Sen. Laura M. Murphy

Filed: 4/27/2021





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2    AMENDMENT NO. ______. Amend Senate Bill 147 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Illinois Insurance Code is amended by
5changing Section 363 as follows:
6    (215 ILCS 5/363)  (from Ch. 73, par. 975)
7    Sec. 363. Medicare supplement policies; minimum standards.
8    (1) Except as otherwise specifically provided therein,
9this Section and Section 363a of this Code shall apply to:
10        (a) all Medicare supplement policies and subscriber
11    contracts delivered or issued for delivery in this State
12    on and after January 1, 1989; and
13        (b) all certificates issued under group Medicare
14    supplement policies or subscriber contracts, which
15    certificates are issued or issued for delivery in this
16    State on and after January 1, 1989.



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1    This Section shall not apply to "Accident Only" or
2"Specified Disease" types of policies. The provisions of this
3Section are not intended to prohibit or apply to policies or
4health care benefit plans, including group conversion
5policies, provided to Medicare eligible persons, which
6policies or plans are not marketed or purported or held to be
7Medicare supplement policies or benefit plans.
8    (2) For the purposes of this Section and Section 363a, the
9following terms have the following meanings:
10        (a) "Applicant" means:
11            (i) in the case of individual Medicare supplement
12        policy, the person who seeks to contract for insurance
13        benefits, and
14            (ii) in the case of a group Medicare policy or
15        subscriber contract, the proposed certificate holder.
16        (b) "Certificate" means any certificate delivered or
17    issued for delivery in this State under a group Medicare
18    supplement policy.
19        (c) "Medicare supplement policy" means an individual
20    policy of accident and health insurance, as defined in
21    paragraph (a) of subsection (2) of Section 355a of this
22    Code, or a group policy or certificate delivered or issued
23    for delivery in this State by an insurer, fraternal
24    benefit society, voluntary health service plan, or health
25    maintenance organization, other than a policy issued
26    pursuant to a contract under Section 1876 of the federal



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1    Social Security Act (42 U.S.C. Section 1395 et seq.) or a
2    policy issued under a demonstration project specified in
3    42 U.S.C. Section 1395ss(g)(1), or any similar
4    organization, that is advertised, marketed, or designed
5    primarily as a supplement to reimbursements under Medicare
6    for the hospital, medical, or surgical expenses of persons
7    eligible for Medicare.
8        (d) "Issuer" includes insurance companies, fraternal
9    benefit societies, voluntary health service plans, health
10    maintenance organizations, or any other entity providing
11    Medicare supplement insurance, unless the context clearly
12    indicates otherwise.
13        (e) "Medicare" means the Health Insurance for the Aged
14    Act, Title XVIII of the Social Security Amendments of
15    1965.
16    (3) No Medicare supplement insurance policy, contract, or
17certificate, that provides benefits that duplicate benefits
18provided by Medicare, shall be issued or issued for delivery
19in this State after December 31, 1988. No such policy,
20contract, or certificate shall provide lesser benefits than
21those required under this Section or the existing Medicare
22Supplement Minimum Standards Regulation, except where
23duplication of Medicare benefits would result.
24    (4) Medicare supplement policies or certificates shall
25have a notice prominently printed on the first page of the
26policy or attached thereto stating in substance that the



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1policyholder or certificate holder shall have the right to
2return the policy or certificate within 30 days of its
3delivery and to have the premium refunded directly to him or
4her in a timely manner if, after examination of the policy or
5certificate, the insured person is not satisfied for any
7    (5) A Medicare supplement policy or certificate may not
8deny a claim for losses incurred more than 6 months from the
9effective date of coverage for a preexisting condition. The
10policy may not define a preexisting condition more
11restrictively than a condition for which medical advice was
12given or treatment was recommended by or received from a
13physician within 6 months before the effective date of
15    (6) An issuer of a Medicare supplement policy shall:
16        (a) not deny coverage to an applicant under 65 years
17    of age who meets any of the following criteria:
18            (i) becomes eligible for Medicare by reason of
19        disability if the person makes application for a
20        Medicare supplement policy within 6 months of the
21        first day on which the person enrolls for benefits
22        under Medicare Part B; for a person who is
23        retroactively enrolled in Medicare Part B due to a
24        retroactive eligibility decision made by the Social
25        Security Administration, the application must be
26        submitted within a 6-month period beginning with the



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1        month in which the person received notice of
2        retroactive eligibility to enroll;
3            (ii) has Medicare and an employer group health
4        plan (either primary or secondary to Medicare) that
5        terminates or ceases to provide all such supplemental
6        health benefits;
7            (iii) is insured by a Medicare Advantage plan that
8        includes a Health Maintenance Organization, a
9        Preferred Provider Organization, and a Private
10        Fee-For-Service or Medicare Select plan and the
11        applicant moves out of the plan's service area; the
12        insurer goes out of business, withdraws from the
13        market, or has its Medicare contract terminated; or
14        the plan violates its contract provisions or is
15        misrepresented in its marketing; or
16            (iv) is insured by a Medicare supplement policy
17        and the insurer goes out of business, withdraws from
18        the market, or the insurance company or agents
19        misrepresent the plan and the applicant is without
20        coverage;
21        (b) make available to persons eligible for Medicare by
22    reason of disability each type of Medicare supplement
23    policy the issuer makes available to persons eligible for
24    Medicare by reason of age;
25        (c) not charge individuals who become eligible for
26    Medicare by reason of disability and who are under the age



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1    of 65 premium rates for any medical supplemental insurance
2    benefit plan offered by the issuer that exceed the
3    issuer's highest rate on the current rate schedule filed
4    with the Division of Insurance for that plan to
5    individuals who are age 65 or older; and
6        (d) provide the rights granted by items (a) through
7    (d), for 6 months after the effective date of this
8    amendatory Act of the 95th General Assembly, to any person
9    who had enrolled for benefits under Medicare Part B prior
10    to this amendatory Act of the 95th General Assembly who
11    otherwise would have been eligible for coverage under item
12    (a).
13    (7) The Director shall issue reasonable rules and
14regulations for the following purposes:
15        (a) To establish specific standards for policy
16    provisions of Medicare policies and certificates. The
17    standards shall be in accordance with the requirements of
18    this Code. No requirement of this Code relating to minimum
19    required policy benefits, other than the minimum standards
20    contained in this Section and Section 363a, shall apply to
21    Medicare medicare supplement policies and certificates.
22    The standards may cover, but are not limited to the
23    following:
24            (A) Terms of renewability.
25            (B) Initial and subsequent terms of eligibility.
26            (C) Non-duplication of coverage.



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1            (D) Probationary and elimination periods.
2            (E) Benefit limitations, exceptions and
3        reductions.
4            (F) Requirements for replacement.
5            (G) Recurrent conditions.
6            (H) Definition of terms.
7            (I) Requirements for issuing rebates or credits to
8        policyholders if the policy's loss ratio does not
9        comply with subsection (7) of Section 363a.
10            (J) Uniform methodology for the calculating and
11        reporting of loss ratio information.
12            (K) Assuring public access to loss ratio
13        information of an issuer of Medicare supplement
14        insurance.
15            (L) Establishing a process for approving or
16        disapproving proposed premium increases.
17            (M) Establishing a policy for holding public
18        hearings prior to approval of premium increases.
19            (N) Establishing standards for Medicare Select
20        policies.
21            (O) Prohibited policy provisions not otherwise
22        specifically authorized by statute that, in the
23        opinion of the Director, are unjust, unfair, or
24        unfairly discriminatory to any person insured or
25        proposed for coverage under a medicare supplement
26        policy or certificate.



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1        (b) To establish minimum standards for benefits and
2    claims payments, marketing practices, compensation
3    arrangements, and reporting practices for Medicare
4    supplement policies.
5        (c) To implement transitional requirements of Medicare
6    supplement insurance benefits and premiums of Medicare
7    supplement policies and certificates to conform to
8    Medicare program revisions.
9    (8) If an individual is at least 65 years of age but no
10more than 75 years of age and has an existing Medicare
11supplement policy, the individual is entitled to an annual
12open enrollment period lasting 45 days, commencing with the
13individual's birthday, and the individual may purchase any
14Medicare supplement policy with the same issuer that offers
15benefits equal to or lesser than those provided by the
16previous coverage. During this open enrollment period, an
17issuer of a Medicare supplement policy shall not deny or
18condition the issuance or effectiveness of Medicare
19supplemental coverage, nor discriminate in the pricing of
20coverage, because of health status, claims experience, receipt
21of health care, or a medical condition of the individual. An
22issuer shall provide notice of this annual open enrollment
23period for eligible Medicare supplement policyholders at the
24time that the application is made for a Medicare supplement
25policy or certificate. The notice shall be in a form that may
26be prescribed by the Department.



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1(Source: P.A. 95-436, eff. 6-1-08.)
2    Section 99. Effective date. This Act takes effect on
3January 1, 2022.".