S3290.02T

To repeal sections 376.854, 376.859, 376.864, 376.869, 376.879 and 376.886, RSMo 1994, relating to medicare supplement insurance, and to enact in lieu thereof six new sections relating to the same subject, with an emergency clause.

Be it enacted by the General Assembly of the State of Missouri, as follows:

Section A. Sections 376.854, 376.859, 376.864, 376.869, 376.879 and 376.886, RSMo 1994, are repealed and six new sections enacted in lieu thereof to be known as sections 376.854, 376.859, 376.864, 376.869, 376.879 and 376.886, to read as follows:

376.854. As used in sections 376.850 to 376.890, the following terms mean:

(1) "Applicant":

(a) In the case of an individual medicare supplement policy, the person who seeks to contract for insurance benefits; and

(b) In the case of a group medicare supplement policy, the proposed certificate holder;

(2) "Certificate", any certificate delivered or issued for delivery in this state under a group medicare supplement policy;

(3) "Certificate form", the form on which the certificate is delivered or issued for delivery by the [insurer] issuer;

(4) "Director", the director of the department of insurance;

(5) "Issuer" includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state medicare supplement policies or certificates;

(6) "Medicare", the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended;

(7) "Medicare supplement policy", a group or individual policy of insurance or a subscriber contract, other than a policy issued pursuant to a contract under section 1876 [or section 1833] of the federal Social Security Act, 42 U.S.C. section 1395, et seq., or an issued policy under a demonstration project [authorized pursuant to amendments to the federal Social Security Act] specified in 42 U.S.C. section 1395ss(g)(1), which is advertised, marketed or designed primarily as a supplement to reimbursements under medicare for the hospital, medical or surgical expenses of persons eligible for medicare;

(8) "Policy form", the form on which the policy is delivered or issued for delivery by the issuer.

376.859. 1. Except as otherwise specifically provided, sections 376.850 to 376.890 shall apply to:

(1) All medicare supplement policies delivered or issued for delivery in this state on or after August 28, 1992; and

(2) All certificates issued under group medicare supplement policies, [which] when certificates have been delivered or issued for delivery in this state.

2. Medicare supplement policies do not include a policy of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof or for members or former members, or a combination thereof, of the labor organizations.

3. The provisions of sections 376.850 to 376.890 are not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to medicare eligible persons [which] when policies are not marketed or held to be medicare supplement policies or benefit plans.

376.864. 1. No medicare supplement policy or certificate in force in the state shall contain benefits that duplicate benefits provided by medicare.

2. Notwithstanding any other provision of law to the contrary, a medicare supplement policy or certificate 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 policy or certificate [may] 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.

3. The director shall adopt reasonable regulations to establish specific standards for policy provisions of medicare supplement policies and certificates. Such standards shall be in addition to and in accordance with applicable laws of this state, including sections 376.770 to 376.800. No requirement of the insurance laws relating to minimum required policy benefits, other than the minimum standards contained in sections 376.850 to 376.890, shall apply to medicare supplement policies and certificates. The standards may cover, but not be limited to:

(1) Terms of renewability;

(2) Initial and subsequent conditions of eligibility;

(3) Nonduplication of coverage;

(4) Probationary periods;

(5) Benefit limitations, exceptions and reductions;

(6) Elimination periods;

(7) Requirements for replacement;

(8) Recurrent conditions; and

(9) Definitions of terms.

4. The director may adopt from time to time such reasonable regulations as are necessary to conform medicare supplement policies and certificates to the requirements of federal law and regulations promulgated thereunder, including but not limited to:

(1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements;

(2) Establishing a uniform methodology for calculating and reporting loss ratios;

(3) Assuring public access to policies, premiums and loss ratio information of issuers of medicare supplement insurance;

(4) Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases;

(5) Establishing a policy for holding public hearings prior to approval of premium increases; and

(6) Establishing standards for medicare select policies and certificates.

5. The director may adopt reasonable regulations that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the director, are unjust, unfair or unfairly discriminatory to any person insured or proposed to be insured under a medicare supplement policy or certificate.

376.869. The director shall adopt reasonable regulations to establish minimum standards for benefits, claims payment, marketing practices, compensation arrangements and reporting practices for medicare supplement policies.

376.879. 1. In order to provide for full and fair disclosure in the sale of medicare supplement policies, no medicare supplement policy or certificate shall be delivered in this state unless an outline of coverage is delivered to the applicant at the time application is made.

2. The director shall prescribe the format and content of the outline of coverage required by subsection 1 of this section. For purposes of this section, "format" means style, arrangements and overall appearance, including such items as the size, color and prominence of type and arrangement of text and captions. Such outline of coverage shall include:

(1) A description of the principal benefits and coverage provided in the policy;

(2) A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums; and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age;

(3) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.

3. The director may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of medicare. Except in the case of direct response insurance policies, the director may require by regulation that the information brochure be provided to any prospective insureds eligible for medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the director may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for medicare, but in no event later than the time of policy delivery.

4. The director may adopt regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for medicare [by reason of age], other than:

(1) Medicare supplement policies;

(2) Disability income policies[;

(3) Basic, catastrophic or major medical expense policies; or

(4) Single premium, nonrenewable policies].

5. The director may adopt reasonable regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for medicare.

376.886. Regulations adopted pursuant to sections 376.850 to 376.890 shall be subject to the provisions of section 376.982, [and] section 536.021 and section 536.024, RSMo. Any regulation adopted pursuant to sections 376.850 to 376.890 shall contain all of[, but no provision other than,] the provisions of the model regulation or regulations relating to medicare supplement policies adopted by the National Association of Insurance Commissioners.

Section B. Because immediate action is necessary to prevent the state's authority to regulate medicare supplemental policies from reverting to the federal government due to noncompliance with the provisions of the Omnibus Reconciliation Act of 1990, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.