There is a newer version of the California Code
2007 California Insurance Code Article 6. Medicare Supplement Policies
CA Codes (ins:10192.1-10192.23)
INSURANCE CODESECTION 10192.1-10192.23
10192.1. All Medicare supplement policies and certificates shall
comply with the provisions of subdivision (b) of Section 10291.5 and
Chapter 7 (commencing with Section 10600) of Part 2 of Division 2,
regardless of the situs of the contract.
10192.2. The purpose of this article is to provide for the
reasonable standardization of coverage and simplification of terms
and benefits of Medicare supplement policies, to facilitate public
understanding and comparison of those policies, to eliminate
provisions contained in those policies that may be misleading or
confusing in connection with the purchase of the policies or with the
settlement of claims, and to provide for full disclosures in the
sale of Medicare supplement insurance policies to persons eligible
for Medicare.
10192.3. (a) Except as otherwise provided in this section or in
Sections 10192.7, 10192.12, 10192.13, 10192.16, and 10192.21, this
article shall apply to all Medicare supplement policies advertised,
solicited, or issued for delivery in this state on or after January
1, 2001, and to all certificates delivered in this state under a
group Medicare supplement master policy agreement that have been
advertised, solicited, or issued for delivery in this state on or
after that date.
(b) This article shall not apply to a policy or contract of one or
more employers or labor organizations, or of the trustees of a fund
established by one or more employers or labor organizations, or
combination thereof, for employees or former employees, or a
combination thereof, or for members or former members, or a
combination thereof, of the labor organizations.
(c) This article shall not apply to Medicare supplement policies
subject to Article 3.5 (commencing with Section 1358.1) of Chapter
2.2 of Division 2 of the Health and Safety Code.
(d) The commissioner may, from time to time, promulgate
regulations to implement this article.
10192.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) The person who seeks to contract for insurance benefits, in
the case of an individual Medicare supplement policy.
(2) The proposed certificate holder, in the case of a group
Medicare supplement policy.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of bankruptcy and has
ceased doing business in the state.
(c) "Certificate" means a certificate issued for delivery in this
state under a group Medicare supplement policy.
(d) "Certificate form" means the form on which the certificate is
issued for delivery by the issuer.
(e) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(f) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (Medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage only for accident or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part of the
plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract of insurance:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(g) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(h) "Insolvency" means when an issuer, licensed to transact the
business of insurance in this state, has had a final order of
liquidation entered against it with a finding of insolvency by a
court of competent jurisdiction in the issuer's state of domicile.
(i) "Issuer" includes insurance companies, fraternal benefit
societies, and any other entity delivering, or issuing for delivery,
Medicare supplement policies or certificates in this state, except
entities subject to Article 3.5 (commencing with Section 1358) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
(j) "Medicare" means the Health Insurance for the Aged Act, Title
XVIII of the Social Security Amendments of 1965, as amended.
(k) "Medicare Advantage plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(l) "Medicare supplement policy" means a group or individual
policy of health insurance, other than a policy issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Section 1395mm) or an issued policy under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
"Medicare supplement policy" does not include a Medicare Advantage
plan established under Medicare Part C, an outpatient prescription
drug plan established under Medicare Part D, or a health care
prepayment plan that provides benefits pursuant to an agreement under
subparagraph (A) of paragraph (1) of subsection (a) of Section 1833
of the Social Security Act.
(m) "Policy form" means the form on which the policy is issued for
delivery by the issuer.
(n) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
10192.5. A policy or certificate shall not be advertised,
solicited, or issued for delivery as a Medicare supplement policy or
certificate unless the policy or certificate contains definitions or
terms that conform to the requirements of this section.
(a) (1) "Accident," "accidental injury," or "accidental means"
shall be defined to employ "result" language and shall not include
words that establish an accidental means test or use words such as
"external, violent, visible wounds" or other similar words of
description or characterization.
(2) The definition shall not be more restrictive than the
following: "injury or injuries for which benefits are provided means
accidental bodily injury sustained by the insured person that is the
direct result of an accident, independent of disease or bodily
infirmity or any other cause, and occurs while insurance coverage is
in force."
(3) The definition may provide that injuries shall not include
injuries for which benefits are provided or available under any
workers' compensation, employer's liability, or similar law, unless
prohibited by law.
(b) "Benefit period" or "Medicare benefit period" shall not be
defined more restrictively than as defined in the Medicare Program.
(c) "Convalescent nursing home," "extended care facility," or
"skilled nursing facility" shall not be defined more restrictively
than as defined in the Medicare Program.
(d) (1) "Health care expenses" means expenses of health
maintenance organizations associated with the delivery of health care
services, which expenses are analogous to incurred losses of
insurers.
(2) "Health care expenses" shall not include any of the following:
(A) Home office and overhead costs.
(B) Advertising costs.
(C) Commissions and other acquisition costs.
(D) Taxes.
(E) Capital costs.
(F) Administrative costs.
(G) Claims processing costs.
(e) "Hospital" may be defined in relation to its status,
facilities, and available services or to reflect its accreditation by
the Joint Commission on Accreditation of Hospitals, but not more
restrictively than as defined in the Medicare Program.
(f) "Medicare" shall be defined in the policy and certificate.
"Medicare" may be substantially defined as "The Health Insurance for
the Aged Act, Title XVIII of the Social Security Amendments of 1965,
as amended," or "Title I, Part I of Public Law 89-97, as enacted by
the 89th Congress and popularly known as the Health Insurance for the
Aged Act, as amended," or words of similar import.
(g) "Medicare eligible expenses" shall mean expenses of the kinds
covered by Medicare Parts A and B, to the extent recognized as
reasonable and medically necessary by Medicare.
(h) "Physician" shall not be defined more restrictively than as
defined in the Medicare Program.
(i) (1) "Sickness" shall not be defined more restrictively than as
follows: "sickness means illness or disease of an insured person
that first manifests itself after the effective date of insurance and
while the insurance is in force."
(2) The definition may be further modified to exclude sicknesses
or diseases for which benefits are provided under any workers'
compensation, occupational disease, employer's liability, or similar
law.
10192.55. (a) With regard to Medicare supplement policies, all
insurers, brokers, agents, and others engaged in the business of
insurance owe a policyholder or a prospective policyholder a duty of
honesty, and a duty of good faith and fair dealing.
(b) Conduct of an insurer, broker, or agent during the offer and
sale of a Medicare supplement policy previous to the purchase is
relevant to any action alleging a breach of the duty of honesty, and
a duty of good faith and fair dealing set forth in subdivision (a).
10192.6. (a) Except for permitted preexisting condition clauses as
described in Sections 10192.7 and 10192.8, a policy or certificate
shall not be advertised, solicited, or issued for delivery as a
Medicare supplement policy if the policy or certificate contains
limitations or exclusions on coverage that are more restrictive than
those of Medicare.
(b) A Medicare supplement policy or certificate shall not use
waivers to exclude, limit, or reduce coverage or benefits for
specifically named or described preexisting diseases or physical
conditions.
(c) A Medicare supplement policy or certificate in force shall not
contain benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 10192.8, a Medicare supplement policy with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current policyholders, at the option of
the policyholder, who do not enroll in Medicare Part D.
(2) A Medicare supplement policy with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement policy
with benefits for outpatient prescription drugs shall not be renewed
after the policyholder enrolls in Medicare Part D unless both of the
following conditions exist:
(A) The policy is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
10192.7. A policy or certificate shall not be advertised,
solicited, or issued for delivery as a Medicare supplement policy or
certificate prior to January 1, 2001, unless it meets or exceeds
requirements applicable pursuant to this code that were in effect
prior to that date.
10192.8. The following standards are applicable to all Medicare
supplement policies or certificates advertised, solicited, or issued
for delivery on or after January 1, 2001. A policy or certificate
shall not be advertised, solicited, or issued for delivery as a
Medicare supplement policy or certificate unless it complies with
these benefit standards.
(a) The following general standards apply to Medicare supplement
policies and certificates and are in addition to all other
requirements of this article:
(1) A Medicare supplement policy or certificate shall not exclude
or limit benefits for losses incurred more than six months from the
effective date of coverage because it involved a preexisting
condition. The policy or certificate shall not define a preexisting
condition more restrictively than a condition for which medical
advice was given or treatment was recommended by or received from a
physician within six months before the effective date of coverage.
(2) A Medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different basis
than losses resulting from accidents.
(3) A Medicare supplement policy or certificate shall provide that
benefits designed to cover cost-sharing amounts under Medicare will
be changed automatically to coincide with any changes in the
applicable Medicare deductible amount and copayment percentage
factors. Premiums may be modified to correspond with those changes.
(4) A Medicare supplement policy or certificate shall not provide
for termination of coverage of a spouse solely because of the
occurrence of an event specified for termination of coverage of the
insured, other than the nonpayment of premium.
(5) Each Medicare supplement policy shall be guaranteed renewable
or noncancelable.
(A) The issuer shall not cancel or nonrenew the policy solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the policy for any
reason other than nonpayment of premium or misrepresentation which is
shown by the issuer to be material to the acceptance for coverage.
The contestability period for Medicare supplement insurance shall be
two years.
(C) If the Medicare supplement policy is terminated by the master
policyholder and is not replaced as provided under subparagraph (E),
the issuer shall offer certificate holders an individual Medicare
supplement policy that, at the option of the certificate holder,
either provides for continuation of the benefits contained in the
group policy or provides for benefits that otherwise meet the
requirements of one of the standardized policies defined in this
article.
(D) If an individual is a certificate holder in a group Medicare
supplement policy and membership in the group is terminated, the
issuer shall either offer the certificate holder the conversion
opportunity described in subparagraph (C) or, at the option of the
group policyholder, shall offer the certificate holder continuation
of coverage under the group policy.
(E) (i) If a group Medicare supplement policy is replaced by
another group Medicare supplement policy purchased by the same
policyholder, the issuer of the replacement policy shall offer
coverage to all persons covered under the old group policy on its
date of termination. Coverage under the new policy shall not result
in any exclusion for preexisting conditions that would have been
covered under the group policy being replaced.
(ii) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate that has been in
force for six months or more, the replacing issuer shall not impose
an exclusion or limitation based on a preexisting condition. If the
original coverage has been in force for less than six months, the
replacing issuer shall waive any time period applicable to
preexisting conditions, waiting periods, elimination periods, or
probationary periods in the new policy or certificate to the extent
the time was spent under the original coverage.
(F) If a Medicare supplement policy eliminates an outpatient
prescription drug benefit as a result of requirements imposed by the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (P.L. 108-173), the policy as modified as a result of that act
shall be deemed to satisfy the guaranteed renewal requirements of
this paragraph.
(6) Termination of a Medicare supplement policy or certificate
shall be without prejudice to any continuous loss that commenced
while the policy was in force, but the extension of benefits beyond
the period during which the policy was in force may be predicated
upon the continuous total disability of the insured, limited to the
duration of the policy benefit period, if any, or to payment of the
maximum benefits. Receipt of Medicare Part D benefits shall not be
considered in determining a continuous loss.
(7) (A) (i) A Medicare supplement policy or certificate shall
provide that benefits and premiums under the policy or certificate
shall be suspended at the request of the policyholder or certificate
holder for the period, not to exceed 24 months, in which the
policyholder or certificate holder has applied for and is determined
to be entitled to Medi-Cal or Medicaid under Title XIX of the federal
Social Security Act, but only if the policyholder or certificate
holder notifies the issuer of the policy or certificate within 90
days after the date the individual becomes entitled to assistance.
Upon receipt of timely notice, the insurer shall return directly to
the insured that portion of the premium attributable to the period of
Medi-Cal or Medicaid eligibility, subject to adjustment for paid
claims. If suspension occurs and if the policyholder or certificate
holder loses entitlement to Medi-Cal or Medicaid, the policy or
certificate shall be automatically reinstituted, effective as of the
date of termination of entitlement, as of the termination of
entitlement if the policyholder or certificate holder provides notice
of loss of entitlement within 90 days after the date of loss and
pays the premium attributable to the period, effective as of the date
of termination of entitlement, or equivalent coverage shall be
provided if the prior form is no longer available.
(ii) A Medicare supplement policy or certificate shall provide
that benefits and premiums under the policy or certificate shall be
suspended at the request of the policyholder or certificate holder
for any period that may be provided by federal regulation if the
policyholder is entitled to benefits under Section 226(b) of the
Social Security Act and is covered under a group health plan, as
defined in Section 1862(b)(1)(A)(v) of the Social Security Act. If
suspension occurs and the policyholder or certificate holder loses
coverage under the group health plan, the policy or certificate shall
be automatically reinstituted, effective as of the date of loss of
coverage if the policyholder provides notice within 90 days of the
date of the loss of coverage.
(B) Reinstitution of coverages:
(i) Shall not provide for any waiting period with respect to
treatment of preexisting conditions.
(ii) Shall provide for resumption of coverage that is
substantially equivalent to coverage in effect before the date of
suspension. If the suspended Medicare supplement policy provided
coverage for outpatient prescription drugs, reinstitution of the
policy for a Medicare Part D enrollee shall not include coverage for
outpatient prescription drugs but shall otherwise provide coverage
that is substantially equivalent to the coverage in effect before the
date of suspension.
(iii) Shall provide for classification of premiums on terms at
least as favorable to the policyholder or certificate holder as the
premium classification terms that would have applied to the
policyholder or certificate holder had the coverage not been
suspended.
(8) No Medicare supplement policy may limit coverage exclusively
to a single disease or affliction.
(b) With respect to the standards for basic (core) benefits for
benefit plans A to J, inclusive, every issuer shall make available a
policy or certificate including only the following basic "core"
package of benefits to each prospective insured. An issuer may make
available to prospective insureds any of the other Medicare
supplement insurance benefit plans in addition to the basic core
package, but not in lieu of it. However, the benefits described in
paragraphs (6) and (7) shall not be offered so long as California is
required to disallow these benefits for Medicare beneficiaries by the
Centers for Medicare and Medicaid Services or other agent of the
federal government under Section 1395ss of Title 42 of the United
States Code.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day to the 90th day, inclusive, in any Medicare benefit period.
(2) Coverage of Part A Medicare eligible expenses incurred for
hospitalization to the extent not covered by Medicare for each
Medicare lifetime inpatient reserve day used.
(3) Upon exhaustion of the Medicare hospital inpatient coverage
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
appropriate Medicare standard of payment, subject to a lifetime
maximum benefit of an additional 365 days. The provider shall accept
the issuer's payment as payment in full and may not bill the insured
for any balance.
(4) Coverage under Medicare Parts A and B for the reasonable cost
of the first three pints of blood, or equivalent quantities of packed
red blood cells, as defined under federal regulations, unless
replaced in accordance with federal regulations.
(5) Coverage for the coinsurance amount, or in the case of
hospital outpatient department services, the copayment amount, of
Medicare eligible expenses under Part B regardless of hospital
confinement, subject to the Medicare Part B deductible.
(6) Coverage of the actual cost, up to the legally billed amount,
of an annual mammogram as provided in Section 10123.81, to the extent
not paid by Medicare.
(7) Coverage of the actual cost, up to the legally billed amount,
of an annual cervical cancer screening test as provided in Section
10123.18, to the extent not paid by Medicare.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B to J, inclusive, only as provided
by Section 10192.9.
(1) With respect to the Medicare Part A deductible, coverage for
all of the Medicare Part A inpatient hospital deductible amount per
benefit period.
(2) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(3) With respect to the Medicare Part B deductible, coverage for
all of the Medicare Part B deductible amount per calendar year
regardless of hospital confinement.
(4) With respect to 80 percent of the Medicare Part B excess
charges, coverage for 80 percent of the difference between the actual
Medicare Part B charge as billed, not to exceed any charge
limitation established by the Medicare Program or state law, and the
Medicare-approved Part B charge. If the insurer limits payment to a
limiting charge, the insurer has the burden to establish that amount
as the legal limit.
(5) With respect to 100 percent of the Medicare Part B excess
charges, coverage for all of the difference between the actual
Medicare Part B charge as billed, not to exceed any charge limitation
established by the Medicare Program or state law, and the
Medicare-approved Part B charge. If the insurer limits payment to a
limiting charge, the insurer has the burden to establish that amount
as the legal limit.
(6) With respect to the basic outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two hundred fifty dollar (0) calendar year
deductible, to a maximum of one thousand two hundred fifty dollars
(,250) in benefits received by the insured per calendar year, to
the extent not covered by Medicare. On and after January 1, 2006, no
Medicare supplement policy may be sold or issued if it includes a
prescription drug benefit.
(7) With respect to the extended outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two hundred fifty dollar (0) calendar year
deductible, to a maximum of three thousand dollars (,000) in
benefits received by the insured per calendar year, to the extent not
covered by Medicare. On and after January 1, 2006, no Medicare
supplement policy may be sold or issued if it includes a prescription
drug benefit.
(8) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent of the billed charges for Medicare-eligible expenses for
medically necessary emergency hospital, physician, and medical care
received in a foreign country, which care would have been covered by
Medicare if provided in the United States and which care began during
the first 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of two hundred fifty
dollars (0), and a lifetime maximum benefit of fifty thousand
dollars (,000). For purposes of this benefit, "emergency care"
shall mean care needed immediately because of an injury or an illness
of sudden and unexpected onset.
(9) With respect to the following, reimbursement shall be for the
actual charges up to 100 percent of the Medicare-approved amount for
each service, as if Medicare were to cover the service as identified
in American Medical Association Current Procedural Terminology (AMA
CPT) codes, up to a maximum of one hundred twenty dollars (0)
annually under this benefit, however, this benefit shall not include
payment for any procedure covered by Medicare:
(A) An annual clinical preventive medical history and physical
examination that may include tests and services from subparagraph (B)
and patient education to address preventive health care measures.
(B) The following screening tests or preventive services that are
not covered by Medicare, the selection and frequency of which are
determined to be medically appropriate by the attending physician:
(i) Fecal occult blood test.
(ii) Mammogram.
(C) Influenza vaccine administered at any appropriate time during
the year.
(10) With respect to the at-home recovery benefit, coverage for
the actual charges up to forty dollars () per visit and an annual
maximum of one thousand six hundred dollars (,600) per year to
provide short-term, at-home assistance with activities of daily
living for those recovering from an illness, injury, or surgery.
(A) For purposes of this benefit, the following definitions shall
apply:
(i) "Activities of daily living" include, but are not limited to,
bathing, dressing, personal hygiene, transferring, eating,
ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings.
(ii) "Care provider" means a duly qualified or licensed home
health aide or homemaker, or a personal care aide or nurse provided
through a licensed home health care agency or referred by a licensed
referral agency or licensed nurses registry.
(iii) "Home" shall mean any place used by the insured as a place
of residence, provided that the place would qualify as a residence
for home health care services covered by Medicare. A hospital or
skilled nursing facility shall not be considered the insured's place
of residence.
(iv) "At-home recovery visit" means the period of a visit required
to provide at-home recovery care, without any limit on the duration
of the visit, except that each consecutive four hours in a 24-hour
period of services provided by a care provider is one visit.
(B) With respect to coverage requirements and limitations, the
following shall apply:
(i) At-home recovery services provided shall be primarily services
that assist in activities of daily living.
(ii) The insured's attending physician shall certify that the
specific type and frequency of at-home recovery services are
necessary because of a condition for which a home care plan of
treatment was approved by Medicare.
(iii) Coverage is limited to the following:
(I) No more than the number and type of at-home recovery visits
certified as necessary by the insured's attending physician. The
total number of at-home recovery visits shall not exceed the number
of Medicare-approved home health care visits under a
Medicare-approved home care plan of treatment.
(II) The actual charges for each visit up to a maximum
reimbursement of forty dollars () per visit.
(III) One thousand six hundred dollars (,600) per calendar year.
(IV) Seven visits in any one week.
(V) Care furnished on a visiting basis in the insured's home.
(VI) Services provided by a care provider as defined in
subparagraph (A).
(VII) At-home recovery visits while the insured is covered under
the policy or certificate and not otherwise excluded.
(VIII) At-home recovery visits received during the period the
insured is receiving Medicare-approved home care services or no more
than eight weeks after the service date of the last Medicare-approved
home health care visit.
(C) Coverage is excluded for the following:
(i) Home care visits paid for by Medicare or other government
programs.
(ii) Care provided by family members, unpaid volunteers, or
providers who are not care providers.
(d) The standardized Medicare supplement benefit plan "K" shall
consist of the following benefits:
(1) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each day used from the 61st to the 90th day,
inclusive, in any Medicare benefit period.
(2) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each Medicare lifetime inpatient reserve day
used from the 91st to the 150th day, inclusive, in any Medicare
benefit period.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate, or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment for this benefit as payment in full and shall not bill the
insured for any balance.
(4) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (10) is met.
(5) With respect to skilled nursing facility care, coverage for
50 percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (10)
is met.
(6) With respect to hospice care, coverage for 50 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (10) is
met.
(7) Coverage for 50 percent, under Medicare Part A or B, of the
reasonable cost of the first three pints of blood or equivalent
quantities of packed red blood cells, as defined under federal
regulations, unless replaced in accordance with federal regulations,
until the out-of-pocket limitation described in paragraph (10) is
met.
(8) Except for coverage provided in paragraph (9), coverage for
50 percent of the cost sharing otherwise applicable under Medicare
Part B after the policyholder pays the Part B deductible, until the
out-of-pocket limitation is met as described in paragraph (10).
(9) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services, after the policyholder pays the Medicare Part
B deductible.
(10) Coverage of 100 percent of all cost sharing under Medicare
Parts A and B for the balance of the calendar year after the
individual has reached the out-of-pocket limitation on annual
expenditures under Medicare Parts A and B of four thousand dollars
(,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the secretary.
(e) The standardized Medicare supplement benefit plan "L" shall
consist of the following benefits:
(1) The benefits described in paragraphs (1), (2), (3), and (9) of
subdivision (d).
(2) With respect to the Medicare Part A deductible, coverage for
75 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (8) is met.
(3) With respect to skilled nursing facility care, coverage for
75 percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (8)
is met.
(4) With respect to hospice care, coverage for 75 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (8) is met.
(5) Coverage for 75 percent, under Medicare Part A or B, of the
reasonable cost of the first three pints of blood or equivalent
quantities of packed red blood cells, as defined under federal
regulations, unless replaced in accordance with federal regulations,
until the out-of-pocket limitation described in paragraph (8) is met.
(6) Except for coverage provided in paragraph (7), coverage for 75
percent of the cost sharing otherwise applicable under Medicare Part
B after the policyholder pays the Part B deductible until the
out-of-pocket limitation described in paragraph (8) is met.
(7) Coverage for 100 percent of the cost sharing for Medicare Part
B preventive services after the policyholder pays the Part B
deductible.
(8) Coverage of 100 percent of the cost sharing for Medicare Parts
A and B for the balance of the calendar year after the individual
has reached the out-of-pocket limitation on annual expenditures under
Medicare Parts A and B of two thousand dollars (,000) in 2006,
indexed each year by the appropriate inflation adjustment specified
by the secretary.
(f) An issuer shall prominently indicate through text edits, or by
other means acceptable to the commissioner, an amendment made to a
Medicare supplement policy form that the department previously
approved on the basis that the amendment is consistent with this
section. The department may, in its discretion, restrict its review
to amendments made to Medicare supplement policy forms that have not
previously been found consistent with this section in order to
facilitate the availability of amended policy forms that are
consistent with the federal Medicare Modernization Act. The
department shall not restrict its review if the amendment makes
additional changes to the Medicare supplement policy form.
10192.9. (a) An issuer shall make available to each prospective
policyholder and certificate holder a policy form or certificate form
containing only the basic (core) benefits, as defined in subdivision
(b) of Section 10192.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 10192.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to J,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 10192.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 10192.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 10192.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
10192.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, and medically necessary emergency care in a foreign
country as defined in paragraphs (1), (2), (3), and (8) of
subdivision (c) of Section 10192.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and the at-home recovery benefit
as defined in paragraphs (1), (2), (8), and (10) of subdivision (c)
of Section 10192.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and preventive medical care as
defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of
Section 10192.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
10192.8, respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country
as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision
(c) of Section 10192.8, respectively. The annual high deductible plan
F deductible shall consist of out-of-pocket expenses, other than
premiums, for services covered by the Medicare supplement plan F
policy, and shall be in addition to any other specific benefit
deductibles. The annual high deductible Plan F deductible shall be
one thousand five hundred dollars (,500) for 1998 and 1999, and
shall be based on the calendar year, as adjusted annually thereafter
by the secretary to reflect the change in the Consumer Price Index
for all urban consumers for the 12-month period ending with August of
the preceding year, and rounded to the nearest multiple of ten
dollars ().
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent of the Medicare
Part B excess charges, medically necessary emergency care in a
foreign country, and the at-home recovery benefit as defined in
paragraphs (1), (2), (4), (8), and (10) of Section 10192.8,
respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
Section 10192.8, respectively. The outpatient prescription drug
benefit shall not be included in a Medicare supplement policy sold on
or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 10192.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement policy sold on or after January 1,
2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 10192.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement policy sold on or after January 1,
2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care benefit,
and at-home recovery benefit as defined in paragraphs (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 10192.8,
respectively. The annual high deductible plan J deductible shall
consist of out-of-pocket expenses, other than premiums, for services
covered by the Medicare supplement plan J policy, and shall be in
addition to any other specific benefit deductibles. The annual
deductible shall be one thousand five hundred dollars (,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars (). The outpatient prescription drug
benefit shall not be included in a Medicare supplement policy sold on
or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
10192.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
10192.8.
(f) An issuer may, with the prior approval of the commissioner,
offer policies or certificates with new or innovative benefits in
addition to the benefits provided in a policy or certificate that
otherwise complies with the applicable standards. The new or
innovative benefits may include benefits that are appropriate to
Medicare supplement insurance, that are not otherwise available and
that are cost-effective and offered in a manner that is consistent
with the goal of simplification of Medicare supplement policies. On
and after January 1, 2006, the innovative benefit shall not include
an outpatient prescription drug benefit.
10192.10. (a) (1) This section shall apply to Medicare Select
policies and certificates, as defined in this section.
(2) A policy or certificate shall not be advertised as a Medicare
Select policy or certificate unless it meets the requirements of this
section.
(b) For the purposes of this section:
(1) "Appeal" means dissatisfaction expressed in writing by an
individual insured under a Medicare Select policy or certificate with
the administration, claims practices, or provision of services
concerning a Medicare Select issuer or its network providers.
(2) "Complaint" means any dissatisfaction expressed by an
individual concerning a Medicare Select issuer or its network
providers.
(3) "Medicare Select issuer" means an issuer offering, seeking to
offer, advertising, marketing, soliciting, or issuing a Medicare
Select policy or certificate.
(4) "Medicare Select policy" or "Medicare Select certificate"
means respectively a Medicare supplement policy or certificate that
contains restricted network provisions.
(5) "Network provider" means a provider of health care, or a group
of providers of health care, which has entered into a written
agreement with the issuer or other entity to provide benefits insured
under a Medicare Select policy.
(6) "Restricted network provision" means any provision that
conditions the payment of benefits, in whole or in part, on the use
of network providers.
(7) "Service area" means the geographic area approved by the
commissioner within which an issuer is authorized to offer a Medicare
Select policy.
(8) "Grievance" means a written complaint registered by an
individual for resolution under the formal grievance procedure, which
may involve, but is not limited to, the administration, claims
practices, or provision of services by the issuer or its network
providers.
(9) "Medicare Select coverage" means Medicare supplement coverage
through a preferred provider organization or any other type of
restricted network, which coverage has been approved by the
commissioner under this section.
(10) "Preferred provider organization" means a health care
provider or an entity contracting with health care providers that (A)
establishes alternative or discounted rates of payment, (B) offers
the insureds certain advantages for selecting the member providers,
or (C) withholds from the insureds certain advantages if they choose
providers other than the member providers. Organizations regulated as
Medicare Select include, but are not limited to, provider groups,
hospital marketing plans, and organizations that are formed or
operated by insurers or third-party administrators.
(c) The commissioner may authorize an issuer to offer a Medicare
Select policy or certificate pursuant to this section if the
commissioner finds that the issuer has satisfied all of the
requirements of this section.
(d) A Medicare Select issuer shall not issue a Medicare Select
policy or certificate in this state until its plan of operation has
been approved by the commissioner.
(e) A Medicare Select issuer shall file a proposed plan of
operation with the commissioner in a format prescribed by the
commissioner. The plan of operation shall contain at least the
following information:
(1) Evidence that all covered services that are subject to
restricted network provisions are available and accessible through
network providers, including a demonstration of all of the following:
(A) That services can be provided by network providers with
reasonable promptness with respect to geographic location, hours of
operation, and afterhour care. The hours of operation and
availability of afterhour care shall reflect usual practice in the
local area. Geographic availability shall reflect the usual travel
times within the community.
(B) That the number of network providers in the service area is
sufficient, with respect to current and expected policyholders, as to
either of the following:
(i) To deliver adequately all services that are subject to a
restricted network provision.
(ii) To make appropriate referrals.
(C) There are written agreements with network providers describing
specific responsibilities.
(D) Emergency care is available 24 hours per day and seven days
per week.
(E) In the case of covered services that are subject to a
restricted network provision and are provided on a prepaid basis,
that there are written agreements with network providers prohibiting
the providers from billing or otherwise seeking reimbursement from or
recourse against any individual insured under a Medicare Select
policy or certificate.
This subparagraph shall not apply to supplemental charges or
coinsurance amounts as stated in the Medicare Select policy or
certificate.
(2) A statement or map providing a clear description of the
service area.
(3) A description of the appeal or grievance procedure to be
utilized.
(4) A description of the quality assurance program, including all
of the following:
(A) The formal organizational structure.
(B) The written criteria for selection, retention, and removal of
network providers.
(C) The procedures for evaluating quality of care provided by
network providers, and the process to initiate corrective action when
warranted.
(5) A list and description, by specialty, of the network
providers.
(6) Copies of the written information proposed to be used by the
issuer to comply with subdivision (i).
(7) Any other information requested by the commissioner.
(f) (1) A Medicare Select issuer shall file any proposed changes
to the plan of operation, except for changes to the list of network
providers, with the commissioner prior to implementing the changes.
Changes shall be considered approved by the commissioner after 30
days unless specifically disapproved.
(2) An updated list of network providers shall be filed at the
commissioner's request, but at least quarterly.
(g) A Medicare Select policy or certificate shall not restrict
payment for covered services provided by nonnetwork providers if:
(1) The services are for symptoms requiring emergency care or are
immediately required for an unforeseen illness, injury, or condition.
(2) It is not reasonable to obtain services through a network
provider.
(h) A Medicare Select policy or certificate shall provide payment
for full coverage under the policy for covered services that are not
available through network providers.
(i) A Medicare Select issuer shall make full and fair disclosure
in writing of the provisions, restrictions, and limitations of the
Medicare Select policy or certificate to each applicant. This
disclosure shall include at least the following:
(1) An outline of coverage sufficient to permit the applicant to
compare the coverage and premiums of the Medicare Select policy or
certificate with both of the following:
(A) Other Medicare supplement policies or certificates offered by
the issuer.
(B) Other Medicare Select policies or certificates.
(2) A description, including address, telephone number, and hours
of operation, of the network providers, including primary care
physicians, specialty physicians, hospitals, and other providers.
(3) A description of the restricted network provisions, including
payments for coinsurance and deductibles when providers other than
network providers are utilized. The description shall inform the
applicant that expenses incurred when using out-of-network providers
are excluded from the out-of-pocket annual limit in benefit plans K
and L, unless the policy or certificate provides otherwise.
(4) A description of coverage for emergency and urgently needed
care and other out-of-service area coverage.
(5) A description of limitations on referrals to restricted
network providers and to other providers.
(6) A description of the policyholder's or certificate holder's
rights to purchase any other Medicare supplement policy or
certificate otherwise offered by the issuer.
(7) A description of the Medicare Select issuer's quality
assurance, grievance, and appeal procedure.
(j) Prior to the sale of a Medicare Select policy or certificate,
a Medicare Select issuer shall obtain from the applicant a signed and
dated form stating that the applicant has received the information
provided pursuant to subdivision (i) and that the applicant
understands the restrictions of the Medicare Select policy or
certificate. Acknowledgments shall be maintained by the insurer for
at least five years in accordance with Section 10508.
(k) A Medicare Select issuer shall have and use procedures for
hearing complaints and resolving written appeals and grievances from
the insureds. The procedures shall be aimed at mutual agreement for
settlement and may include arbitration procedures.
(1) The appeal and grievance procedure shall be described in the
policy and certificates and in the outline of coverage.
(2) At the time the policy or certificate is issued, the issuer
shall provide detailed information to the policyholder or certificate
holder describing how an appeal or grievance may be registered with
the issuer.
(3) Appeals or grievances shall be considered in a timely manner
and shall be transmitted to appropriate fiduciaries who have
authority to fully investigate the issue and take corrective action.
(4) If an appeal or grievance is found to be valid, corrective
action shall be taken promptly.
(5) All concerned parties shall be notified about the results of
an appeal or grievance.
(6) The issuer shall report no later than each March 31st to the
commissioner regarding its appeal or grievance procedure. The report
shall be in a format prescribed by the commissioner and shall contain
the number of appeals or grievances filed in the past year and a
summary of the subject, nature, and resolution of those appeals or
grievances.
(7) Detailed information describing in writing how to register an
appeal or grievance shall be provided to the insured prior to, or
simultaneously with, the issuance of the policy or certificate.
(8) The issuer shall maintain records of each appeal or grievance
for at least five years.
(l) At the time of initial purchase, a Medicare Select issuer
shall make available to each applicant for a Medicare Select policy
or certificate the opportunity to purchase any Medicare supplement
policy or certificate otherwise offered by the issuer.
(m) (1) At the request of an individual insured under a Medicare
Select policy or certificate, a Medicare Select issuer shall make
available to the individual insured the opportunity to purchase a
Medicare supplement policy or certificate offered by the issuer that
has comparable or lesser benefits and that does not contain a
restricted network provision. The issuer shall make the policies or
certificates available without requiring evidence of insurability
after the Medicare Select policy or certificate has been in force for
six months, unless the replacement policy or certificate includes
at-home recovery benefits that were not included in the Medicare
Select coverage.
(2) For the purposes of this subdivision, a Medicare supplement
policy or certificate will be considered to have comparable or lesser
benefits unless it contains one or more significant benefits not
included in the Medicare Select policy or certificate being replaced.
For the purposes of this paragraph, a significant benefit means
coverage for the Medicare Part A deductible, coverage for at-home
recovery services, or coverage for Medicare Part B excess charges.
(n) Medicare Select policies and certificates shall provide for
continuation of coverage in the event the commissioner determines
that Medicare Select policies and certificates issued pursuant to
this section should be discontinued due to either the failure of the
Medicare Select program to be reauthorized under law or its
substantial amendment.
(1) Each Medicare Select issuer shall make available to each
individual insured under a Medicare Select policy or certificate the
opportunity to purchase any Medicare supplement policy or certificate
offered by the issuer that has comparable or lesser benefits and
that does not contain a restricted network provision. The issuer
shall make the policies and certificates available without requiring
evidence of insurability.
(2) For the purposes of this subdivision, a Medicare supplement
policy or certificate will be considered to have comparable or lesser
benefits unless it contains one or more significant benefits not
included in the Medicare Select policy or certificate being replaced.
For the purposes of this paragraph, a significant benefit means
coverage for the Medicare Part A deductible, coverage for at-home
recovery services, or coverage for Medicare Part B excess charges.
(o) A Medicare Select issuer shall comply with reasonable requests
for data made by state or federal agencies, including the United
States Department of Health and Human Services for the purpose of
evaluating the Medicare Select program.
(p) The commissioner may grant special Medicare Select status to
plans of guaranteed renewable Medicare supplement coverage provided
through a preferred provider organization, which plans were offered
to the public or in force before the effective date of this section,
if the commissioner determines that the applicants will receive
benefits and consumer protections that are substantially equivalent
to those in other Medicare Select plans identified in this section,
and if the issuer satisfies the following requirements:
(1) The issuer shall apply within one year of the effective date
of this section by submitting to the commissioner the following
items:
(A) The current plan of operation as defined in subdivision (e).
(B) If the written disclosures of subdivision (i) have not been
delivered to each applicant as required, the issuer's plan to
accomplish full disclosure to every insured and to achieve
substantial compliance with subdivision (j).
(C) The issuer's statement of intent to comply with subdivision
(f).
(D) If the plan of operation does not comply with the standards of
subdivision (g), (h), (k), (l), or (m), the issuer's plan for
achieving substantial compliance with these subdivisions for every
insured.
(2) The issuer shall alter the plan as requested by the
commissioner in order to bring the plan into substantial compliance
with Medicare Select standards.
(3) The issuer shall issue disclosures or other notices to its
insureds regarding its status as Medicare Select as ordered by the
commissioner.
(4) The issuer shall provide data as provided in subdivision (o).
10192.11. (a) (1) An issuer shall not deny or condition the
issuance or effectiveness of any Medicare supplement policy or
certificate available for sale in this state, nor discriminate in the
pricing of a policy or certificate because of the health status,
claims experience, receipt of health care, or medical condition of an
applicant in the case of an application for a policy or certificate
that is submitted prior to or during the six-month period beginning
with the first day of the first month in which an individual is both
65 years of age or older and is enrolled for benefits under Medicare
Part B. Each Medicare supplement policy and certificate currently
available from an issuer shall be made available to all applicants
who qualify under this subdivision and who are 65 years of age or
older.
(2) An issuer shall make available Medicare supplement benefit
plans A, B, C, and F, if currently available, to an applicant who
qualifies under this subdivision who is 64 years of age or younger
and who does not have end-stage renal disease. An issuer shall also
make available to those applicants, Medicare supplement benefit plan
H, I, or J, if currently available, and commencing January 1, 2007,
shall make available to them Medicare supplement benefit plan K or L,
if currently available. The selection among Medicare supplement plan
H, I, or J and the selection between Medicare supplement benefit
plan K or L shall be made at the issuer's discretion.
(3) This section and Section 10192.12 do not prohibit an issuer in
determining premium rates from treating applicants who are under 65
years of age and are eligible for Medicare Part B as a separate risk
classification. This section shall not be construed as preventing the
exclusion of benefits for preexisting conditions as defined in
paragraph (1) of subdivision (a) of Section 10192.8.
(b) (1) If an applicant qualifies under subdivision (a) and
submits an application during the time period referenced in
subdivision (a) and, as of the date of application, has had a
continuous period of creditable coverage of at least six months, the
issuer shall not exclude benefits based on a preexisting condition.
(2) If the applicant qualifies under subdivision (a) and submits
an application during the time period referenced in subdivision (a)
and, as of the date of application, has had a continuous period of
creditable coverage that is less than six months, the issuer shall
reduce the period of any preexisting condition exclusion by the
aggregate of the period of creditable coverage applicable to the
applicant as of the enrollment date. The manner of the reduction
under this subdivision shall be as specified by the commissioner.
(c) Except as provided in subdivision (b) and Section 10192.23,
subdivision (a) shall not be construed as preventing the exclusion of
benefits under a policy, during the first six months, based on a
preexisting condition for which the policyholder or certificate
holder received treatment or was otherwise diagnosed during the six
months before the coverage became effective.
(d) An individual enrolled in Medicare by reason of disability
shall be entitled to open enrollment described in this section for
six months after the date of his or her enrollment in Medicare Part
B, or if notified retroactively of his or her eligibility for
Medicare, for six months following notice of eligibility. Every
issuer shall make available to every applicant qualified for open
enrollment all policies and certificates offered by that issuer at
the time of application. Issuers shall not discourage sales during
the open enrollment period by any means, including the altering of
the commission structure.
(e) (1) An individual enrolled in Medicare Part B is entitled to
open enrollment described in this section for six months following:
(A) Receipt of a notice of termination or, if no notice is
received, the effective date of termination from any
employer-sponsored health plan including an employer-sponsored
retiree health plan.
(B) Receipt of a notice of loss of eligibility due to the divorce
or death of a spouse or, if no notice is received, the effective date
of loss of eligibility due to the divorce or death of a spouse, from
any employer-sponsored health plan including an employer-sponsored
retiree health plan.
(C) Termination of health care services for a military retiree or
the retiree's Medicare eligible spouse or dependent as a result of a
military base closure or loss of access to health care services
because the base no longer offers services or because the individual
relocates.
(2) For purposes of this subdivision, "employer-sponsored retiree
health plan" includes any coverage for medical expenses that is
directly or indirectly sponsored or established by an employer for
employees or retirees, their spouses, dependents, or other included
insureds.
(f) An individual enrolled in Medicare Part B is entitled to open
enrollment described in this section if the individual was covered
under a policy, certificate, or contract providing Medicare
supplement coverage but that coverage terminated because the
individual established residence at a location not served by the
plan.
(g) An individual whose coverage was terminated by a Medicare
Advantage plan shall be entitled to an additional 60-day open
enrollment period to be added on to and run consecutively after any
open enrollment period authorized by federal law or regulation, for
any Medicare supplement coverage provided by Medicare supplement
issuers and available on a guaranteed basis under state and federal
law or regulation for persons terminated by their Medicare Advantage
plan.
(h) An individual shall be entitled to an annual open enrollment
period lasting 30 days or more, commencing with the individual's
birthday, during which time that person may purchase any Medicare
supplement policy that offers benefits equal to or lesser than those
provided by the previous coverage. During this open enrollment
period, no issuer that falls under this provision shall deny or
condition the issuance or effectiveness of Medicare supplement
coverage, nor discriminate in the pricing of coverage, because of
health status, claims experience, receipt of health care, or medical
condition of the individual if, at the time of the open enrollment
period, the individual is covered under another Medicare supplement
policy or contract. An issuer shall notify a policyholder of his or
her rights under this subdivision at least 30 and no more than 60
days before the beginning of the open enrollment period.
(i) Commencing January 1, 2007, an individual enrolled in
Medicare Part B is entitled to open enrollment described in this
section upon being notified that he or she is no longer eligible for
benefits under the Medi-Cal program because of an increase in the
individual's income or assets.
10192.12. (a) (1) With respect to the guaranteed issue of a
Medicare supplement policy, eligible persons are those individuals
described in subdivision (b) who seek to enroll under the policy
during the period specified in subdivision (c), and who submit
evidence of the date of termination or disenrollment or enrollment in
Medicare Part D with the application for a Medicare supplement
policy.
(2) With respect to eligible persons, an issuer shall not take any
of the following actions:
(A) Deny or condition the issuance or effectiveness of a Medicare
supplement policy described in subdivision (e) that is offered and is
available for issuance to new enrollees by the issuer.
(B) Discriminate in the pricing of that Medicare supplement policy
because of health status, claims experience, receipt of health care,
or medical condition.
(C) Impose an exclusion of benefits based on a preexisting
condition under that Medicare supplement policy.
(b) An eligible person is an individual described in any of the
following paragraphs:
(1) The individual is enrolled under an employee welfare benefit
plan that provides health benefits that supplement the benefits under
Medicare, and the plan either terminates or ceases to provide all of
those supplemental health benefits to the individual.
(2) The individual is enrolled with a Medicare Advantage
organization under a Medicare Advantage plan under Medicare Part C,
and any of the following circumstances apply:
(A) The certification of the organization or plan has been
terminated.
(B) The organization has terminated or otherwise discontinued
providing the plan in the area in which the individual resides.
(C) The individual is no longer eligible to elect the plan because
of a change in the individual's place of residence or other change
in circumstances specified by the secretary. Those changes in
circumstances shall not include termination of the individual's
enrollment on the basis described in Section 1851(g)(3)(B) of the
federal Social Security Act where the individual has not paid
premiums on a timely basis or has engaged in disruptive behavior as
specified in standards under Section 1856, or the plan is terminated
for all individuals within a residence area.
(D) The Medicare Advantage plan in which the individual is
enrolled reduces any of its benefits or increases the amount of cost
sharing or discontinues for other than good cause relating to quality
of care, its relationship or contract under the plan with a provider
who is currently furnishing services to the individual. An
individual shall be eligible under this subparagraph for a Medicare
supplement policy issued by the same issuer through which the
individual was enrolled at the time the reduction, increase, or
discontinuance described above occurs or, commencing January 1, 2007,
for one issued by a subsidiary of the parent company of that issuer
or by a network that contracts with the parent company of that
issuer.
(E) The individual demonstrates, in accordance with guidelines
established by the secretary, either of the following:
(i) The organization offering the plan substantially violated a
material provision of the organization's contract under this article
in relation to the individual, including the failure to provide on a
timely basis medically necessary care for which benefits are
available under the plan or the failure to provide the covered care
in accordance with applicable quality standards.
(ii) The organization, or agent or other entity acting on the
organization's behalf, materially misrepresented the plan's
provisions in marketing the plan to the individual.
(F) The individual meets other exceptional conditions as the
secretary may provide.
(3) The individual is 65 years of age or older, is enrolled with a
Program of All-Inclusive Care for the Elderly (PACE) provider under
Section 1894 of the Social Security Act, and circumstances similar to
those described in paragraph (2) exist that would permit
discontinuance of the individual's enrollment with the provider, if
the individual were enrolled in a Medicare Advantage plan.
(4) The individual meets both of the following conditions:
(A) The individual is enrolled with any of the following:
(i) An eligible organization under a contract under Section 1876
of the Social Security Act (Medicare cost).
(ii) A similar organization operating under demonstration project
authority, effective for periods before April 1, 1999.
(iii) An organization under an agreement under Section 1833(a)(1)
(A) of the Social Security Act (health care prepayment plan).
(iv) An organization under a Medicare Select policy.
(B) The enrollment ceases under the same circumstances that would
permit discontinuance of an individual's election of coverage under
paragraph (2) or (3).
(5) The individual is enrolled under a Medicare supplement policy,
and the enrollment ceases because of any of the following
circumstances:
(A) The insolvency of the issuer or bankruptcy of the nonissuer
organization, or other involuntary termination of coverage or
enrollment under the policy.
(B) The issuer of the policy substantially violated a material
provision of the policy.
(C) The issuer, or an agent or other entity acting on the issuer's
behalf, materially misrepresented the policy's provisions in
marketing the policy to the individual.
(6) The individual meets both of the following conditions:
(A) The individual was enrolled under a Medicare supplement policy
and terminates enrollment and subsequently enrolls, for the first
time, with any Medicare Advantage organization under a Medicare
Advantage plan under Medicare Part C, any eligible organization under
a contract under Section 1876 of the Social Security Act (Medicare
cost), any similar organization operating under demonstration project
authority, any PACE provider under Section 1894 of the Social
Security Act, or a Medicare Select policy.
(B) The subsequent enrollment under subparagraph (A) is terminated
by the individual during any period within the first 12 months of
the subsequent enrollment (during which the enrollee is permitted to
terminate the subsequent enrollment under Section 1851(e) of the
federal Social Security Act).
(7) The individual upon first becoming eligible for benefits under
Medicare Part A at age 65 years of age, enrolls in a Medicare
Advantage plan under Medicare Part C or with a PACE provider under
Section 1894 of the Social Security Act, and disenrolls from the plan
or program not later than 12 months after the effective date of
enrollment.
(8) The individual while enrolled under a Medicare supplement
policy that covers outpatient prescription drugs enrolls in a
Medicare Part D plan during the initial enrollment period, terminates
enrollment in the Medicare supplement policy, and submits evidence
of enrollment in Medicare Part D along with the application for a
policy described in paragraph (4) of subdivision (e).
(c) (1) In the case of an individual described in paragraph (1) of
subdivision (b), the guaranteed issue period begins on the later of
the following two dates and ends on the date that is 63 days after
the date the applicable coverage terminates:
(A) The date the individual receives a notice of termination or
cessation of all supplemental health benefits or, if no notice is
received, the date of the notice denying a claim because of a
termination or cessation of benefits.
(B) The date that the applicable coverage terminates or ceases.
(2) In the case of an individual described in paragraphs (2), (3),
(4), (6), and (7) of subdivision (b) whose enrollment is terminated
involuntarily, the guaranteed issue period begins on the date that
the individual receives a notice of termination and ends 63 days
after the date the applicable coverage is terminated.
(3) In the case of an individual described in subparagraph (A) of
paragraph (5) of subdivision (b), the guaranteed issue period begins
on the earlier of the following two dates and ends on the date that
is 63 days after the date the coverage is terminated:
(A) The date that the individual receives a notice of termination,
a notice of the issuer's bankruptcy or insolvency, or other similar
notice if any.
(B) The date that the applicable coverage is terminated.
(4) In the case of an individual described in paragraph (2), (3),
(6), or (7) of, or in subparagraph (B) or (C) of paragraph (5) of,
subdivision (b) who disenrolls voluntarily, the guaranteed issue
period begins on the date that is 60 days before the effective date
of the disenrollment and ends on the date that is 63 days after the
effective date of the disenrollment.
(5) In the case of an individual described in paragraph (8) of
subdivision (b), the guaranteed issue period begins on the date the
individual receives notice pursuant to Section 1882(v)(2)(B) of the
Social Security Act from the Medicare supplement issuer during the
60-day period immediately preceding the initial enrollment period for
Medicare Part D and ends on the date that is 63 days after the
effective date of the individual's coverage under Medicare Part D.
(6) In the case of an individual described in subdivision (b) who
is not included in this subdivision, the guaranteed issue period
begins on the effective date of disenrollment and ends on the date
that is 63 days after the effective date of disenrollment.
(d) (1) In the case of an individual described in paragraph (6) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b) is
involuntarily terminated within the first 12 months of enrollment and
who, without an intervening enrollment, enrolls with another such
organization or provider, the subsequent enrollment shall be deemed
to be an initial enrollment described in paragraph (6) of subdivision
(b).
(2) In the case of an individual described in paragraph (7) of
subdivision (b), or deemed to be so described pursuant to this
paragraph, whose enrollment with a plan or in a program described in
paragraph (7) of subdivision (b) is involuntarily terminated within
the first 12 months of enrollment and who, without an intervening
enrollment, enrolls in another such plan or program, the subsequent
enrollment shall be deemed to be an initial enrollment described in
paragraph (7) of subdivision (b).
(3) For purposes of paragraphs (6) and (7) of subdivision (b), an
enrollment of an individual with an organization or provider
described in subparagraph (A) of paragraph (6) of subdivision (b), or
with a plan or in a program described in paragraph (7) of
subdivision (b) shall not be deemed to be an initial enrollment under
this paragraph after the two-year period beginning on the date on
which the individual first enrolled with such an organization,
provider, plan, or program.
(e) (1) Under paragraphs (1), (2), (3), (4), and (5) of
subdivision (b), an eligible individual is entitled to a Medicare
supplement policy that has a benefit package classified as Plan A, B,
C, F (including a high deductible Plan F), K, or L offered by any
issuer.
(2) (A) Under paragraph (6) of subdivision (b), an eligible
individual is entitled to the same Medicare supplement policy in
which he or she was most recently enrolled, if available from the
same issuer. If that policy is not available, the eligible individual
is entitled to a Medicare supplement policy that has a benefit
package classified as Plan A, B, C, F (including a high deductible
Plan F), K, or L offered by any issuer.
(B) On and after January 1, 2006, an eligible individual described
in this paragraph who was most recently enrolled in a Medicare
supplement policy with an outpatient prescription drug benefit, is
entitled to a Medicare supplement policy that is available from the
same issuer but without an outpatient prescription drug benefit or,
at the election of the individual, has a benefit package classified
as a Plan A, B, C, F (including high deductible Plan F), K, or L that
is offered by any issuer.
(3) Under paragraph (7) of subdivision (b), an eligible individual
is entitled to any Medicare supplement policy offered by any issuer.
(4) Under paragraph (8) of subdivision (b), an eligible individual
is entitled to a Medicare supplement policy that has a benefit
package classified as Plan A, B, C, F (including a high deductible
Plan F), K, or L and that is offered and is available for issuance to
a new enrollee by the same issuer that issued the individual's
Medicare supplement policy with outpatient prescription drug
coverage.
(f) (1) At the time of an event described in subdivision (b) by
which an individual loses coverage or benefits due to the termination
of a contract or agreement, policy, or plan, the organization that
terminates the contract or agreement, the issuer terminating the
policy, or the administrator of the plan being terminated,
respectively, shall notify the individual of his or her rights under
this section and of the obligations of issuers of Medicare supplement
policies under subdivision (a). The notice shall be communicated
contemporaneously with the notification of termination.
(2) At the time of an event described in subdivision (b) by which
an individual ceases enrollment under a contract or agreement,
policy, or plan, the organization that offers the contract or
agreement, regardless of the basis for the cessation of enrollment,
the issuer offering the policy, or the administrator of the plan,
respectively, shall notify the individual of his or her rights under
this section, and of the obligations of issuers of Medicare
supplement policies under subdivision (a). The notice shall be
communicated within 10 working days of the date the issuer received
notification of disenrollment.
(g) An issuer shall refund any unearned premium that an insured
paid in advance and shall terminate coverage upon the request of an
insured.
10192.13. (a) An issuer shall comply with Section 1882(c)(3) of the
federal Social Security Act (as enacted by Section 4081(b)(2)(C) of
the federal Omnibus Budget Reconciliation Act of 1987 (OBRA), Public
Law 100-203) by doing all of the following and by certifying
compliance on the Medicare supplement insurance experience reporting
form:
(1) Accepting a notice from a Medicare carrier on dually assigned
claims submitted by participating physicians and suppliers as a claim
for benefits in place of any other claim form otherwise required and
making a payment determination on the basis of the information
contained in that notice.
(2) Notifying the participating physician or supplier and the
beneficiary of the payment determination.
(3) Paying the participating physician or supplier directly.
(4) Furnishing, at the time of enrollment, each enrollee with a
card listing the policy name, number, and a central mailing address
to which notices from a Medicare carrier may be sent.
(5) Paying user fees for claim notices that are transmitted
electronically or otherwise.
(6) Providing to the secretary, at least annually, a central
mailing address to which all claims may be sent by Medicare carriers.
(7) File, by June 30 of each year, with the commissioner a list of
its Medicare supplement policies and certificates offered or issued
or in force in California as of the end of the previous year.
(A) The list shall identify the issuer by name and address, shall
identify each type of form it offers by name and form number, and
shall differentiate between forms approved in the previous calendar
year and those approved before the previous calendar year.
(B) The list shall identify all of the following:
(i) Forms issued and in force but no longer offered in California.
(ii) Forms that, for any reason, were not filed and approved by
the commissioner.
(iii) Forms for which the commissioner's approval was withdrawn
within the previous calendar year.
(iv) The number of forms issued in California in the previous
calendar year, and the number of forms in force in California on
December 31 of the previous calendar year.
(b) (1) Compliance with the requirements set forth in subdivision
(a) shall be certified on the Medicare supplement insurance
experience reporting form provided by the commissioner.
(2) The commissioner shall, by September 1 of each year, provide
the secretary with a list identifying each issuer by name and address
and provide the information requested in this section.
(c) No issuer that administers Medicare coverage and federal
employee programs may require that more than one form be submitted
per claim in order to receive payment or reimbursement under any or
all of those policies or programs.
10192.14. (a) (1) (A) With respect to loss ratio standards, a
Medicare supplement policy form or certificate form shall not be
advertised, solicited, or issued for delivery unless the policy form
or certificate form can be expected, as estimated for the entire
period for which rates are computed to provide coverage, to return to
policyholders and certificate holders in the form of aggregate
benefits, not including anticipated refunds or credits, provided
under the policy form or certificate form at least 75 percent of the
aggregate amount of premiums earned in the case of group policies, or
at least 65 percent of the aggregate amount of premiums earned in
the case of individual policies.
(B) Loss ratio standards shall be calculated on the basis of
incurred claims experience, and earned premiums shall be calculated
for the period and in accordance with accepted actuarial principles
and practices.
(2) All filings of rates and rating schedules shall demonstrate
that expected claims in relation to premiums comply with the
requirements of this section when combined with actual experience to
date. Filings of rate revisions shall also demonstrate that the
anticipated loss ratio over the entire future period for which the
revised rates are computed to provide coverage can be expected to
meet the appropriate loss ratio standards.
(3) For purposes of applying paragraph (1) of subdivision (a) and
paragraph (3) of subdivision (d) of Section 10192.15 only, policies
issued as a result of solicitations of individuals through the mail
or by mass media advertising, including both print and broadcast
advertising, shall be deemed to be individual policies.
(b) (1) With respect to refund or credit calculations, an issuer
shall collect and file with the commissioner by May 31 of each year
the data contained in the applicable reporting form required by the
commissioner for each type of coverage in a standard Medicare
supplement benefit plan.
(2) If on the basis of the experience as reported the benchmark
ratio since inception (ratio 1) exceeds the adjusted experience ratio
since inception (ratio 3), then a refund or credit calculation is
required. The refund calculation shall be done on a statewide basis
for each type in a standard Medicare supplement benefit plan. For
purposes of the refund or credit calculation, experience on policies
issued within the reporting year shall be excluded.
(3) For the purposes of this section, with respect to policies or
certificates advertised, solicited, or issued for delivery prior to
January 1, 2001, the issuer shall make the refund or credit
calculation separately for all individual policies, including all
group policies subject to an individual loss ratio standard when
issued, combined and all other group policies combined for experience
after January 1, 2001. The first report pursuant to paragraph (1)
shall be due by May 31, 2003.
(4) A refund or credit shall be made only when the benchmark loss
ratio exceeds the adjusted experience loss ratio and the amount to be
refunded or credited exceeds a de minimis level. The refund shall
include interest from the end of the calendar year to the date of the
refund or credit at a rate specified by the secretary, but in no
event shall it be less than the average rate of interest for 13-week
Treasury notes. A refund or credit against premiums due shall be made
by September 30 following the experience year upon which the refund
or credit is based.
(c) An issuer of Medicare supplement policies and certificates
shall file annually its rates, rating schedule, and supporting
documentation including ratios of incurred losses to earned premiums
by policy duration for approval by the commissioner in accordance
with the filing requirements and procedures prescribed by the
commissioner and this code. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice using
reasonable assumptions that the appropriate loss ratio standards can
be expected to be met over the entire period for which rates are
computed. The demonstration shall exclude active life reserves. An
expected third-year loss ratio that is greater than or equal to the
applicable percentage shall be demonstrated for policies or
certificates in force less than three years.
As soon as practicable, but prior to the effective date of
enhancements in Medicare benefits, every issuer of Medicare
supplement policies or certificates shall file with the commissioner,
in accordance with applicable filing procedures, all of the
following:
(1) (A) Appropriate premium adjustments necessary to produce loss
ratios as anticipated for the current premium for the applicable
policies or certificates. The supporting documents necessary to
justify the adjustment shall accompany the filing.
(B) An issuer shall make premium adjustments necessary to produce
an expected loss ratio under the policy or certificate to conform to
minimum loss ratio standards for Medicare supplement policies and
that are expected to result in a loss ratio at least as great as that
originally anticipated in the rates used to produce current premiums
by the issuer for the Medicare supplement policies or certificates.
No premium adjustment that would modify the loss ratio experience
under the policy other than the adjustments described in this section
shall be made with respect to a policy at any time other than upon
its renewal date or anniversary date.
(C) If an issuer fails to make premium adjustments acceptable to
the commissioner, the commissioner may order premium adjustments,
refunds, or premium credits deemed necessary to achieve the loss
ratio required by this section.
(2) Any appropriate riders, endorsements, or policy forms needed
to accomplish the Medicare supplement policy or certificate
modifications necessary to eliminate benefit duplications with
Medicare. The riders, endorsements, or policy forms shall provide a
clear description of the Medicare supplement benefits provided by the
policy or certificate.
(d) The commissioner may conduct a public hearing to gather
information concerning a request by an issuer for an increase in a
rate for a policy form or certificate form issued before or after the
effective date of January 1, 2001, if the experience of the form for
the previous reporting period is not in compliance with the
applicable loss ratio standard. The determination of compliance is
made without consideration of any refund or credit for the reporting
period. Public notice of the hearing shall be furnished in a manner
deemed appropriate by the commissioner.
10192.15. (a) An issuer shall not advertise, solicit, or issue for
delivery a policy or certificate to a resident of this state unless
the policy form or certificate form has been filed with and approved
by the commissioner in accordance with filing requirements and
procedures prescribed by the commissioner. Master policies issued
outside California shall be filed for informational purposes along
with the certificates. Until January 1, 2001, or 90 days after
approval of Medicare supplement policies or certificates submitted
for approval pursuant to this section, whichever is later, issuers
may continue to offer and market previously approved Medicare
supplement policies or certificates.
(b) An issuer shall file any riders or amendments to policy or
certificate forms to delete outpatient prescription drug benefits, as
required by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (P.L. 108-173), only with the commissioner
in the state where the policy or certificate was issued.
(c) (1) An issuer shall not use or change premium rates for a
Medicare supplement policy or certificate unless the rates, rating
schedule, and supporting documentation have been filed with and
approved by the commissioner in accordance with the filing
requirements and procedures prescribed by the commissioner.
(2) Paragraph (1) of subdivision (b) of Section 10290 shall not
apply to Medicare supplement insurance forms or rates. However, the
commissioner may authorize in writing, for good cause only, the
limited use of a form or rates after that form or the rates have been
filed with the commissioner for 60 days and have not otherwise been
acted upon.
(d) (1) Except as provided in paragraph (2), an issuer shall not
file for approval more than one form of a policy or certificate of
each type for each standard Medicare supplement benefit plan.
(2) An issuer may offer, with the approval of the commissioner, up
to four additional policy forms or certificate forms of the same
type for the same standard Medicare supplement benefit plan, one for
each of the following cases:
(A) The inclusion of new or innovative benefits.
(B) The addition of either direct response or agent marketing
methods.
(C) The addition of either guaranteed issue or underwritten
coverage.
(D) The offering of coverage to individuals eligible for Medicare
by reason of disability.
(3) For the purposes of this section, a "type" means an individual
policy, a group policy, an individual Medicare Select policy, or a
group Medicare Select policy.
(e) (1) Except as provided in subdivision (a), an issuer shall
continue to make available for purchase any policy form or
certificate form issued after January 1, 2001, that has been approved
by the commissioner. A policy form or certificate form shall not be
considered to be available for purchase unless the issuer has
actively offered it for sale in the previous 12 months.
(A) An issuer may discontinue the availability of a policy form or
certificate form if the issuer provides to the commissioner in
writing its decision at least 60 days prior to discontinuing the
availability of the form of the policy or certificate. After receipt
of the notice by the commissioner, the issuer shall no longer offer
for sale the policy form or certificate form in this state.
(B) An issuer that discontinues the availability of a policy form
or certificate form pursuant to subparagraph (A) shall not file for
approval a new policy form or certificate form of the same type for
the same standard Medicare supplement benefit plan as the
discontinued form for a period of five years after the issuer
provides notice to the commissioner of the discontinuance. The period
of discontinuance may be reduced if the commissioner determines that
a shorter period is appropriate.
(2) The sale or other transfer of Medicare supplement business to
another issuer shall be considered a discontinuance for the purposes
of this subdivision.
(3) A change in the rating structure or methodology shall be
considered a discontinuance under paragraph (1) unless the issuer
complies with the following requirements:
(A) The issuer provides an actuarial memorandum, in a form and
manner prescribed by the commissioner, describing the manner in which
the revised rating methodology and resultant rates differ from the
existing rating methodology and existing rates. The commissioner may
approve the change if it is in the public interest.
(B) The issuer does not subsequently put into effect a change of
rates or rating factors that would cause the percentage differential
between the discontinued and subsequent rates as described in the
actuarial memorandum to change. The commissioner may approve a change
to the differential that is in the public interest. The commissioner
may approve a change to the differential if it is in the public
interest.
(f) (1) Except as provided in paragraph (2), the experience of all
policy forms or certificate forms of the same type in a standard
Medicare supplement benefit plan shall be combined for purposes of
the refund or credit calculation prescribed in Section 10192.14.
(2) Forms assumed under an assumption reinsurance agreement shall
not be combined with the experience of other forms for purposes of
the refund or credit calculation.
10192.16. (a) An issuer or other entity may provide commission or
other compensation to an agent or other representative for the sale
of a Medicare supplement policy or certificate only if the first year
commission or other first year compensation is no more than 200
percent of the commission or other compensation paid for selling or
servicing the policy or certificate in the second year or period.
Every insurer shall file with the commissioner its commission
structure or an explanation of the insurer's plan to comply with this
provision.
(b) The commission or other compensation provided in subsequent
renewal years must be the same as that provided in the second year or
period and must be provided for no fewer than five renewal years.
(c) No issuer or other entity shall provide compensation to its
agents or other producers, and no agent or producer shall receive
compensation, greater than the renewal compensation payable by the
replacing issuer on renewal policies or certificates if an existing
policy or certificate is replaced.
(d) For purposes of this section, "commission" or "compensation"
includes pecuniary or nonpecuniary remuneration of any kind relating
to the sale or renewal of the policy or certificate, including, but
not limited to, bonuses, gifts, prizes, awards, and finders' fees.
10192.165. (a) (1) As prescribed in this chapter, the commissioner
shall have the administrative authority to assess penalties against
issuers, brokers, agents, and other entities engaged in the business
of insurance or any other person or entity for violations of this
article.
(2) Upon a showing of a violation of this article in any civil
action, a court may also assess the penalties prescribed in this
chapter.
(3) Whenever the commissioner has reasonable cause to believe or
determines after a public hearing that any issuer, agent, broker, or
other person or entity engaged in the business of insurance, has
violated this article he or she shall make and serve upon the issuer,
broker, or other person or entity a notice of hearing. The notice
shall state the commissioner's intent to assess the administrative
penalties, the time and place of the hearing, and the conduct,
condition, or ground upon which the commissioner is holding the
hearing and assessing the penalties. The hearing shall occur within
30 days after the notice is served. Within 30 days after the hearing
the commissioner shall issue an order specifying the amount of
penalties to be paid. The penalties resulting from the hearing shall
be paid to the Insurance Fund.
(4) The powers vested in the commissioner by this section shall be
additional to any and all powers and remedies vested in the
commissioner by law.
(b) (1) Any broker, agent, or other person or entity engaged in
the business of insurance, other than an issuer, who violates this
article is liable for administrative penalties of no less than two
hundred fifty dollars (0) for the first violation.
(2) Any broker, agent, other person, or other entity engaged in
the business of insurance, other than an issuer, who engages in
practices prohibited by this chapter a second or subsequent time or
who commits a knowing violation of this article, is liable for
administrative penalties of no less than one thousand dollars
(,000) and no more than twenty-five thousand dollars (,000) for
each violation.
(3) Any issuer who violates this article is liable for
administrative penalties of no less than two thousand five hundred
dollars (,500) for the first violation.
(4) Any issuer who violates this article with a frequency as to
indicate a general business practice or commits a knowing violation
of this article, is liable for administrative penalties of no less
than ten thousand dollars (,000) and no more than one hundred
thousand dollars (0,000) for each violation.
(c) (1) Actions for injunctive relief, penalties in the amounts
specified in subdivision (a), damages, restitution, and all other
remedies provided for in law, may be brought in superior court by the
Attorney General, district attorney, or city attorney on behalf of
the people of the State of California.
(2) The court shall award reasonable attorney's fees and costs to
a prevailing plaintiff who establishes a violation of this article.
(d) In addition to any other applicable penalties, the
commissioner may require issuers, agents, brokers, or other persons
or entities violating any provision of this article or regulations
promulgated pursuant to this article, to cease marketing in this
state any Medicare supplement policy or certificate or may require
the issuer, agent, broker, or other person or entity to take such
actions as are necessary to comply with the provisions of this
article, or both.
(e) Any person who knowingly or intentionally violates any
provision of this article is guilty of a public offense punishable by
imprisonment in a county jail not exceeding one year or by
imprisonment in the state prison or by a fine not exceeding ten
thousand dollars (,000), or by both that imprisonment and fine.
(f) (1) The requirements and remedies provided by this article are
in addition to any other remedies provided by law.
(2) If any provision of this article or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect other provisions or applications of the article which can
be given effect without the invalid provision or application, and to
this end the provisions of this article are severable.
10192.17. (a) Medicare supplement policies and certificates shall
include a renewal, continuation, or conversion provision. The
language or specifications of the provision shall be consistent with
the type of contract issued. The provision shall be appropriately
captioned and shall appear on the first page of the policy, and shall
include any reservation by the issuer of the right to change
premiums and any automatic renewal premium increases based on the
policyholder's age.
(b) Except for riders or endorsements by which the issuer
effectuates a request made in writing by the insured, exercises a
specifically reserved right under a Medicare supplement policy, or is
required to reduce or eliminate benefits to avoid duplication of
Medicare benefits, all riders or endorsements added to a Medicare
supplement policy after the date of issue or upon reinstatement or
renewal that reduce or eliminate benefits or coverage in the policy
shall require a signed acceptance by the insured. After the date of
policy or certificate issue, any rider or endorsement that increases
benefits or coverage with a concomitant increase in premium during
the policy term shall be agreed to in writing signed by the insured,
unless the benefits are required by the minimum standards for
Medicare supplement policies, or if the increased benefits or
coverage is required by law. If a separate additional premium is
charged for benefits provided in connection with riders or
endorsements, the premium charge shall be set forth in the policy.
(c) Medicare supplement policies or certificates shall not provide
for the payment of benefits based on standards described as "usual
and customary," "reasonable and customary," or words of similar
import.
(d) If a Medicare supplement policy or certificate contains any
limitations with respect to preexisting conditions, those limitations
shall appear as a separate paragraph of the policy and be labeled as
"Preexisting Condition Limitations."
(e) (1) Medicare supplement policies and certificates shall have a
notice prominently printed on the first page of the policy or
certificate, and of the outline of coverage, or attached thereto, in
no less than 10-point uppercase type, stating in substance that the
policyholder or certificate holder shall have the right to return the
policy or certificate, via regular mail, within 30 days of receiving
it, and to have the full premium refunded if, after examination of
the policy or certificate, the insured person is not satisfied for
any reason. The return shall void the contract from the beginning,
and the parties shall be in the same position as if no contract had
been issued.
(2) For purposes of this section, a timely manner shall be no
later than 30 days after the issuer receives the returned contract.
(3) If the issuer fails to refund all prepaid or periodic charges
paid in a timely manner, then the applicant shall receive interest on
the paid charges at the legal rate of interest on judgments as
provided in Section 685.010 of the Code of Civil Procedure. The
interest shall be paid from the date the issuer received the returned
contract.
(f) (1) Issuers of health insurance policies, certificates, or
contracts that provide hospital or medical expense coverage on an
expense incurred or indemnity basis, other than incidentally, to
persons eligible for Medicare shall provide to those applicants a
Guide to Health Insurance for People with Medicare in the form
developed jointly by the National Association of Insurance
Commissioners and the Centers for Medicare and Medicaid Services and
in a type size no smaller than 12-point type. Delivery of the guide
shall be made whether or not the policies or certificates are
advertised, solicited, or issued for delivery as Medicare supplement
policies or certificates as defined in this article. Except in the
case of direct response issuers, delivery of the guide shall be made
to the applicant at the time of application, and acknowledgment of
receipt of the guide shall be obtained by the issuer. Direct response
issuers shall deliver the guide to the applicant upon request, but
not later than at the time the policy is delivered.
(2) For the purposes of this section, "form" means the language,
format, type size, type proportional spacing, bold character, and
line spacing.
(g) As soon as practicable, but no later than 30 days prior to the
annual effective date of any Medicare benefit changes, an issuer
shall notify its policyholders and certificate holders of
modifications it has made to Medicare supplement policies or
certificates in a format acceptable to the commissioner. The notice
shall include both of the following:
(1) A description of revisions to the Medicare Program and a
description of each modification made to the coverage provided under
the Medicare supplement policy or certificate.
(2) Inform each policyholder or certificate holder as to when any
premium adjustment is to be made due to changes in Medicare.
(h) The notice of benefit modifications and any premium
adjustments shall be in outline form and in clear and simple terms so
as to facilitate comprehension.
(i) The notices shall not contain or be accompanied by any
solicitation.
(j) (1) Issuers shall provide an outline of coverage to all
applicants at the time application is presented to the prospective
applicant and, except for direct response policies, shall obtain an
acknowledgment of receipt of the outline from the applicant. If an
outline of coverage is provided at the time of application and the
Medicare supplement policy or certificate is issued on a basis which
would require revision of the outline, a substitute outline of
coverage properly describing the policy or certificate shall
accompany the policy or certificate when it is delivered and contain
the following statement, in no less than 12-point type, immediately
above the company name:
"NOTICE: Read this outline of coverage carefully. It is not
identical to the outline of coverage provided upon application and
the coverage originally applied for has not been issued."
(2) The outline of coverage provided to applicants pursuant to
this section consists of four parts: a cover page, premium
information, disclosure pages, and charts displaying the features of
each benefit plan offered by the issuer. The outline of coverage
shall be in the language and format prescribed below in no less than
12-point type. All plans A-L shall be shown on the cover page, and
the plans that are offered by the issuer shall be prominently
identified. Premium information for plans that are offered shall be
shown on the cover page or immediately following the cover page and
shall be prominently displayed. The premium and mode shall be stated
for all plans that are offered to the prospective applicant. All
possible premiums for the prospective applicant shall be illustrated.
(3) The commissioner may adopt regulations to implement this
article, including, but not limited to, regulations that specify the
required information to be contained in the outline of coverage
provided to applicants pursuant to this section, including the format
of tables, charts, and other information.
(k) (1) Any disability insurance policy or certificate, a basic,
catastrophic or major medical expense policy, or single premium
nonrenewal policy or certificate issued to persons eligible for
Medicare, other than a Medicare supplement policy, a policy issued
pursuant to a contract under Section 1876 of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.), a disability income
policy, or any other policy identified in subdivision (b) of Section
10192.3, advertised, solicited, or issued for delivery in this state
to persons eligible for Medicare, shall notify insureds under the
policy that the policy is not a Medicare supplement policy or
certificate. The notice shall either be printed or attached to the
first page of the outline of coverage delivered to insureds under the
policy, or if no outline of coverage is delivered, to the first page
of the policy or certificate delivered to insureds. The notice shall
be in no less than 12-point type and shall contain the following
language:
"THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT (POLICY
OR CONTRACT). If you are eligible for Medicare, review the Guide to
Health Insurance for People with Medicare available from the company."
(2) Applications provided to persons eligible for Medicare for the
disability insurance policies or certificates described in paragraph
(1) shall disclose the extent to which the policy duplicates
Medicare in a manner required by the commissioner. The disclosure
statement shall be provided as a part of, or together with, the
application for the policy or certificate.
(l) (1) Insurers issuing Medicare supplement policies or
certificates for delivery in California shall provide an outline of
coverage to all applicants at the time of presentation for
examination or sale as provided in Section 10605, and in no case
later than at the time the application is made. Except for direct
response policies, insurers shall obtain a written acknowledgment of
receipt of the outline from the applicant.
Any advertisement that is not a presentation for examination or
sale as defined in subdivision (e) of Section 10601 shall contain a
notice in no less than 10-point uppercase type that an outline of
coverage is available upon request. The insurer or agent that
receives any request for an outline of coverage shall provide an
outline of coverage to the person making the request within 14 days
of receipt of the request.
(2) If an outline of coverage is provided at or before the time of
application and the Medicare supplement policy or certificate is
issued on a basis that would require revision of the outline, a
substitute outline of coverage properly describing the policy or
certificate shall accompany the policy or certificate when it is
delivered and contain the following statement, in no less than
12-point type, immediately above the name:
"NOTICE: Read this outline of coverage carefully. It is not
identical to the outline of coverage provided upon application and
the coverage originally applied for has not been issued."
(3) The outline of coverage shall be in the language and format
prescribed in this subdivision in no less than 12-point type, and
shall include the following items in the order prescribed below.
Titles, as set forth below in paragraphs (B) to (H), inclusive, shall
be capitalized, centered, and printed in boldface type. The outline
of coverage shall include the items, and in the same order, specified
in the chart set forth in Section 17 of the Model Regulation to
implement the NAIC Medicare Supplement Insurance Minimum Standards
Model Act, as adopted by the National Association of Insurance
Commissioners in 2004.
(A) The cover page shall contain the 12-plan (A-L) charts. The
plans offered by the insurer shall be clearly identified. Innovative
benefits shall be explained in a manner approved by the commissioner.
The text shall read:
"Medicare supplement insurance can be sold in only 12 standard
plans. This chart shows the benefits included in each plan. Every
insurance company must offer Plan A. Some plans may not be available.
The BASIC BENEFITS included in ALL plans are:
Hospitalization: Medicare Part A coinsurance plus coverage for 365
additional days after Medicare benefits end.
Medical expenses: Medicare Part B coinsurance (usually 20 percent
of the Medicare-approved amount).
Blood: First three pints of blood each year.
Mammogram: One annual screening to the extent not covered by
Medicare.
Cervical cancer test: One annual screening."
(Reference to the mammogram and cervical cancer test shall not be
included so long as California is required to disallow them for
Medicare beneficiaries by the Centers for Medicare and Medicaid
Services or other agent of the federal government under 42 U.S.C.
Sec. 1395ss.)
(B) PREMIUM INFORMATION. Premium information for plans that are
offered by the insurer shall be shown on, or immediately following,
the cover page and shall be clearly and prominently displayed. The
premium and mode shall be stated for all offered plans. All possible
premiums for the prospective applicant shall be illustrated in
writing. If the premium is based on the increasing age of the
insured, information specifying when and how premiums will change
shall be clearly illustrated in writing. The text shall state: "We
(the insurer's name) can only raise your premium if we raise the
premium for all policies like yours in California."
(C) The text shall state: "Use this outline to compare benefits
and premiums among policies."
(D) READ YOUR POLICY VERY CAREFULLY. The text shall state: "This
is only an outline describing your policy's most important features.
The policy is your insurance contract. You must read the policy
itself to understand all of the rights and duties of both you and
your insurance company."
(E) THIRTY-DAY RIGHT TO RETURN THIS POLICY. The text shall state:
"If you find that you are not satisfied with your policy, you may
return it to (insert the insurer's address). If you send the policy
back to us within 30 days after you receive it, we will treat the
policy as if it has never been issued and return all of your
payments."
(F) POLICY REPLACEMENT. The text shall read: "If you are replacing
another health insurance policy, do NOT cancel it until you have
actually received your new policy and are sure you want to keep it."
(G) DISCLOSURES. The text shall read: "This policy may not fully
cover all of your medical costs." "Neither this company nor any of
its agents are connected with Medicare." "This outline of coverage
does not give all the details of Medicare coverage. Contact your
local social security office or consult 'The Medicare Handbook' for
more details." "For additional information concerning policy
benefits, contact the Health Insurance Counseling and Advocacy
Program (HICAP) or your agent. Call the HICAP toll-free telephone
number, 1-800-434-0222, for a referral to your local HICAP office.
HICAP is a service provided free of charge by the State of
California."
The disclosure required by this paragraph, as revised by
amendments made during the 1996 portion of the 1995-96 Regular
Session, shall be included in the required disclosure form no later
than January 1, 1998.
(H) (For policies that are not guaranteed issue) COMPLETE ANSWERS
ARE IMPORTANT. The text shall read: "When you fill out the
application for a new policy, be sure to answer truthfully and
completely all questions about your medical and health history. The
company may have the right to cancel your policy and refuse to pay
any claims if you leave out or falsify important medical information.
Review the application carefully before you sign it. Be certain
that all information has been properly recorded."
(I) One chart for each benefit plan offered by the insurer showing
the services, Medicare payments, payments under the policy and
payments expected from the insured, using the same uniform format and
language. No more than four plans may be shown on one page. Include
an explanation of any innovative benefits in a manner approved by the
commissioner.
(m) An issuer shall comply with all notice requirements of the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (P.L. 108-173).
10192.18. (a) Application forms shall include the following
questions designed to elicit information as to whether, as of the
date of the application, the applicant currently has Medicare
supplement, Medicare Advantage, Medi-Cal coverage, or another health
insurance policy or certificate in force or whether a Medicare
supplement policy or certificate is intended to replace any other
disability policy or certificate presently in force. A supplementary
application or other form to be signed by the applicant and agent
containing those questions and statements may be used.
"(Statements)
(1) You do not need more than one Medicare supplement policy.
(2) If you purchase this policy, you may want to evaluate your
existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medi-Cal and may not
need a Medicare supplement policy.
(4) If after purchasing this policy you become eligible for
Medi-Cal, the benefits and premiums under your Medicare supplement
policy can be suspended, if requested, during your entitlement to
benefits under Medi-Cal for 24 months. You must request this
suspension within 90 days of becoming eligible for Medi-Cal. If you
are no longer entitled to Medi-Cal, your suspended Medicare
supplement policy or if that is no longer available, a substantially
equivalent policy, will be reinstituted if requested within 90 days
of losing Medi-Cal eligibility. If the Medicare supplement policy
provided coverage for outpatient prescription drugs and you enrolled
in Medicare Part D while your policy was suspended, the reinstituted
policy will not have outpatient prescription drug coverage, but will
otherwise be substantially equivalent to your coverage before the
date of the suspension.
(5) If you are eligible for, and have enrolled in, a Medicare
supplement policy by reason of disability and you later become
covered by an employer or union-based group health plan, the benefits
and premiums under your Medicare supplement policy can be suspended,
if requested, while you are covered under the employer or
union-based group health plan. If you suspend your Medicare
supplement policy under these circumstances and later lose your
employer or union-based group health plan, your suspended Medicare
supplement policy or if that is no longer available, a substantially
equivalent policy, will be reinstituted if requested within 90 days
of losing your employer or union-based group health plan. If the
Medicare supplement policy provided coverage for outpatient
prescription drugs and you enrolled in Medicare Part D while your
policy was suspended, the reinstituted policy will not have
outpatient prescription drug coverage, but will otherwise be
substantially equivalent to your coverage before the date of the
suspension.
(6) Counseling services are available in this state to provide
advice concerning your purchase of Medicare supplement insurance and
concerning medical assistance through the Medi-Cal program, including
benefits as a qualified Medicare beneficiary (QMB) and a specified
low-income Medicare beneficiary (SLMB). If you want to discuss buying
Medicare supplement insurance with a trained insurance counselor,
call the California Department of Insurance's toll-free telephone
number 1-800-927-HELP, and ask how to contact your local Health
Insurance Counseling and Advocacy Program (HICAP) office. HICAP is a
service provided free of charge by the State of California.
(Questions)
If you lost or are losing other health insurance coverage and
received a notice from your prior insurer saying you were eligible
for guaranteed issue of a Medicare supplement insurance policy or
that you had certain rights to buy such a policy, you may be
guaranteed acceptance in one or more of our Medicare supplement
plans. Please include a copy of the notice from your prior insurer
with your application. PLEASE ANSWER ALL QUESTIONS.
Please mark Yes or No below with an "X."
To the best of your knowledge,
(1) (a) Did you turn 65 years of age in the last 6 months
Yes____ No____
(b) Did you enroll in Medicare Part B in the last 6 months
Yes____ No____
(c) If yes, what is the effective date ___________________
(2) Are you covered for medical assistance through California's
Medi-Cal program
NOTE TO APPLICANT: If you have a share of cost under the Medi-Cal
program, please answer NO to this question.
Yes____ No____
If yes,
(a) Will Medi-Cal pay your premiums for this Medicare supplement
policy
Yes____ No____
(b) Do you receive benefits from Medi-Cal OTHER THAN payments
toward your Medicare Part B premium
Yes____ No____
(3) (a) If you had coverage from any Medicare plan other than
original Medicare within the past 63 days (for example, a Medicare
Advantage plan or a Medicare HMO or PPO), fill in your start and end
dates below. If you are still covered under this plan, leave "END"
blank.
START __/__/__ END __/__/__
(b) If you are still covered under the Medicare plan, do you
intend to replace your current coverage with this new Medicare
supplement policy
Yes____ No____
(c) Was this your first time in this type of Medicare plan
Yes____ No____
(d) Did you drop a Medicare supplement policy to enroll in the
Medicare plan
Yes____ No____
(4) (a) Do you have another Medicare supplement policy in force
Yes____ No____
(b) If so, with what company, and what plan do you have (optional
for direct mailers)
Yes____ No____
(c) If so, do you intend to replace your current Medicare
supplement policy with this policy
Yes____ No____
(5) Have you had coverage under any other health insurance within
the past 63 days (For example, an employer, union, or individual
plan)
Yes____ No____
(a) If so, with what companies and what kind of policy
________________________________________________
________________________________________________
________________________________________________
________________________________________________
(b) What are your dates of coverage under the other policy
START __/__/__ END __/__/__
(If you are still covered under the other policy, leave "END"
blank.)
(b) Agents shall list any other health insurance policies they
have sold to the applicant as follows:
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no longer
in force.
(c) In the case of a direct response issuer, a copy of the
application or supplemental form, signed by the applicant, and
acknowledged by the issuer, shall be returned to the applicant by the
issuer upon delivery of the policy.
(d) Upon determining that a sale will involve replacement of
Medicare supplement coverage, any issuer, other than a direct
response issuer, or its agent, shall furnish the applicant, prior to
issuance for delivery of the Medicare supplement policy or
certificate, a notice regarding replacement of Medicare supplement
coverage. One copy of the notice signed by the applicant and the
agent, except where the coverage is sold without an agent, shall be
provided to the applicant and an additional signed copy shall be
retained by the issuer as provided in Section 10508. A direct
response issuer shall deliver to the applicant at the time of the
issuance of the policy the notice regarding replacement of Medicare
supplement coverage.
(e) The notice required by subdivision (d) for an issuer shall be
in the form specified by the commissioner, using, to the extent
practicable, a model notice prepared by the National Association of
Insurance Commissioners for this purpose. The replacement notice
shall be printed in no less than 10-point type in substantially the
following form:
Insurer's name and address
NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE
SUPPLEMENT COVERAGE OR MEDICARE ADVANTAGE
SAVE THIS NOTICE! IT MAY BE IMPORTANT IN THE FUTURE.
If you intend to cancel or terminate existing Medicare supplement
or Medicare Advantage insurance and replace it with coverage issued
by company name, please review the new coverage carefully and replace
the existing coverage ONLY if the new coverage materially improves
your position. DO NOT CANCEL YOUR PRESENT COVERAGE UNTIL YOU HAVE
RECEIVED YOUR NEW POLICY AND ARE SURE THAT YOU WANT TO KEEP IT.
If you decide to purchase the new coverage, you will have 30 days
after you receive the policy to return it to the insurer, for any
reason, and receive a refund of your money.
If you want to discuss buying Medicare supplement or Medicare
Advantage coverage with a trained insurance counselor, call the
California Department of Insurance's toll-free telephone number
1-800-927-HELP, and ask how to contact your local Health Insurance
Counseling and Advocacy Program (HICAP) office. HICAP is a service
provided free of charge by the State of California.
STATEMENT TO APPLICANT FROM THE INSURER AND AGENT: I have reviewed
your current health insurance coverage. To the best of my knowledge,
the replacement of insurance involved in this transaction does not
duplicate coverage. In addition, the replacement coverage contains
benefits that are clearly and substantially greater than your current
benefits for the following reasons:
__ Additional benefits that are: ______
__ No change in benefits, but lower premiums.
__ Fewer benefits and lower premiums.
__ Plan has outpatient prescription drug coverage and applicant is
enrolled in Medicare Part D.
__ Disenrollment from a Medicare Advantage plan. Reasons for
disenrollment:
__ Other reasons specified here: ______
DO NOT CANCEL YOUR PRESENT POLICY UNTIL YOU HAVE RECEIVED YOUR NEW
POLICY AND ARE SURE THAT YOU WANT TO KEEP IT.
_________________________________________________
(Signature of Agent, Broker, or Other
Representative)
_________________________________________________
(Signature of Applicant)
_________________________________________________
(Date)
(f) No issuer, broker, agent, or other person shall cause an
insured to replace a Medicare supplement insurance policy
unnecessarily. In recommending replacement of any Medicare supplement
insurance, an agent shall make reasonable efforts to determine the
appropriateness to the potential insured.
(g) Commencing January 1, 2007, an issuer shall not require or
request health information from an applicant who is guaranteed
issuance of any Medicare supplement coverage or require or request
the applicant to sign a form required by the federal Health Insurance
Portability and Accountability Act of 1996. The application form
shall include a clear and conspicuous statement that the applicant is
not required to provide health information or to sign a form
required by the federal Health Insurance Portability and
Accountability Act of 1996 during a period of guaranteed issuance of
any Medicare supplement coverage and shall inform the applicant of
periods of guaranteed insurance of Medicare supplement coverage. A
supplementary application or other form containing those statements
that the applicant and solicitor are required to sign may be used for
this purpose. This subdivision shall not prohibit an issuer from
requiring proof of eligibility for a guaranteed issuance of Medicare
supplement coverage.
10192.185. In addition to any other requirements of law, the
following shall apply to a Medicare supplement policy:
(a) The issuer shall not require an amount greater than one month'
s premium to be submitted with an application for the policy of
insurance if interim coverage is not provided. If interim coverage
is provided, the issuer shall not require an amount greater than two
months' premium for that purpose. No further premiums may be
collected until the policy is delivered to the applicant.
(b) The issuer shall notify the applicant within 60 days from the
date the issuer or issuer's authorized representative or producer
receives the application and the amount as to whether or not the
applicant will be issued a policy of insurance. If the applicant is
not so notified, the issuer or issuer's authorized representative or
producer shall pay interest to the applicant on the funds that the
applicant submitted with the application, at the legal rate of
interest on judgments as provided in Section 685.010 of the Code of
Civil Procedure, from the date the issuer or issuer's authorized
representative or producer received those funds until they are
refunded to the applicant or are applied toward the premium.
10192.19. (a) An issuer shall provide a copy of any Medicare
supplement advertisement intended for use in this state whether
through written, radio, or television medium to the commissioner for
review at least 30 days before dissemination of the advertisement.
The advertisement shall comply with all applicable laws of
California.
(b) A television, radio, mail, or newspaper advertisement which is
designed to produce leads either by use of a coupon or a request to
write or otherwise contact the issuer, a production agent, or other
person or a subsequent advertisement prior to contact shall include
information disclosing that an agent may contact the applicant if
that is the fact. In addition, an agent who makes contact with a
consumer, as a result of acquiring that consumer's name from a lead
generating device shall disclose that fact in the initial contact
with the consumer.
(c) No issuer, agent, broker, solicitor, or other person or other
entity shall solicit residents of this state for the purchase of a
Medicare supplement policy through the use of a true or fictitious
name which is deceptive or misleading with regard to the status,
character, or proprietary or representative capacity of the entity or
person or the true purpose of the advertisement.
(d) For purposes of this section, an advertisement includes
envelopes, stationery, business cards, or other materials designed to
describe and encourage the purchase of a Medicare supplement policy.
(e) Advertisements may not employ words, letters, initials,
symbols, or other devices which are so similar to those used by
governmental agencies, a nonprofit or charitable institution, senior
organization, or other insurer that they could have the capacity or
tendency to mislead the public. Examples of misleading materials,
include, but are not limited to, those which imply any of the
following:
(1) The advertised coverages are somehow provided by or are
endorsed by the governmental agencies or the other insurer.
(2) The advertiser is the same as, is connected with, or is
endorsed by, the governmental agencies, other entity, or other
insurers.
(3) That the advertised coverages are somehow provided by or are
endorsed by the governmental agencies, other entity, or other
insurers.
(f) No advertisement shall use the name of a state or political
subdivision thereof in a policy name or description.
(g) No advertisement may use any name, service mark, slogan,
symbol, or a device in any manner that implies that the issuer or the
Medicare supplement policy advertised, or that any agency who may
call upon the consumer in response to the advertisement is connected
with a governmental agency, such as the Social Security
Administration.
(h) No advertisement shall be used that fails to prominently
display the disclaimer to the effect of "Not Connected with or
endorsed by the U.S. Government or the federal Medicare program."
(i) No advertisement may imply that the reader may lose a right or
privilege or benefit under federal, state, or local law if he or she
fails to respond to the advertisement.
(j) An issuer, agent, broker, or other entity may not use an
address so as to mislead or deceive as to the true identity,
location, or licensing status of the issuer, agent, broker, or other
entity.
(k) No issuer may use, in the trade name of its insurance policy,
any terminology or words so similar to the name of a governmental
agency or governmental program as to have the tendency to confuse,
deceive, or mislead a prospective purchaser.
(l) All advertisements used by agents, producers, brokers,
solicitors, or other persons of an issuer must have prior written
approval of the issuer before they may be used.
(m) No issuer, agent, broker, or other entity may solicit a
particular class by use of advertisements which state or imply that
the occupational or other status as members of the class entitles
them to reduced rates on a group or other basis when, in fact, the
policy being advertised is sold only on an individual basis at
regular rates.
10192.195. The commissioner may prescribe by regulation a standard
form and the contents of an informational brochure for persons
eligible for Medicare by reason of age which is intended to improve
the buyer's ability to select the most appropriate coverage and
improve the buyer's understanding of Medicare. Except in the case of
direct response insurance policies, the commissioner may require by
regulation that the information brochure be provided to any applicant
eligible for Medicare concurrently with delivery of the outline of
coverage. With respect to direct response insurance policies, the
commissioner may require by regulation that the prescribed brochure
be provided upon request to any applicant eligible for Medicare by
reason of age, but in no event later than the time of policy
delivery.
10192.20. (a) An issuer, directly or through its producers, shall
do each of the following:
(1) Establish marketing procedures to ensure that any comparison
of policies by its agents or other producers will be fair and
accurate.
(2) Establish marketing procedures to ensure that excessive
insurance is not sold or issued.
(3) Display prominently by type, stamp, or other appropriate
means, on the first page of the policy, the following:
"Notice to buyer: This policy may not cover all of your medical
expenses."
(4) Inquire and otherwise make every reasonable effort to identify
whether a prospective applicant for a Medicare supplement policy
already has health insurance and the types and amounts of that
insurance.
(5) Establish auditable procedures for verifying compliance with
this subdivision.
(b) In addition to the practices prohibited by this code or any
other law, the following acts and practices are prohibited:
(1) Twisting, which means knowingly making any misleading
representation or incomplete or fraudulent comparison of any
insurance policies or insurers for the purpose of inducing or tending
to induce, any person to lapse, forfeit, surrender, terminate,
retain, pledge, assign, borrow on, or convert an insurance policy or
to take out a policy of insurance with another insurer.
(2) High pressure tactics, which means employing any method of
marketing having the effect of or tending to induce the purchase of
insurance through force, fright, threat, whether explicit or implied,
or undue pressure to purchase or recommend the purchase of
insurance.
(3) Cold lead advertising, which means making use directly or
indirectly of any method of marketing that fails to disclose in a
conspicuous manner that a purpose of the method of marketing is the
solicitation of insurance and that contact will be made by an
insurance agent or insurance company.
(c) The terms "Medicare supplement," "Medigap," "Medicare
Wrap-Around" and words of similar import shall not be used unless the
policy is issued in compliance with this article.
(d) The commissioner each year shall prepare a rate guide for
Medicare supplement insurance and Medicare supplement contracts. The
commissioner each year shall make the rate guide available on or
before the date of the fall Medicare annual open enrollment. The rate
guide shall include all of the following for each company that sells
Medicare supplemental insurance or Medicare supplement contracts in
California:
(1) A listing of all the policies, plans A to L, inclusive, that
are available from the company.
(2) A listing of all the policies, plans A to L, inclusive, for
Medicare beneficiaries under the age of 65 that are available from
the company.
(3) The toll-free telephone number of the company that consumers
can use to obtain information from the company.
(4) Sample rates for each policy listed pursuant to paragraphs (1)
and (2). The sample rates shall be for ages 0-65, 65, 70, 75, and
80.
(5) The premium rate methodology for each policy listed pursuant
to paragraphs (1) and (2). "Premium rate methodology" means attained
age, issue age, or community rated.
(6) The waiting period for preexisting conditions for each policy
listed pursuant to paragraphs (1) and (2).
(e) The consumer rate guide prepared pursuant to subdivision (d)
shall be distributed using all of the following methods:
(1) Through Health Insurance Counseling and Advocacy Program
(HICAP) offices.
(2) By telephone, using the department's consumer toll-free
telephone number.
(3) On the department's Internet Web site.
(4) In addition to the distribution methods described in
paragraphs (1) to (3), inclusive, each insurer that markets Medicare
supplement insurance or Medicare supplement contracts in this state
shall provide on the application form a statement that reads as
follows: "A rate guide is available that compares the policies sold
by different insurers. You can obtain a copy of this rate guide by
calling the Department of Insurance's consumer toll-free telephone
number (1-800-927-HELP), by calling the Health Insurance Counseling
and Advocacy Program (HICAP) toll-free telephone number
(1-800-434-0222), or by accessing the Department of Insurance's
Internet Web site (www.insurance.ca.gov)."
10192.21. (a) In recommending the purchase or replacement of any
Medicare supplement policy or certificate, an agent shall make
reasonable efforts to determine the appropriateness of a recommended
purchase or replacement.
(b) Any sale of a Medicare supplement policy or certificate that
will provide an individual more than one Medicare supplement policy
or certificate is prohibited.
(c) An issuer shall not issue a Medicare supplement policy or
certificate to an individual enrolled in Medicare Part C unless the
effective date of the coverage is after the termination date of the
individual's coverage under Medicare Part C.
10192.22. (a) On or before March 1 of each year, an issuer shall
report the following information for every individual resident of
this state for which the issuer has in force more than one Medicare
supplement policy or certificate:
(1) Policy and certificate number.
(2) Date of issuance.
(b) The items set forth above must be grouped by individual
policyholder.
10192.23. (a) If a Medicare supplement policy or certificate
replaces another Medicare supplement policy or certificate, the
replacing issuer shall waive any time periods applicable to
preexisting conditions, waiting periods, elimination periods, and
probationary periods in the new Medicare supplement policy or
certificate for similar benefits to the extent that time was spent
under the original policy.
(b) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate that has been in
effect for at least six months, the replacing policy shall not
provide any time period applicable to preexisting conditions, waiting
periods, elimination periods and probationary periods for benefits
similar to those contained in the original policy or certificate.
Disclaimer: These codes may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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