1358.8
. The following standards are applicable to all Medicare
supplement contracts advertised, solicited, or issued for delivery on
or after January 1, 2001, and with an effective date prior to June
1, 2010. A contract shall not be advertised, solicited, or issued for
delivery as a Medicare supplement contract unless it complies with
these benefit standards.
(a) The following general standards apply to Medicare supplement
contracts and are in addition to all other requirements of this
article:
(1) A Medicare supplement contract shall not exclude or limit
benefits for losses incurred more than six months from the effective
date of coverage because it involved a preexisting condition. The
contract shall not define a preexisting condition more restrictively
than a condition for which medical advice was given or treatment was
recommended by or received from a physician within six months before
the effective date of coverage.
(2) A Medicare supplement contract shall not indemnify against
losses resulting from sickness on a different basis than losses
resulting from accidents.
(3) A Medicare supplement contract shall provide that benefits
designed to cover cost-sharing amounts under Medicare will be changed
automatically to coincide with any changes in the applicable
Medicare deductible, copayment, or coinsurance amounts. Prepaid or
periodic charges may be modified to correspond with those changes.
(4) A Medicare supplement contract shall not provide for
termination of coverage of a spouse solely because of the occurrence
of an event specified for termination of coverage of the covered
person, other than the nonpayment of the prepaid or periodic charge.
(5) Each Medicare supplement contract shall be guaranteed
renewable.
(A) The issuer shall not cancel or nonrenew the contract solely on
the ground of health status of the individual.
(B) The issuer shall not cancel or nonrenew the contract for any
reason other than nonpayment of the prepaid or periodic charge or
misrepresentation of the risk by the applicant that is shown by the
plan to be material to the acceptance for coverage. The
contestability period for Medicare supplement contracts shall be two
years.
(C) If a group Medicare supplement contract is terminated by the
subscriber and is not replaced as provided under subparagraph (E),
the issuer shall offer enrollees an individual Medicare supplement
contract that, at the option of the enrollee, either provides for
continuation of the benefits contained in the terminated contract or
provides for benefits that otherwise meet the requirements of this
subsection.
(D) If an individual is an enrollee in a group Medicare supplement
contract and the individual membership in the group is terminated,
the issuer shall either offer the enrollee the conversion opportunity
described in subparagraph (C) or, at the option of the subscriber,
shall offer the enrollee continuation of coverage under the group
contract.
(E) If a group Medicare supplement contract is replaced by another
group Medicare supplement contract purchased by the same subscriber,
the issuer of the replacement contract shall offer coverage to all
persons covered under the old group contract on its date of
termination. Coverage under the new contract shall not result in any
exclusion for preexisting conditions that would have been covered
under the group contract being replaced.
(F) If a Medicare supplement contract eliminates an outpatient
prescription drug benefit as a result of requirements imposed by the
Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Public Law 108-173), the contract as modified as a result of
that act shall be deemed to satisfy the guaranteed renewal
requirements of this paragraph.
(6) Termination of a Medicare supplement contract shall be without
prejudice to any continuous loss that commenced while the contract
was in force, but the extension of benefits beyond the period during
which the contract was in force may be predicated upon the continuous
total disability of the covered person, limited to the duration of
the contract benefit period, if any, or to payment of the maximum
benefits. Receipt of Medicare Part D benefits shall not be considered
in determining a continuous loss.
(7) (A) (i) A Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended at the request of the enrollee for the period, not to
exceed 24 months, in which the enrollee has applied for and is
determined to be entitled to medical assistance under Title XIX of
the federal Social Security Act, but only if the enrollee notifies
the issuer of the contract within 90 days after the date the
individual becomes entitled to assistance.
If suspension occurs and if the enrollee loses entitlement to
medical assistance, the contract shall be automatically reinstituted
(effective as of the date of termination of entitlement) as of the
termination of entitlement if the enrollee provides notice of loss of
entitlement within 90 days after the date of loss and pays the
prepaid or periodic charge attributable to the period, effective as
of the date of termination of entitlement. Upon receipt of timely
notice, the issuer shall return directly to the enrollee that portion
of the prepaid or periodic charge attributable to the period the
enrollee was entitled to medical assistance, subject to adjustment
for paid claims.
(ii) A Medicare supplement contract shall provide that benefits
and premiums under the contract shall be suspended at the request of
the enrollee or subscriber for any period that may be provided by
federal regulation if the enrollee or subscriber is entitled to
benefits under Section 226(b) of the Social Security Act and is
covered under a group health plan, as defined in Section 1862(b)(1)
(A)(v) of the Social Security Act. If suspension occurs and the
enrollee or subscriber loses coverage under the group health plan,
the contract shall be automatically reinstituted, effective as of the
date of loss of coverage if the enrollee or subscriber provides
notice within 90 days of the date of the loss of coverage.
(B) Reinstitution of coverages:
(i) Shall not provide for any waiting period with respect to
treatment of preexisting conditions.
(ii) Shall provide for resumption of coverage that is
substantially equivalent to coverage in effect before the date of
suspension. If the suspended Medicare supplement contract provided
coverage for outpatient prescription drugs, reinstitution of the
contract for a Medicare Part D enrollee shall not include coverage
for outpatient prescription drugs but shall otherwise provide
coverage that is substantially equivalent to the coverage in effect
before the date of suspension.
(iii) Shall provide for classification of prepaid or periodic
charges on terms at least as favorable to the enrollee as the prepaid
or periodic charge classification terms that would have applied to
the enrollee had the coverage not been suspended.
(8) If an issuer makes a written offer to the Medicare supplement
enrollee or subscriber of one or more of its plan contracts, to
exchange during a specified period from his or her 1990 standardized
plan, as described in Section 1358.9, to a 2010 standardized plan, as
described in Section 1358.91, the offer and subsequent exchange
shall comply with the following requirements:
(A) An issuer need not provide justification to the director if
the enrollee or subscriber replaces a 1990 standardized plan contract
with an issue age rated 2010 standardized plan contract at the
enrollee or subscriber's original issue age and duration. If an
enrollee or subscriber's plan contract to be replaced is priced on an
issue age rate schedule at the time of that offer, the rate charged
to the enrollee or subscriber for the new exchanged plan shall
recognize the plan contract reserve buildup, due to the prefunding
inherent in the use of an issue age rate basis, for the benefit of
the enrollee or subscriber. The method proposed to be used by an
issuer shall be filed with the director.
(B) The rating class of the new plan contract shall be the class
closest to the enrollee or subscriber's class of the replaced
coverage.
(C) An issuer may not apply new preexisting condition limitations
or a new incontestability period to the new plan contract for those
benefits contained in the exchanged 1990 standardized plan contract
of the enrollee or subscriber, but may apply preexisting condition
limitations of no more than six months to any added benefits
contained in the new 2010 standardized plan contract not contained in
the exchanged plan contract. This subparagraph shall not apply to an
applicant who is guaranteed issue under Section 1358.11 or 1358.12.
(D) The new plan contract shall be offered to all enrollees or
subscribers within a given plan, except where the offer or issue
would be in violation of state or federal law.
(9) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(10) A Medicare supplement contract shall provide an examination
period of 30 days after the receipt of the contract by the applicant
for purposes of review, during which time the applicant may return
the contract as described in subdivision (e) of Section 1358.17.
(11) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(12) Within 30 days prior to the effective date of any Medicare
benefit changes, an issuer shall file with the director, and notify
its subscribers and enrollees of, modifications it has made to
Medicare supplement contracts.
(A) The notice shall include a description of revisions to the
Medicare Program and a description of each modification made to the
coverage provided under the Medicare supplement contract.
(B) The notice shall inform each subscriber and enrollee as to
when any adjustment in the prepaid or periodic charges will be made
due to changes in Medicare benefits.
(C) The notice of benefit modifications and any adjustments to the
prepaid or periodic charges shall be in outline form and in clear
and simple terms so as to facilitate comprehension. The notice shall
not contain or be accompanied by any solicitation.
(13) No modifications to existing Medicare supplement coverage
shall be made at the time of, or in connection with, the notice
requirements of this article except to the extent necessary to
eliminate duplication of Medicare benefits and any modifications
necessary under the contract to provide indexed benefit adjustment.
(b) With respect to the standards for basic (core) benefits for
benefit plans A to J, inclusive, every issuer shall make available a
contract including only the following basic "core" package of
benefits to each prospective applicant. This "core" package of
benefits shall be referred to as standardized Medicare supplement
benefit plan "A". An issuer may make available to prospective
applicants any of the other Medicare supplement benefit plans in
addition to the basic core package, but not in lieu of that package.
(1) Coverage of Part A Medicare eligible expenses for
hospitalization to the extent not covered by Medicare from the 61st
day to the 90th day, inclusive, in any Medicare benefit period.
(2) Coverage of Part A Medicare eligible expenses incurred for
hospitalization to the extent not covered by Medicare for each
Medicare lifetime inpatient reserve day used.
(3) Upon exhaustion of the Medicare hospital inpatient coverage
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment as payment in full and may not bill the enrollee or
subscriber for any balance.
(4) Coverage under Medicare Parts A and B for the reasonable cost
of the first three pints of blood, or equivalent quantities of packed
red blood cells, as defined under federal regulations, unless
replaced in accordance with federal regulations.
(5) Coverage for the coinsurance amount, or in the case of
hospital outpatient services, the copayment amount, of Medicare
eligible expenses under Part B regardless of hospital confinement,
subject to the Medicare Part B deductible.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B to J, inclusive, only as provided
by Section 1358.9.
(1) With respect to the Medicare Part A deductible, coverage for
all of the Medicare Part A inpatient hospital deductible amount per
benefit period.
(2) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(3) With respect to the Medicare Part B deductible, coverage for
all of the Medicare Part B deductible amount per calendar year
regardless of hospital confinement.
(4) With respect to 80 percent of the Medicare Part B excess
charges, coverage for 80 percent of the difference between the actual
Medicare Part B charge as billed, not to exceed any charge
limitation established by the Medicare Program or state law, and the
Medicare-approved Part B charge.
(5) With respect to 100 percent of the Medicare Part B excess
charges, coverage for all of the difference between the actual
Medicare Part B charge as billed, not to exceed any charge limitation
established by the Medicare Program or state law, and the
Medicare-approved Part B charge.
(6) With respect to the basic outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two-hundred-fifty-dollar ($250) calendar year
deductible, to a maximum of one thousand two hundred fifty dollars
($1,250) in benefits received by the insured per calendar year, to
the extent not covered by Medicare. On and after January 1, 2006, no
Medicare supplement contract may be sold or issued if it includes a
prescription drug benefit.
(7) With respect to the extended outpatient prescription drug
benefit, coverage for 50 percent of outpatient prescription drug
charges, after a two-hundred-fifty-dollar ($250) calendar year
deductible, to a maximum of three thousand dollars ($3,000) in
benefits received by the insured per calendar year, to the extent not
covered by Medicare. On and after January 1, 2006, no Medicare
supplement contract may be sold or issued if it includes a
prescription drug benefit.
(8) With respect to medically necessary emergency care in a
foreign country, coverage to the extent not covered by Medicare for
80 percent of the billed charges for Medicare-eligible expenses for
medically necessary emergency hospital, physician, and medical care
received in a foreign country, which care would have been covered by
Medicare if provided in the United States and which care began during
the first 60 consecutive days of each trip outside the United
States, subject to a calendar year deductible of two hundred fifty
dollars ($250), and a lifetime maximum benefit of fifty thousand
dollars ($50,000). For purposes of this benefit, "emergency care"
shall mean care needed immediately because of an injury or an illness
of sudden and unexpected onset.
(9) With respect to the preventive medical care benefit, coverage
for the following preventive health services:
(A) An annual clinical preventive medical history and physical
examination that may include tests and services from subparagraph (B)
and patient education to address preventive health care measures.
(B) The following screening tests or preventive services that are
not covered by Medicare, the selection and frequency of which are
determined to be medically appropriate by the attending physician:
(i) Fecal occult blood test.
(ii) Mammogram.
(C) Influenza vaccine administered at any appropriate time during
the year.
Reimbursement shall be for the actual charges up to 100 percent of
the Medicare-approved amount for each service, as if Medicare were
to cover the service as identified in American Medical Association
Current Procedural Terminology (AMACPT) codes, to a maximum of one
hundred twenty dollars ($120) annually under this benefit. This
benefit shall not include payment for any procedure covered by
Medicare.
(10) With respect to the at-home recovery benefit, coverage for
services to provide short-term, at-home assistance with activities of
daily living for those recovering from an illness, injury, or
surgery.
(A) For purposes of this benefit, the following definitions shall
apply:
(i) "Activities of daily living" include, but are not limited to,
bathing, dressing, personal hygiene, transferring, eating,
ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings.
(ii) "Care provider" means a duly qualified or licensed home
health aide or homemaker, or a personal care aide or nurse provided
through a licensed home health care agency or referred by a licensed
referral agency or licensed nurses registry.
(iii) "Home" shall mean any place used by the insured as a place
of residence, provided that the place would qualify as a residence
for home health care services covered by Medicare. A hospital or
skilled nursing facility shall not be considered the insured's place
of residence.
(iv) "At-home recovery visit" means the period of a visit required
to provide at-home recovery care, without any limit on the duration
of the visit, except that each consecutive four hours in a 24-hour
period of services provided by a care provider is one visit.
(B) With respect to coverage requirements and limitations, the
following shall apply:
(i) At-home recovery services provided shall be primarily services
that assist in activities of daily living.
(ii) The covered person's attending physician shall certify that
the specific type and frequency of at-home recovery services are
necessary because of a condition for which a home care plan of
treatment was approved by Medicare.
(iii) Coverage is limited to the following:
(I) No more than the number and type of at-home recovery visits
certified as necessary by the covered person's attending physician.
The total number of at-home recovery visits shall not exceed the
number of Medicare-approved home health care visits under a
Medicare-approved home care plan of treatment.
(II) The actual charges for each visit up to a maximum
reimbursement of forty dollars ($40) per visit.
(III) One thousand six hundred dollars ($1,600) per calendar year.
(IV) Seven visits in any one week.
(V) Care furnished on a visiting basis in the insured's home.
(VI) Services provided by a care provider as defined in
subparagraph (A).
(VII) At-home recovery visits while the covered person is covered
under the contract and not otherwise excluded.
(VIII) At-home recovery visits received during the period the
covered person is receiving Medicare-approved home care services or
no more than eight weeks after the service date of the last
Medicare-approved home health care visit.
(C) Coverage is excluded for the following:
(i) Home care visits paid for by Medicare or other government
programs.
(ii) Care provided by family members, unpaid volunteers, or
providers who are not care providers.
(d) The standardized Medicare supplement benefit plan "K" shall
consist of the following benefits:
(1) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each day used from the 61st to the 90th day,
inclusive, in any Medicare benefit period.
(2) Coverage of 100 percent of the Medicare Part A hospital
coinsurance amount for each Medicare lifetime inpatient reserve day
used from the 91st to the 150th day, inclusive, in any Medicare
benefit period.
(3) Upon exhaustion of the Medicare hospital inpatient coverage,
including the lifetime reserve days, coverage of 100 percent of the
Medicare Part A eligible expenses for hospitalization paid at the
applicable prospective payment system rate, or other appropriate
Medicare standard of payment, subject to a lifetime maximum benefit
of an additional 365 days. The provider shall accept the issuer's
payment for this benefit as payment in full and shall not bill the
enrollee or subscriber for any balance.
(4) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (10) is met.
(5) With respect to skilled nursing facility care, coverage for 50
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (10)
is met.
(6) With respect to hospice care, coverage for 50 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (10) is
met.
(7) Coverage for 50 percent, under Medicare Part A or B, of the
reasonable cost of the first three pints of blood or equivalent
quantities of packed red blood cells, as defined under federal
regulations, unless replaced in accordance with federal regulations,
until the out-of-pocket limitation described in paragraph (10) is
met.
(8) Except for coverage provided in paragraph (9), coverage for 50
percent of the cost sharing otherwise applicable under Medicare Part
B after the enrollee or subscriber pays the Part B deductible, until
the out-of-pocket limitation is met as described in paragraph (10).
(9) Coverage of 100 percent of the cost sharing for Medicare Part
B preventive services, after the enrollee or subscriber pays the
Medicare Part B deductible.
(10) Coverage of 100 percent of all cost sharing under Medicare
Parts A and B for the balance of the calendar year after the
individual has reached the out-of-pocket limitation on annual
expenditures under Medicare Parts A and B of four thousand dollars
($4,000) in 2006, indexed each year by the appropriate inflation
adjustment specified by the secretary.
(e) The standardized Medicare supplement benefit plan "L" shall
consist of the following benefits:
(1) The benefits described in paragraphs (1), (2), (3), and (9) of
subdivision (d).
(2) With respect to the Medicare Part A deductible, coverage for
75 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period until the out-of-pocket limitation
described in paragraph (8) is met.
(3) With respect to skilled nursing facility care, coverage for 75
percent of the coinsurance amount for each day used from the 21st
day to the 100th day, inclusive, in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A until the out-of-pocket limitation described in paragraph (8)
is met.
(4) With respect to hospice care, coverage for 75 percent of cost
sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation described in paragraph (8) is met.
(5) Coverage for 75 percent, under Medicare Part A or B, of the
reasonable cost of the first three pints of blood or equivalent
quantities of packed red blood cells, as defined under federal
regulations, unless replaced in accordance with federal regulations,
until the out-of-pocket limitation described in paragraph (8) is met.
(6) Except for coverage provided in paragraph (7), coverage for 75
percent of the cost sharing otherwise applicable under Medicare Part
B after the enrollee or subscriber pays the Part B deductible until
the out-of-pocket limitation described in paragraph (8) is met.
(7) Coverage for 100 percent of the cost sharing for Medicare Part
B preventive services after the enrollee or subscriber pays the Part
B deductible.
(8) Coverage of 100 percent of the cost sharing for Medicare Parts
A and B for the balance of the calendar year after the individual
has reached the out-of-pocket limitation on annual expenditures under
Medicare Parts A and B of two thousand dollars ($2,000) in 2006,
indexed each year by the appropriate inflation adjustment specified
by the secretary.
(f) A contract shall not contain any provision delaying the
effective date of coverage beyond the first day of the month
following the date of receipt by the issuer of the applicant's
properly completed application, except that the effective date of
coverage may be delayed until the 65th birthday of an applicant who
is to become eligible for Medicare by reason of age if the
application is received any time during the three months immediately
preceding the applicant's 65th birthday.