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1 | AN ACT concerning insurance.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||
5 | changing Section 363 as follows:
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6 | (215 ILCS 5/363) (from Ch. 73, par. 975)
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7 | Sec. 363. Medicare supplement policies; minimum standards.
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8 | (1) Except as otherwise specifically provided therein, | |||||||||||||||||||
9 | this
Section and Section 363a of this Code shall apply to:
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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
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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.
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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.
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24 | (2) For the purposes of this Section and Section 363a, the | |||||||||||||||||||
25 | following
terms have the following meanings:
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26 | (a) "Applicant" means:
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27 | (i) in the case of individual Medicare supplement | |||||||||||||||||||
28 | policy, the person
who seeks to contract for insurance | |||||||||||||||||||
29 | benefits, and
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30 | (ii) in the case of a group Medicare policy or | |||||||||||||||||||
31 | subscriber contract, the
proposed certificate holder.
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32 | (b) "Certificate" means any certificate delivered or |
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1 | issued for
delivery in this State under a group Medicare
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2 | supplement policy.
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3 | (c) "Medicare supplement policy" means an individual
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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
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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
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16 | hospital, medical, or surgical expenses of persons | ||||||
17 | eligible for Medicare.
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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.
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23 | (e) "Medicare" means the Health Insurance for the Aged | ||||||
24 | Act, Title
XVIII of the Social Security Amendments of 1965.
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25 | (3) No medicare supplement insurance policy, contract, or
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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
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31 | Minimum Standards Regulation, except where duplication of | ||||||
32 | Medicare benefits
would result.
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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.
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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
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32 | timely manner if, after examination of the policy or | ||||||
33 | certificate, the
insured person is not satisfied for any | ||||||
34 | reason.
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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
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4 | given or treatment was recommended by or received from a | ||||||
5 | physician within 6
months before the effective date of | ||||||
6 | coverage.
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7 | (6) The Director shall issue reasonable rules and | ||||||
8 | regulations
for the
following purposes:
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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
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15 | medicare supplement policies and certificates. The | ||||||
16 | standards may
cover, but are not limited to the following:
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17 | (A) Terms of renewability.
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18 | (B) Initial and subsequent terms of eligibility.
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19 | (C) Non-duplication of coverage.
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20 | (D) Probationary and elimination periods.
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21 | (E) Benefit limitations, exceptions and | ||||||
22 | reductions.
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23 | (F) Requirements for replacement.
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24 | (G) Recurrent conditions.
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25 | (H) Definition of terms.
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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.
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29 | (J) Uniform methodology for the calculating and | ||||||
30 | reporting of loss
ratio information.
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31 | (K) Assuring public access to loss ratio | ||||||
32 | information of an issuer of
Medicare supplement | ||||||
33 | insurance.
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34 | (L) Establishing a process for approving or | ||||||
35 | disapproving proposed
premium increases.
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36 | (M) Establishing a policy for holding public |
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1 | hearings prior to
approval of premium increases.
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2 | (N) Establishing standards for Medicare Select | ||||||
3 | policies.
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4 | (O) Prohibited policy provisions not otherwise | ||||||
5 | specifically authorized
by statute that, in the | ||||||
6 | opinion of the Director, are unjust, unfair, or
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7 | unfairly discriminatory to any person insured or | ||||||
8 | proposed for coverage
under a medicare supplement | ||||||
9 | policy or certificate.
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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.
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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.
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18 | (Source: P.A. 88-313; 89-484, eff. 6-21-96.)
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