101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2501

 

Introduced 1/28/2020, by Sen. Laura M. Murphy

 

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

    Amends the Illinois Insurance Code. Provides that a Medicare supplement policyholder is entitled to an annual open enrollment period lasting 60 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. Provides that, during the open enrollment period, an issuer of a Medicare supplement policy shall not deny or condition the issuance or effectiveness of Medicare supplemental coverage, nor discriminate in the pricing of coverage, because of health status, claims experience, receipt of health care, or a 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. Requires an issuer to notify a policyholder of his or her rights under this subsection at least 30 days and no more than 60 days before the beginning of the open enrollment period, and on any notice related to a benefit modification or premium adjustment.


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A BILL FOR

 

SB2501LRB101 17159 BMS 66560 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 363 as follows:
 
6    (215 ILCS 5/363)  (from Ch. 73, par. 975)
7    Sec. 363. Medicare supplement policies; minimum standards.
8    (1) Except as otherwise specifically provided therein,
9this Section and Section 363a of this Code shall apply to:
10        (a) all Medicare supplement policies and subscriber
11    contracts delivered or issued for delivery in this State 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
19Section are not intended to prohibit or apply to policies or
20health care benefit plans, including group conversion
21policies, provided to Medicare eligible persons, which
22policies or plans are not marketed or purported or held to be
23Medicare supplement policies or benefit plans.

 

 

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1    (2) For the purposes of this Section and Section 363a, the
2following terms have the following meanings:
3        (a) "Applicant" means:
4            (i) in the case of individual Medicare supplement
5        policy, the person who seeks to contract for insurance
6        benefits, and
7            (ii) in the case of a group Medicare policy or
8        subscriber contract, the proposed certificate holder.
9        (b) "Certificate" means any certificate delivered or
10    issued for delivery in this State under a group Medicare
11    supplement policy.
12        (c) "Medicare supplement policy" means an individual
13    policy of accident and health insurance, as defined in
14    paragraph (a) of subsection (2) of Section 355a of this
15    Code, or a group policy or certificate delivered or issued
16    for delivery in this State by an insurer, fraternal 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
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
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.
6        (e) "Medicare" means the Health Insurance for the Aged
7    Act, Title XVIII of the Social Security Amendments of 1965.
8    (3) No Medicare supplement insurance policy, contract, or
9certificate, that provides benefits that duplicate benefits
10provided by Medicare, shall be issued or issued for delivery in
11this State after December 31, 1988. No such policy, contract,
12or certificate shall provide lesser benefits than those
13required under this Section or the existing Medicare Supplement
14Minimum Standards Regulation, except where duplication of
15Medicare benefits would result.
16    (4) Medicare supplement policies or certificates shall
17have a notice prominently printed on the first page of the
18policy or attached thereto stating in substance that the
19policyholder or certificate holder shall have the right to
20return the policy or certificate within 30 days of its delivery
21and to have the premium refunded directly to him or her in a
22timely manner if, after examination of the policy or
23certificate, the insured person is not satisfied for any
24reason.
25    (5) A Medicare supplement policy or certificate may not
26deny a claim for losses incurred more than 6 months from the

 

 

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1effective date of coverage for a preexisting condition. The
2policy may not define a preexisting condition more
3restrictively than a condition for which medical advice was
4given or treatment was recommended by or received from a
5physician within 6 months before the effective date of
6coverage.
7    (6) An issuer of a Medicare supplement policy shall:
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;
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;
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    highest rate on the current rate schedule filed with the
22    Division of Insurance for that plan to individuals who are
23    age 65 or older; and
24        (d) provide the rights granted by items (a) through
25    (d), for 6 months after the effective date of this
26    amendatory Act of the 95th General Assembly, to any person

 

 

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

 

 

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

 

 

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1        (8) A Medicare supplement policyholder is entitled to
2    an annual open enrollment period lasting 60 days or more,
3    commencing with the individual's birthday, during which
4    time that person may purchase any Medicare supplement
5    policy that offers benefits equal to or lesser than those
6    provided by the previous coverage. During this open
7    enrollment period, an issuer of a Medicare supplement
8    policy shall not deny or condition the issuance or
9    effectiveness of Medicare supplemental coverage, nor
10    discriminate in the pricing of coverage, because of health
11    status, claims experience, receipt of health care, or a
12    medical condition of the individual if, at the time of the
13    open enrollment period, the individual is covered under
14    another Medicare supplement policy or contract. An issuer
15    shall notify a policyholder of his or her rights under this
16    subsection at least 30 days and no more than 60 days before
17    the beginning of the open enrollment period, and on any
18    notice related to a benefit modification or premium
19    adjustment.
20(Source: P.A. 95-436, eff. 6-1-08.)