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1 | AN ACT concerning insurance.
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2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||
5 | changing
Section 363 as follows:
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6 | (215 ILCS 5/363) (from Ch. 73, par. 975)
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7 | Sec. 363. Medicare supplement policies; minimum standards.
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8 | (1) Except as otherwise specifically provided therein, | |||||||||||||||||||
9 | this
Section and Section 363a of this Code shall apply to:
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10 | (a) all Medicare supplement policies and subscriber | |||||||||||||||||||
11 | contracts delivered
or issued for delivery in this State on | |||||||||||||||||||
12 | and after January 1, 1989; and
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13 | (b) all certificates issued under group Medicare | |||||||||||||||||||
14 | supplement policies or
subscriber contracts, which | |||||||||||||||||||
15 | certificates are issued or issued for delivery
in this | |||||||||||||||||||
16 | State on and after January 1, 1989.
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17 | This Section shall not apply to "Accident Only" or | |||||||||||||||||||
18 | "Specified Disease"
types of policies. The provisions of this | |||||||||||||||||||
19 | Section are not intended to prohibit
or apply to policies or | |||||||||||||||||||
20 | health care benefit plans, including group
conversion | |||||||||||||||||||
21 | policies, provided to Medicare eligible persons, which | |||||||||||||||||||
22 | policies
or plans are not marketed or purported or held to be | |||||||||||||||||||
23 | Medicare supplement
policies or benefit plans.
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1 | (2) For the purposes of this Section and Section 363a, the | ||||||
2 | following
terms have the following meanings:
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3 | (a) "Applicant" means:
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4 | (i) in the case of individual Medicare supplement | ||||||
5 | policy, the person
who seeks to contract for insurance | ||||||
6 | benefits, and
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7 | (ii) in the case of a group Medicare policy or | ||||||
8 | subscriber contract, the
proposed certificate holder.
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9 | (b) "Certificate" means any certificate delivered or | ||||||
10 | issued for
delivery in this State under a group Medicare
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11 | supplement policy.
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12 | (c) "Medicare supplement policy" means an individual
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13 | policy of
accident and health insurance, as defined in | ||||||
14 | paragraph (a) of subsection (2)
of Section 355a of this | ||||||
15 | Code, or a group policy or certificate delivered or
issued | ||||||
16 | for
delivery in this State by an insurer, fraternal benefit | ||||||
17 | society, voluntary
health service plan, or health | ||||||
18 | maintenance organization, other than a policy
issued | ||||||
19 | pursuant to a contract under Section 1876 of the
federal
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20 | Social Security Act (42 U.S.C. Section 1395 et seq.) or a | ||||||
21 | policy
issued under
a
demonstration project specified in 42 | ||||||
22 | U.S.C. Section 1395ss(g)(1), or
any similar organization, | ||||||
23 | that is advertised, marketed, or designed
primarily as a | ||||||
24 | supplement to reimbursements under Medicare for the
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25 | hospital, medical, or surgical expenses of persons | ||||||
26 | eligible for Medicare.
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1 | (d) "Issuer" includes insurance companies, fraternal | ||||||
2 | benefit
societies, voluntary health service plans, health | ||||||
3 | maintenance
organizations, or any other entity providing | ||||||
4 | Medicare supplement insurance,
unless the context clearly | ||||||
5 | indicates otherwise.
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6 | (e) "Medicare" means the Health Insurance for the Aged | ||||||
7 | Act, Title
XVIII of the Social Security Amendments of 1965.
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8 | (3) No Medicare supplement insurance policy, contract, or
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9 | certificate,
that provides benefits that duplicate benefits | ||||||
10 | provided by Medicare, shall
be issued or issued for delivery in | ||||||
11 | this State after December 31, 1988. No
such policy, contract, | ||||||
12 | or certificate shall provide lesser benefits than
those | ||||||
13 | required under this Section or the existing Medicare Supplement
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14 | Minimum Standards Regulation, except where duplication of | ||||||
15 | Medicare benefits
would result.
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16 | (4) Medicare supplement policies or certificates shall | ||||||
17 | have a
notice
prominently printed on the first page of the | ||||||
18 | policy or attached thereto
stating in substance that the | ||||||
19 | policyholder or certificate holder shall have
the right to | ||||||
20 | return the policy or certificate within 30 days of its
delivery | ||||||
21 | and to have the premium refunded directly to him or her in a
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22 | timely manner if, after examination of the policy or | ||||||
23 | certificate, the
insured person is not satisfied for any | ||||||
24 | reason.
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25 | (5) A Medicare supplement policy or certificate may not | ||||||
26 | deny a
claim
for losses incurred more than 6 months from the |
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1 | effective date of coverage
for a preexisting condition. The | ||||||
2 | policy may not define a preexisting
condition more | ||||||
3 | restrictively than a condition for which medical advice was
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4 | given or treatment was recommended by or received from a | ||||||
5 | physician within 6
months before the effective date of | ||||||
6 | coverage.
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7 | (6) An issuer of a Medicare supplement policy shall:
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8 | (a) not deny coverage to an applicant under 65 years of | ||||||
9 | age who meets any of the following criteria: | ||||||
10 | (i) becomes eligible for Medicare by reason of | ||||||
11 | disability if the person makes
application for a | ||||||
12 | Medicare supplement policy within 6 months of the first | ||||||
13 | day
on
which the person enrolls for benefits under | ||||||
14 | Medicare Part B; for a person who
is retroactively | ||||||
15 | enrolled in Medicare Part B due to a retroactive | ||||||
16 | eligibility
decision made by the Social Security | ||||||
17 | Administration, the application must be
submitted | ||||||
18 | within a 6-month period beginning with the month in | ||||||
19 | which the person
received notice of retroactive | ||||||
20 | eligibility to enroll; | ||||||
21 | (ii) has Medicare and an employer group health plan | ||||||
22 | (either primary or secondary to Medicare) that | ||||||
23 | terminates or ceases to provide all such supplemental | ||||||
24 | health benefits; | ||||||
25 | (iii) is insured by a Medicare Advantage plan that | ||||||
26 | includes a Health Maintenance Organization, a |
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1 | Preferred Provider Organization, and a Private | ||||||
2 | Fee-For-Service or Medicare Select plan and the | ||||||
3 | applicant moves out of the plan's service area; the | ||||||
4 | insurer goes out of business, withdraws from the | ||||||
5 | market, or has its Medicare contract terminated; or the | ||||||
6 | plan violates its contract provisions or is | ||||||
7 | misrepresented in its marketing; or | ||||||
8 | (iv) is insured by a Medicare supplement policy and | ||||||
9 | the insurer goes out of business, withdraws from the | ||||||
10 | market, or the insurance company or agents | ||||||
11 | misrepresent the plan and the applicant is without | ||||||
12 | coverage;
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13 | (b) make available to persons eligible for Medicare by | ||||||
14 | reason of
disability each type of Medicare supplement | ||||||
15 | policy the issuer makes available
to persons eligible for | ||||||
16 | Medicare by reason of age;
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17 | (c) not charge individuals who become eligible for | ||||||
18 | Medicare by
reason of disability and who are under the age | ||||||
19 | of 65 premium rates for any
medical supplemental insurance | ||||||
20 | benefit plan offered by the issuer that exceed
the issuer's | ||||||
21 | premium rates charged for that plan to individuals who are | ||||||
22 | age 65
or older;
and
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23 | (d) provide the rights granted by items (a) through | ||||||
24 | (d), for 6 months
after the effective date of this | ||||||
25 | amendatory Act of the 95th General
Assembly, to any person | ||||||
26 | who had enrolled for benefits under Medicare Part B
prior |
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1 | to this amendatory Act of the 95th General Assembly who | ||||||
2 | otherwise would
have been eligible for coverage under item | ||||||
3 | (a).
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4 | (7)
(6) The Director shall issue reasonable rules and | ||||||
5 | regulations
for the
following purposes:
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6 | (a) To establish specific standards for policy | ||||||
7 | provisions of Medicare
policies and certificates. The | ||||||
8 | standards shall be in
accordance with the requirements of | ||||||
9 | this Code. No requirement of this Code
relating to minimum | ||||||
10 | required policy benefits, other than the minimum
standards | ||||||
11 | contained in this Section and Section 363a, shall apply to
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12 | medicare supplement policies and certificates. The | ||||||
13 | standards may
cover, but are not limited to the following:
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14 | (A) Terms of renewability.
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15 | (B) Initial and subsequent terms of eligibility.
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16 | (C) Non-duplication of coverage.
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17 | (D) Probationary and elimination periods.
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18 | (E) Benefit limitations, exceptions and | ||||||
19 | reductions.
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20 | (F) Requirements for replacement.
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21 | (G) Recurrent conditions.
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22 | (H) Definition of terms.
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23 | (I) Requirements for issuing rebates or credits to | ||||||
24 | policyholders
if the policy's loss ratio does not | ||||||
25 | comply with subsection (7) of
Section 363a.
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26 | (J) Uniform methodology for the calculating and |
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1 | reporting of loss
ratio information.
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2 | (K) Assuring public access to loss ratio | ||||||
3 | information of an issuer of
Medicare supplement | ||||||
4 | insurance.
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5 | (L) Establishing a process for approving or | ||||||
6 | disapproving proposed
premium increases.
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7 | (M) Establishing a policy for holding public | ||||||
8 | hearings prior to
approval of premium increases.
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9 | (N) Establishing standards for Medicare Select | ||||||
10 | policies.
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11 | (O) Prohibited policy provisions not otherwise | ||||||
12 | specifically authorized
by statute that, in the | ||||||
13 | opinion of the Director, are unjust, unfair, or
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14 | unfairly discriminatory to any person insured or | ||||||
15 | proposed for coverage
under a medicare supplement | ||||||
16 | policy or certificate.
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17 | (b) To establish minimum standards for benefits and | ||||||
18 | claims payments,
marketing practices, compensation | ||||||
19 | arrangements, and reporting practices
for Medicare | ||||||
20 | supplement policies.
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21 | (c) To implement transitional requirements of Medicare | ||||||
22 | supplement
insurance benefits and premiums of Medicare | ||||||
23 | supplement policies and
certificates to conform to | ||||||
24 | Medicare program revisions.
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25 | (Source: P.A. 88-313; 89-484, eff. 6-21-96.)
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