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
 
                            -3-      LRB093 09240 JLS 09473 b
 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.)