsection (2) of Section
9 355a of this Code, or a group policy or certificate
10 delivered or issued for delivery in this State by an
11 insurer, fraternal benefit society, voluntary health
12 service plan, or health maintenance organization, other
13 than a policy issued pursuant to a contract under Section
14 1876 of the federal Social Security Act (42 U.S.C.
15 Section 1395 et seq.) or a policy issued under a
16 demonstration project specified in 42 U.S.C. Section
17 1395ss(g)(1), or any similar organization, that is
18 advertised, marketed, or designed primarily as a
19 supplement to reimbursements under Medicare for the
20 hospital, medical, or surgical expenses of persons
21 eligible for Medicare.
22 (d) "Issuer" includes insurance companies,
23 fraternal benefit societies, voluntary health service
24 plans, health maintenance organizations, or any other
25 entity providing Medicare supplement insurance, unless
26 the context clearly indicates otherwise.
27 (e) "Medicare" means the Health Insurance for the
28 Aged Act, Title XVIII of the Social Security Amendments
29 of 1965.
30 (3) No Medicare supplement insurance policy, contract,
31 or certificate, that provides benefits that duplicate
32 benefits provided by Medicare, shall be issued or issued for
33 delivery in this State after December 31, 1988. No such
34 policy, contract, or certificate shall provide lesser
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1 benefits than those required under this Section or the
2 existing Medicare Supplement Minimum Standards Regulation,
3 except where duplication of Medicare benefits would result.
4 (4) Medicare supplement policies or certificates shall
5 have a notice prominently printed on the first page of the
6 policy or attached thereto stating in substance that the
7 policyholder or certificate holder shall have the right to
8 return the policy or certificate within 30 days of its
9 delivery and to have the premium refunded directly to him or
10 her in a timely manner if, after examination of the policy or
11 certificate, the insured person is not satisfied for any
12 reason.
13 (5) A Medicare supplement policy or certificate may not
14 deny a claim for losses incurred more than 6 months from the
15 effective date of coverage for a preexisting condition. The
16 policy may not define a preexisting condition more
17 restrictively than a condition for which medical advice was
18 given or treatment was recommended by or received from a
19 physician within 6 months before the effective date of
20 coverage.
21 (6) An issuer of a Medicare supplement policy shall:
22 (a) not deny coverage to an applicant under 65
23 years of age who becomes eligible for Medicare by reason
24 of disability if the person makes application for a
25 Medicare supplement policy within 6 months of the first
26 day on which the person enrolls for benefits under
27 Medicare Part B; for a person who is retroactively
28 enrolled in Medicare Part B due to a retroactive
29 eligibility decision made by the Social Security
30 Administration, the application must be submitted within
31 a 6-month period beginning with the month in which the
32 person received notice of retroactive eligibility to
33 enroll;
34 (b) make available to persons eligible for Medicare
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1 by reason of disability each type of Medicare supplement
2 policy the issuer makes available to persons eligible for
3 Medicare by reason of age;
4 (c) not charge individuals who become eligible for
5 Medicare by reason of disability and who are under the
6 age of 65 premium rates for any medical supplemental
7 insurance benefit plan offered by the issuer that exceed
8 the issuer's premium rates charged for that plan to
9 individuals who are age 65 or older; and
10 (d) provide the rights granted by items (a) through
11 (d), for 6 months after the effective date of this
12 amendatory Act of the 93rd General Assembly, to any
13 person who had enrolled for benefits under Medicare Part
14 B prior to this amendatory Act of the 93rd General
15 Assembly who otherwise would have been eligible for
16 coverage under item (a).
17 (7) (6) The Director shall issue reasonable rules and
18 regulations for the following purposes:
19 (a) To establish specific standards for policy
20 provisions of Medicare policies and certificates. The
21 standards shall be in accordance with the requirements of
22 this Code. No requirement of this Code relating to
23 minimum required policy benefits, other than the minimum
24 standards contained in this Section and Section 363a,
25 shall apply to medicare supplement policies and
26 certificates. The standards may cover, but are not
27 limited to the following:
28 (A) Terms of renewability.
29 (B) Initial and subsequent terms of
30 eligibility.
31 (C) Non-duplication of coverage.
32 (D) Probationary and elimination periods.
33 (E) Benefit limitations, exceptions and
34 reductions.
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1 (F) Requirements for replacement.
2 (G) Recurrent conditions.
3 (H) Definition of terms.
4 (I) Requirements for issuing rebates or
5 credits to policyholders if the policy's loss ratio
6 does not comply with subsection (7) of Section 363a.
7 (J) Uniform methodology for the calculating
8 and reporting of loss ratio information.
9 (K) Assuring public access to loss ratio
10 information of an issuer of Medicare supplement
11 insurance.
12 (L) Establishing a process for approving or
13 disapproving proposed premium increases.
14 (M) Establishing a policy for holding public
15 hearings prior to approval of premium increases.
16 (N) Establishing standards for Medicare Select
17 policies.
18 (O) Prohibited policy provisions not otherwise
19 specifically authorized by statute that, in the
20 opinion of the Director, are unjust, unfair, or
21 unfairly discriminatory to any person insured or
22 proposed for coverage under a medicare supplement
23 policy or certificate.
24 (b) To establish minimum standards for benefits and
25 claims payments, marketing practices, compensation
26 arrangements, and reporting practices for Medicare
27 supplement policies.
28 (c) To implement transitional requirements of
29 Medicare supplement insurance benefits and premiums of
30 Medicare supplement policies and certificates to conform
31 to Medicare program revisions.
32 (Source: P.A. 88-313; 89-484, eff. 6-21-96.)