103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2910

 

Introduced 1/26/2024, by Sen. Laura Fine

 

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

    Amends the Illinois Insurance Code. In provisions concerning Medicare supplement policy minimum standards, provides that if an individual is at least 65 years of age but no more than 75 years of age and has an existing Medicare supplement policy, then the individual is entitled to an annual open enrollment period lasting 45 days, commencing with the individual's birthday, and the individual may purchase any Medicare supplement policy with the same issuer or any affiliate authorized to transact business in the State (instead of only the same issuer) that offers benefits equal to or lesser than those provided by the previous coverage.


LRB103 36030 RPS 66117 b

 

 

A BILL FOR

 

SB2910LRB103 36030 RPS 66117 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing 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,
9this 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
12    on 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
19Section are not intended to prohibit or apply to policies or
20health care benefit plans, including group conversion
21policies, provided to Medicare eligible persons, which
22policies or plans are not marketed or purported or held to be
23Medicare supplement policies or benefit plans.

 

 

SB2910- 2 -LRB103 36030 RPS 66117 b

1    (2) For the purposes of this Section and Section 363a, the
2following terms have the following meanings:
3        (a) "Applicant" means:
4            (i) in the case of individual Medicare supplement
5        policy, the person who seeks to contract for insurance
6        benefits, and
7            (ii) in the case of a group Medicare policy or
8        subscriber contract, the proposed certificate holder.
9        (b) "Certificate" means any certificate delivered or
10    issued for delivery in this State under a group Medicare
11    supplement policy.
12        (c) "Medicare supplement policy" means an individual
13    policy of accident and health insurance, as defined in
14    paragraph (a) of subsection (2) of Section 355a of this
15    Code, or a group policy or certificate delivered or issued
16    for delivery in this State by an insurer, fraternal
17    benefit society, voluntary health service plan, or health
18    maintenance organization, other than a policy issued
19    pursuant to a contract under Section 1876 of the federal
20    Social Security Act (42 U.S.C. Section 1395 et seq.) or a
21    policy issued under a demonstration project specified in
22    42 U.S.C. Section 1395ss(g)(1), or any similar
23    organization, that is advertised, marketed, or designed
24    primarily as a supplement to reimbursements under Medicare
25    for the hospital, medical, or surgical expenses of persons
26    eligible for Medicare.

 

 

SB2910- 3 -LRB103 36030 RPS 66117 b

1        (d) "Issuer" includes insurance companies, fraternal
2    benefit societies, voluntary health service plans, health
3    maintenance organizations, or any other entity providing
4    Medicare supplement insurance, unless the context clearly
5    indicates otherwise.
6        (e) "Medicare" means the Health Insurance for the Aged
7    Act, Title XVIII of the Social Security Amendments of
8    1965.
9    (3) No Medicare supplement insurance policy, contract, or
10certificate, that provides benefits that duplicate benefits
11provided by Medicare, shall be issued or issued for delivery
12in this State after December 31, 1988. No such policy,
13contract, or certificate shall provide lesser benefits than
14those required under this Section or the existing Medicare
15Supplement Minimum Standards Regulation, except where
16duplication of Medicare benefits would result.
17    (4) Medicare supplement policies or certificates shall
18have a notice prominently printed on the first page of the
19policy or attached thereto stating in substance that the
20policyholder or certificate holder shall have the right to
21return the policy or certificate within 30 days of its
22delivery and to have the premium refunded directly to him or
23her in a timely manner if, after examination of the policy or
24certificate, the insured person is not satisfied for any
25reason.
26    (5) A Medicare supplement policy or certificate may not

 

 

SB2910- 4 -LRB103 36030 RPS 66117 b

1deny a claim for losses incurred more than 6 months from the
2effective date of coverage for a preexisting condition. The
3policy may not define a preexisting condition more
4restrictively than a condition for which medical advice was
5given or treatment was recommended by or received from a
6physician within 6 months before the effective date of
7coverage.
8    (6) An issuer of a Medicare supplement policy shall:
9        (a) not deny coverage to an applicant under 65 years
10    of age who meets any of the following criteria:
11            (i) becomes eligible for Medicare by reason of
12        disability if the person makes application for a
13        Medicare supplement policy within 6 months of the
14        first day on which the person enrolls for benefits
15        under Medicare Part B; for a person who is
16        retroactively enrolled in Medicare Part B due to a
17        retroactive eligibility decision made by the Social
18        Security Administration, the application must be
19        submitted within a 6-month period beginning with the
20        month in which the person received notice of
21        retroactive eligibility to enroll;
22            (ii) has Medicare and an employer group health
23        plan (either primary or secondary to Medicare) that
24        terminates or ceases to provide all such supplemental
25        health benefits;
26            (iii) is insured by a Medicare Advantage plan that

 

 

SB2910- 5 -LRB103 36030 RPS 66117 b

1        includes a Health Maintenance Organization, a
2        Preferred Provider Organization, and a Private
3        Fee-For-Service or Medicare Select plan and the
4        applicant moves out of the plan's service area; the
5        insurer goes out of business, withdraws from the
6        market, or has its Medicare contract terminated; or
7        the plan violates its contract provisions or is
8        misrepresented in its marketing; or
9            (iv) is insured by a Medicare supplement policy
10        and the insurer goes out of business, withdraws from
11        the market, or the insurance company or agents
12        misrepresent the plan and the applicant is without
13        coverage;
14        (b) make available to persons eligible for Medicare by
15    reason of disability each type of Medicare supplement
16    policy the issuer makes available to persons eligible for
17    Medicare by reason of age;
18        (c) not charge individuals who become eligible for
19    Medicare by reason of disability and who are under the age
20    of 65 premium rates for any medical supplemental insurance
21    benefit plan offered by the issuer that exceed the
22    issuer's highest rate on the current rate schedule filed
23    with the Division of Insurance for that plan to
24    individuals who are age 65 or older; and
25        (d) provide the rights granted by items (a) through
26    (d), for 6 months after the effective date of this

 

 

SB2910- 6 -LRB103 36030 RPS 66117 b

1    amendatory Act of the 95th General Assembly, to any person
2    who had enrolled for benefits under Medicare Part B prior
3    to this amendatory Act of the 95th General Assembly who
4    otherwise would have been eligible for coverage under item
5    (a).
6    (7) The Director shall issue reasonable rules and
7regulations for the following purposes:
8        (a) To establish specific standards for policy
9    provisions of Medicare policies and certificates. The
10    standards shall be in accordance with the requirements of
11    this Code. No requirement of this Code relating to minimum
12    required policy benefits, other than the minimum standards
13    contained in this Section and Section 363a, shall apply to
14    Medicare supplement policies and certificates. The
15    standards may cover, but are not limited to the following:
16            (A) Terms of renewability.
17            (B) Initial and subsequent terms of eligibility.
18            (C) Non-duplication of coverage.
19            (D) Probationary and elimination periods.
20            (E) Benefit limitations, exceptions and
21        reductions.
22            (F) Requirements for replacement.
23            (G) Recurrent conditions.
24            (H) Definition of terms.
25            (I) Requirements for issuing rebates or credits to
26        policyholders if the policy's loss ratio does not

 

 

SB2910- 7 -LRB103 36030 RPS 66117 b

1        comply with subsection (7) of Section 363a.
2            (J) Uniform methodology for the calculating and
3        reporting of loss ratio information.
4            (K) Assuring public access to loss ratio
5        information of an issuer of Medicare supplement
6        insurance.
7            (L) Establishing a process for approving or
8        disapproving proposed premium increases.
9            (M) Establishing a policy for holding public
10        hearings prior to approval of premium increases.
11            (N) Establishing standards for Medicare Select
12        policies.
13            (O) Prohibited policy provisions not otherwise
14        specifically authorized by statute that, in the
15        opinion of the Director, are unjust, unfair, or
16        unfairly discriminatory to any person insured or
17        proposed for coverage under a medicare supplement
18        policy or certificate.
19        (b) To establish minimum standards for benefits and
20    claims payments, marketing practices, compensation
21    arrangements, and reporting practices for Medicare
22    supplement policies.
23        (c) To implement transitional requirements of Medicare
24    supplement insurance benefits and premiums of Medicare
25    supplement policies and certificates to conform to
26    Medicare program revisions.

 

 

SB2910- 8 -LRB103 36030 RPS 66117 b

1    (8) If an individual is at least 65 years of age but no
2more than 75 years of age and has an existing Medicare
3supplement policy, the individual is entitled to an annual
4open enrollment period lasting 45 days, commencing with the
5individual's birthday, and the individual may purchase any
6Medicare supplement policy with the same issuer or any
7affiliate authorized to transact business in this State that
8offers benefits equal to or lesser than those provided by the
9previous coverage. During this open enrollment period, an
10issuer of a Medicare supplement policy shall not deny or
11condition the issuance or effectiveness of Medicare
12supplemental coverage, nor discriminate in the pricing of
13coverage, because of health status, claims experience, receipt
14of health care, or a medical condition of the individual. An
15issuer shall provide notice of this annual open enrollment
16period for eligible Medicare supplement policyholders at the
17time that the application is made for a Medicare supplement
18policy or certificate. The notice shall be in a form that may
19be prescribed by the Department.
20    (9) Without limiting an individual's eligibility under
21Department rules implementing 42 U.S.C. 1395ss(s)(2)(A), for
22at least 63 days after the later of the applicant's loss of
23benefits or the notice of termination of benefits, including a
24notice of claim denial due to termination of benefits, under
25the State's medical assistance program under Article V of the
26Illinois Public Aid Code, an issuer shall not deny or

 

 

SB2910- 9 -LRB103 36030 RPS 66117 b

1condition the issuance or effectiveness of any Medicare
2supplement policy or certificate that is offered and is
3available for issuance to new enrollees by the issuer; shall
4not discriminate in the pricing of such a Medicare supplement
5policy because of health status, claims experience, receipt of
6health care, or medical condition; and shall not include a
7policy provision that imposes an exclusion of benefits based
8on a preexisting condition under such a Medicare supplement
9policy if the individual:
10        (a) is enrolled for Medicare Part B;
11        (b) was enrolled in the State's medical assistance
12    program during the COVID-19 Public Health Emergency
13    described in Section 5-1.5 of the Illinois Public Aid
14    Code;
15        (c) was terminated or disenrolled from the State's
16    medical assistance program after the COVID-19 Public
17    Health Emergency and the later of the date of termination
18    of benefits or the date of the notice of termination,
19    including a notice of a claim denial due to termination,
20    occurred on, after, or no more than 63 days before the end
21    of either, as applicable:
22            (A) the individual's Medicare supplement open
23        enrollment period described in Department rules
24        implementing 42 U.S.C. 1395ss(s)(2)(A); or
25            (B) the 6-month period described in Section
26        363(6)(a)(i) of this Code; and

 

 

SB2910- 10 -LRB103 36030 RPS 66117 b

1        (d) submits evidence of the date of termination of
2    benefits or notice of termination under the State's
3    medical assistance program with the application for a
4    Medicare supplement policy or certificate.
5    (10) Each Medicare supplement policy and certificate
6available from an insurer on and after the effective date of
7this amendatory Act of the 103rd General Assembly shall be
8made available to all applicants who qualify under
9subparagraph (i) of paragraph (a) of subsection (6) or
10Department rules implementing 42 U.S.C. 1395ss(s)(2)(A)
11without regard to age or applicability of a Medicare Part B
12late enrollment penalty.
13(Source: P.A. 102-142, eff. 1-1-22; 103-102, eff. 6-16-23.)