Illinois General Assembly - Full Text of SB0873
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Full Text of SB0873  95th General Assembly


Sen. M. Maggie Crotty

Filed: 5/23/2007





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2     AMENDMENT NO. ______. Amend Senate Bill 873 by replacing
3 everything after the enacting clause with the following:
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.



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1     This Section shall not apply to "Accident Only" or
2 "Specified Disease" types of policies. The provisions of this
3 Section are not intended to prohibit or apply to policies or
4 health care benefit plans, including group conversion
5 policies, provided to Medicare eligible persons, which
6 policies or plans are not marketed or purported or held to be
7 Medicare supplement policies or benefit plans.
8     (2) For the purposes of this Section and Section 363a, the
9 following 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 benefit
24     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 42
3     U.S.C. Section 1395ss(g)(1), or any similar organization,
4     that is advertised, marketed, or designed primarily as a
5     supplement to reimbursements under Medicare for the
6     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 1965.
15     (3) No Medicare supplement insurance policy, contract, or
16 certificate, that provides benefits that duplicate benefits
17 provided by Medicare, shall be issued or issued for delivery in
18 this State after December 31, 1988. No such policy, contract,
19 or certificate shall provide lesser benefits than those
20 required under this Section or the existing Medicare Supplement
21 Minimum Standards Regulation, except where duplication of
22 Medicare benefits would result.
23     (4) Medicare supplement policies or certificates shall
24 have a notice prominently printed on the first page of the
25 policy or attached thereto stating in substance that the
26 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     (6) An issuer of a Medicare supplement policy shall:
15         (a) not deny coverage to an applicant under 65 years of
16     age who meets any of the following criteria:
17             (i) becomes eligible for Medicare by reason of
18         disability if the person makes application for a
19         Medicare supplement policy within 6 months of the first
20         day on which the person enrolls for benefits under
21         Medicare Part B; for a person who is retroactively
22         enrolled in Medicare Part B due to a retroactive
23         eligibility decision made by the Social Security
24         Administration, the application must be submitted
25         within a 6-month period beginning with the month in
26         which the person received notice of retroactive



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1         eligibility to enroll;
2             (ii) has Medicare and an employer group health plan
3         (either primary or secondary to Medicare) that
4         terminates or ceases to provide all such supplemental
5         health benefits;
6             (iii) is insured by a Medicare Advantage plan that
7         includes a Health Maintenance Organization, a
8         Preferred Provider Organization, and a Private
9         Fee-For-Service or Medicare Select plan and the
10         applicant moves out of the plan's service area; the
11         insurer goes out of business, withdraws from the
12         market, or has its Medicare contract terminated; or the
13         plan violates its contract provisions or is
14         misrepresented in its marketing; or
15             (iv) is insured by a Medicare supplement policy and
16         the insurer goes out of business, withdraws from the
17         market, or the insurance company or agents
18         misrepresent the plan and the applicant is without
19         coverage;
20         (b) make available to persons eligible for Medicare by
21     reason of disability each type of Medicare supplement
22     policy the issuer makes available to persons eligible for
23     Medicare by reason of age;
24         (c) not charge individuals who become eligible for
25     Medicare by reason of disability and who are under the age
26     of 65 premium rates for any medical supplemental insurance



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



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



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1     supplement policies.
2         (c) To implement transitional requirements of Medicare
3     supplement insurance benefits and premiums of Medicare
4     supplement policies and certificates to conform to
5     Medicare program revisions.
6 (Source: P.A. 88-313; 89-484, eff. 6-21-96.)".