93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB3172

 

Introduced 2/6/2004, by Ira I. Silverstein

 

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

    Amends the Illinois Insurance Code. Prohibits issuers of Medicare supplemental policies or certificates available for sale in this State from discriminating 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 within 6 months of the first day on which the person enrolls for benefits under Medicare Part B or within a 6 month period beginning with the month in which the person received notice of retroactive eligibility to enroll. Requires issuers to: make available to persons eligible for Medicare without regard to age each type of Medicare supplement policy the issuer currently makes available in this State; and provide the rights granted by the new provisions to any person who had enrolled for benefits under Medicare Part B prior to this amendatory Act who otherwise would have been eligible for coverage under the new provisions.


LRB093 16343 SAS 41981 b

 

 

A BILL FOR

 

SB3172 LRB093 16343 SAS 41981 b

1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by
5 changing Section 363 as follows:
 
6     (215 ILCS 5/363)  (from Ch. 73, par. 975)
7     Sec. 363. Medicare supplement policies; minimum standards.
8     (1) Except as otherwise specifically provided therein,
9 this 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 on
12     and after January 1, 1989; and
13         (b) all certificates issued under group Medicare
14     supplement policies or subscriber contracts, which
15     certificates are issued or issued for delivery in this
16     State on and after January 1, 1989.
17     This Section shall not apply to "Accident Only" or
18 "Specified Disease" types of policies. The provisions of this
19 Section are not intended to prohibit or apply to policies or
20 health care benefit plans, including group conversion
21 policies, provided to Medicare eligible persons, which
22 policies or plans are not marketed or purported or held to be
23 Medicare supplement policies or benefit plans.
24     (2) For the purposes of this Section and Section 363a, the
25 following terms have the following meanings:
26         (a) "Applicant" means:
27             (i) in the case of individual Medicare supplement
28         policy, the person who seeks to contract for insurance
29         benefits, and
30             (ii) in the case of a group Medicare policy or
31         subscriber contract, the proposed certificate holder.
32         (b) "Certificate" means any certificate delivered or

 

 

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1     issued for delivery in this State under a group Medicare
2     supplement policy.
3         (c) "Medicare supplement policy" means an individual
4     policy of accident and health insurance, as defined in
5     paragraph (a) of subsection (2) of Section 355a of this
6     Code, or a group policy or certificate delivered or issued
7     for delivery in this State by an insurer, fraternal benefit
8     society, voluntary health service plan, or health
9     maintenance organization, other than a policy issued
10     pursuant to a contract under Section 1876 of the federal
11     Social Security Act (42 U.S.C. Section 1395 et seq.) or a
12     policy issued under a demonstration project specified in 42
13     U.S.C. Section 1395ss(g)(1), or any similar organization,
14     that is advertised, marketed, or designed primarily as a
15     supplement to reimbursements under Medicare for the
16     hospital, medical, or surgical expenses of persons
17     eligible for Medicare.
18         (d) "Issuer" includes insurance companies, fraternal
19     benefit societies, voluntary health service plans, health
20     maintenance organizations, or any other entity providing
21     Medicare supplement insurance, unless the context clearly
22     indicates otherwise.
23         (e) "Medicare" means the Health Insurance for the Aged
24     Act, Title XVIII of the Social Security Amendments of 1965.
25     (3) No medicare supplement insurance policy, contract, or
26 certificate, that provides benefits that duplicate benefits
27 provided by Medicare, shall be issued or issued for delivery in
28 this State after December 31, 1988. No such policy, contract,
29 or certificate shall provide lesser benefits than those
30 required under this Section or the existing Medicare Supplement
31 Minimum Standards Regulation, except where duplication of
32 Medicare benefits would result.
33     (4) Medicare supplement policies or certificates shall
34 have a notice prominently printed on the first page of the
35 policy or attached thereto stating in substance that the
36 policyholder or certificate holder shall have the right to

 

 

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1 return the policy or certificate within 30 days of its delivery
2 and to have the premium refunded directly to him or her in a
3 timely manner if, after examination of the policy or
4 certificate, the insured person is not satisfied for any
5 reason.
6     (5) A Medicare supplement policy or certificate may not
7 deny a claim for losses incurred more than 6 months from the
8 effective date of coverage for a preexisting condition. The
9 policy may not define a preexisting condition more
10 restrictively than a condition for which medical advice was
11 given or treatment was recommended by or received from a
12 physician within 6 months before the effective date of
13 coverage.
14     (5.5) An issuer of a Medicare supplement policy shall:
15         (a) not deny coverage or condition the issuance or
16     effectiveness of any Medicare supplement policy or
17     certificate available for sale in this State, nor
18     discriminate in the pricing of a policy or certificate
19     because of the health status, claims experience, receipt of
20     health care, or medical condition of an applicant in the
21     case of an application for a policy or certificate that is
22     submitted within 6 months of the first day on which the
23     person enrolls for benefits under Medicare Part B; for a
24     person who is retroactively enrolled in Medicare Part B due
25     to a retroactive eligibility decision made by the Social
26     Security Administration, the application must be submitted
27     within a 6-month period beginning with the month in which
28     the person received notice of retroactive eligibility to
29     enroll;
30         (b) make available to persons eligible for Medicare
31     without regard to age each type of Medicare supplement
32     policy the issuer currently makes available in this State;
33         (c) provide the rights granted by items (a) through (c)
34     for 6 months after the effective date of this amendatory
35     Act of the 93rd General Assembly, to any person who had
36     enrolled for benefits under Medicare Part B prior to this

 

 

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1     amendatory Act of the 93rd General Assembly who otherwise
2     would have been eligible for coverage under item (a).
3     (6) The Director shall issue reasonable rules and
4 regulations for the following purposes:
5         (a) To establish specific standards for policy
6     provisions of Medicare policies and certificates. The
7     standards shall be in accordance with the requirements of
8     this Code. No requirement of this Code relating to minimum
9     required policy benefits, other than the minimum standards
10     contained in this Section and Section 363a, shall apply to
11     medicare supplement policies and certificates. The
12     standards may cover, but are not limited to the following:
13             (A) Terms of renewability.
14             (B) Initial and subsequent terms of eligibility.
15             (C) Non-duplication of coverage.
16             (D) Probationary and elimination periods.
17             (E) Benefit limitations, exceptions and
18         reductions.
19             (F) Requirements for replacement.
20             (G) Recurrent conditions.
21             (H) Definition of terms.
22             (I) Requirements for issuing rebates or credits to
23         policyholders if the policy's loss ratio does not
24         comply with subsection (7) of Section 363a.
25             (J) Uniform methodology for the calculating and
26         reporting of loss ratio information.
27             (K) Assuring public access to loss ratio
28         information of an issuer of Medicare supplement
29         insurance.
30             (L) Establishing a process for approving or
31         disapproving proposed premium increases.
32             (M) Establishing a policy for holding public
33         hearings prior to approval of premium increases.
34             (N) Establishing standards for Medicare Select
35         policies.
36             (O) Prohibited policy provisions not otherwise

 

 

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1         specifically authorized by statute that, in the
2         opinion of the Director, are unjust, unfair, or
3         unfairly discriminatory to any person insured or
4         proposed for coverage under a medicare supplement
5         policy or certificate.
6         (b) To establish minimum standards for benefits and
7     claims payments, marketing practices, compensation
8     arrangements, and reporting practices for Medicare
9     supplement policies.
10         (c) To implement transitional requirements of Medicare
11     supplement insurance benefits and premiums of Medicare
12     supplement policies and certificates to conform to
13     Medicare program revisions.
14 (Source: P.A. 88-313; 89-484, eff. 6-21-96.)