Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 129-S.F.No. 328 
           An act relating to insurance; Medicare supplement; 
          specifying policy requirements; allowing certain 
          foreign travel coverages to be added as a rider to the 
          basic plan; amending Minnesota Statutes 1990, sections 
          62A.31, subdivision 1; 62A.316; 62A.36, subdivision 
          1a; and 62A.43, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1990, section 62A.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
group policy, certificate, subscriber contract or other evidence 
of accident and health insurance the effect or purpose of which 
is to supplement Medicare coverage issued or delivered in this 
state or offered to a resident of this state shall be sold or 
issued to an individual age 65 or older covered by Medicare 
unless the following requirements are met:  
    (a) The policy must provide a minimum of the coverage set 
out in subdivision 2; 
    (b) The policy must cover preexisting conditions during the 
first six months of coverage if the insured was not diagnosed or 
treated for the particular condition during the 90 days 
immediately preceding the effective date of coverage; 
    (c) The policy must contain a provision that the plan will 
not be canceled or nonrenewed on the grounds of the 
deterioration of health of the insured; 
    (d) Before the policy is sold or issued, an offer of both 
categories of Medicare supplement insurance has been made to the 
individual, together with an explanation of both coverages; and 
    (e) An outline of coverage as provided in section 62A.39 
must be delivered at the time of application and prior to 
payment of any premium.; 
    (f) (1) The policy must provide that benefits and premiums 
under the policy shall be suspended at the request of the 
policyholder for the period, not to exceed 24 months, in which 
the policyholder has applied for and is determined to be 
entitled to medical assistance under title XIX of the Social 
Security Act, but only if the policyholder notifies the issuer 
of the policy within 90 days after the date the individual 
becomes entitled to this assistance; 
    (2) If suspension occurs and if the policyholder or 
certificate holder loses entitlement to this medical assistance, 
the policy shall be automatically reinstated, effective as of 
the date of termination of this entitlement, if the policyholder 
provides notice of loss of the entitlement within 90 days after 
the date of the loss; 
    (3) The policy must provide that upon reinstatement (i) 
there is no additional waiting period with respect to treatment 
of preexisting conditions, (ii) coverage is provided which is 
substantially equivalent to coverage in effect before the date 
of the suspension, and (iii) premiums are classified on terms 
that are at least as favorable to the policyholder or 
certificate holder as the premium classification terms that 
would have applied to the policyholder or certificate holder had 
coverage not been suspended; 
    (g) The written statement required by an application for 
Medicare supplement insurance pursuant to section 62A.43, 
subdivision 1, shall be made on a form, approved by the 
commissioner, that states that counseling services may be 
available in the state to provide advice concerning the purchase 
of Medicare supplement policies and enrollment under the 
Medicaid program; 
    (h) No issuer of Medicare supplement policies in this state 
may impose preexisting condition limitations or otherwise deny 
or condition the issuance or effectiveness of any Medicare 
supplement insurance policy form available for sale in this 
state, nor may it discriminate in the pricing of such a policy, 
because of the health status, claims experience, receipt of 
health care, or medical condition of an applicant where an 
application for such insurance is submitted during the six-month 
period beginning with the first month in which an individual 
first enrolled for benefits under Medicare Part B; 
    (i) If a Medicare supplement policy replaces another 
Medicare supplement policy, the issuer of the replacing policy 
shall waive any time periods applicable to preexisting 
conditions, waiting periods, elimination periods, and 
probationary periods in the new Medicare supplement policy for 
similar benefits to the extent the time was spent under the 
original policy; 
    (j) The policy has been filed with and approved by the 
department as meeting all the requirements of sections 62A.31 to 
62A.44; and 
    (k) the policy guarantees renewability.  
    Only the following standards for renewability may be used 
in Medicare supplement insurance policy forms. 
    No issuer of Medicare supplement insurance policies may 
cancel or nonrenew a Medicare supplement policy or certificate 
for any reason other than nonpayment of premium or material 
misrepresentation.  
    If a group Medicare supplement insurance policy is 
terminated by the group policyholder and is not replaced as 
provided in this clause, the issuer shall offer certificate 
holders an individual Medicare supplement policy which, at the 
option of the certificate holder, provides for continuation of 
the benefits contained in the group policy; or provides for such 
benefits and benefit packages as otherwise meet the requirements 
of this clause.  
    If an individual is a certificate holder in a group 
Medicare supplement insurance policy and the individual 
terminates membership in the group, the issuer of the policy 
shall offer the certificate holder the conversion opportunities 
described in this clause; or offer the certificate holder 
continuation of coverage under the group policy. 
    Sec. 2.  Minnesota Statutes 1990, section 62A.316, is 
amended to read: 
    62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
    (a) The basic Medicare supplement plan must have a level of 
coverage that will provide: 
    (1) coverage for all of the Medicare part A inpatient 
hospital coinsurance amounts, and 100 percent of all Medicare 
part A eligible expenses for hospitalization not covered by 
Medicare for the calendar year, after satisfying the Medicare 
part A deductible; 
    (2) coverage for the daily copayment amount of Medicare 
part A eligible expenses for the calendar year incurred for 
skilled nursing facility care; 
    (3) coverage for the 20 percent copayment amount of 
Medicare eligible expenses excluding outpatient prescription 
drugs under Medicare part B regardless of hospital confinement 
for Medicare part B after the Medicare deductible amount; 
    (4) 80 percent of the usual and customary hospital and 
medical expenses and supplies incurred during travel outside the 
United States as a result of a medical emergency; 
    (5) coverage for the reasonable cost of the first three 
pints of blood, or equivalent quantities of packed red blood 
cells as defined under federal regulations under Medicare parts 
A and B, unless replaced in accordance with federal regulations; 
and 
    (5) (6) 100 percent of the cost of immunizations.  
    (b) Only the following optional benefit riders may be added 
to this plan: 
    (1) coverage for all of the Medicare part A inpatient 
hospital deductible amount; 
    (2) a minimum of 80 percent of usual and customary eligible 
medical expenses and supplies not covered by Medicare part B.  
This does not include outpatient prescription drugs; 
    (3) coverage for all of the Medicare part B annual 
deductible; and 
    (4) coverage for at least 50 percent, or the equivalent of 
50 percent, of usual and customary prescription drug expenses. 
    Nothing in this section prohibits the plan from requiring 
that services be received from providers designated as preferred 
providers or participating providers in order to receive 
coverage under optional benefit riders. 
    Sec. 3.  Minnesota Statutes 1990, section 62A.36, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [SUPPLEMENT TO ANNUAL STATEMENTS.] Each insurer 
that has Medicare supplement policies in force in this state 
shall, as a supplement to the annual statement required by 
section 60A.13, submit, in a form prescribed by the 
commissioner, data showing its incurred claims experience, its 
earned premiums, and the aggregate amount of premiums collected 
and losses incurred for each Medicare policy form in force.  If 
the data submitted does not confirm that the insurer has 
satisfied the loss ratio requirements of this section, the 
commissioner shall notify the insurer in writing of the 
deficiency.  The insurer shall have 30 days from the date of the 
commissioner's notice to file amended rates that comply with 
this section.  If the insurer fails to file amended rates within 
the prescribed time, the commissioner shall order that the 
insurer's filed rates for the nonconforming policy be reduced to 
an amount that would have resulted in a loss ratio that complied 
with this section had it been in effect for the reporting period 
of the supplement.  The insurer's failure to file amended rates 
within the specified time or the issuance of the commissioner's 
order amending the rates does not preclude the insurer from 
filing an amendment of its rates at a later time.  The 
commissioner shall annually make the submitted data as to 
premiums and loss ratios for the preceding three years available 
to the public at a cost not to exceed the cost of copying.  The 
commissioner shall also provide the public with copies of the 
policies to which the loss ratios and premiums apply.  The data 
must be compiled in a form useful for consumers who wish to 
compare premium charges and loss ratios. 
    Sec. 4.  Minnesota Statutes 1990, section 62A.43, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DUPLICATE COVERAGE PROHIBITED.] No agent 
shall sell a Medicare supplement plan, as defined in section 
62A.31, to a person who currently has one plan in effect; 
however, an agent may sell a replacement plan in accordance with 
section 62A.40, provided that the second plan is not made 
effective any sooner than necessary to provide continuous 
benefits for preexisting conditions.  Every application for 
Medicare supplement insurance shall require a written statement 
signed by the applicant listing of all health and accident 
insurance maintained by the applicant as of the date the 
application is taken and stating whether the applicant is 
entitled to any medical assistance.  The written statement must 
be accompanied by a written acknowledgment, signed by the seller 
of the policy, of the request for and receipt of the statement.  
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 4 are effective November 5, 1991.  If the 
federal government extends the date for compliance with any 
provision of this act that is required by the federal Omnibus 
Budget Reconciliation Act of 1990, the commissioner may by order 
extend the date by which that provision of this act must be 
complied with.  An order of the commissioner under this section 
must not extend the compliance date for longer than six months 
from November 5, 1991. 
    Presented to the governor May 17, 1991 
    Signed by the governor May 21, 1991, 1:24 p.m.