Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                        CHAPTER 330-H.F.No. 639 
           An act relating to insurance; Medicare supplement; 
          regulating coverages; conforming state law to federal 
          requirements; making technical changes; amending 
          Minnesota Statutes 1992, sections 62A.31, subdivisions 
          1, 4, and by adding a subdivision; 62A.315; 62A.316; 
          62A.318; 62A.36, subdivision 1; 62A.39; 62A.436; and 
          62A.44, subdivision 2; Laws 1992, chapter 554, article 
          1, section 18. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 62A.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
group policy, certificate, subscriber contract issued by a 
health service plan corporation regulated under chapter 62C, 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 covered by Medicare 
unless the following requirements in subdivisions 1a to 1s are 
met:.  
   (a) Subd. 1a.  [MINIMUM COVERAGE.] The policy must provide 
a minimum of the coverage set out in subdivision 2 and section 
62E.07. 
   (b) Subd. 1b.  [PREEXISTING CONDITION COVERAGE.] 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) Subd. 1c.  [LIMITATION ON CANCELLATION OR NONRENEWAL.] 
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) Subd. 1d.  [MANDATORY OFFER.] Before the policy is sold 
or issued, an offer of both categories of Medicare supplement 
insurance has been must be made to the individual, together with 
an explanation of both coverages. 
    (e) Subd. 1e.  [DELIVERY OF OUTLINE OF COVERAGE.] 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 and, except for direct response policies, an 
acknowledgment of receipt of this outline must be obtained from 
the applicant. 
    (f)(1) Subd. 1f.  [SUSPENSION BASED ON ENTITLEMENT TO 
MEDICAL ASSISTANCE.] (a) 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) (b) 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) (c) the policy must provide that upon reinstatement 
(i) (1) there is no additional waiting period with respect to 
treatment of preexisting conditions, (ii) (2) coverage is 
provided which is substantially equivalent to coverage in effect 
before the date of the suspension, and (iii) (3) 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) Subd. 1g.  [NOTIFICATION OF COUNSELING SERVICES.] 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) Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND 
PRICING OF COVERAGE.] No issuer of Medicare supplement policies, 
including policies that supplement Medicare issued by health 
maintenance organizations or those policies governed by section 
1833 or 1876 of the federal Social Security Act, United States 
Code, title 42, section 1395, et seq., 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) Subd. 1i.  [REPLACEMENT COVERAGE.] 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 benefits to the extent the time 
was spent under the original policy. 
    (j) Subd. 1j.  [FILING AND APPROVAL.] The policy has must 
have been filed with and approved by the department as meeting 
all the requirements of sections 62A.31 to 62A.44. 
    (k) Subd. 1k.  [GUARANTEED RENEWABILITY.] The policy 
guarantees must guarantee 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. 
    (l) Subd. 1l.  [TREATMENT OF SICKNESS AND ACCIDENT LOSSES.] 
A Medicare supplement policy or certificate shall not indemnify 
against losses resulting from sickness on a different basis than 
losses resulting from accidents. 
    (m) Subd. 1m.  [MEDICARE COST SHARING COVERAGE CHANGES.] A 
Medicare supplement policy or certificate 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 amount and copayment 
percentage factors.  Premiums may be modified to correspond with 
the changes. 
    As soon as practicable, but no later than 30 days prior to 
the annual effective date of any Medicare benefit changes, an 
issuer shall notify its policyholders and certificate holders of 
modifications it has made to Medicare supplement insurance 
policies or certificates in a format acceptable to the 
commissioner.  Such notice shall: 
    (1) include a description of revisions to the Medicare 
program and a description of each modification made to the 
coverage provided under the Medicare supplement policy or 
certificate; and 
    (2) inform each policyholder or certificate holder as to 
when any premium adjustment is to be made, due to changes in 
Medicare. 
    The notice of benefit modifications and any premium 
adjustments must be in outline form and in clear and simple 
terms so as to facilitate comprehension. 
    The notices must not contain or be accompanied by any 
solicitation. 
    (n) Subd. 1n.  [TERMINATION OF COVERAGE.] Termination by an 
issuer of a Medicare supplement policy or certificate shall be 
without prejudice to any continuous loss that began while the 
policy or certificate was in force, but the extension of 
benefits beyond the period during which the policy or 
certificate was in force may be conditioned on the continuous 
total disability of the insured, limited to the duration of the 
policy or certificate benefit period, if any, or payment of the 
maximum benefits.  The extension of benefits does not apply when 
the termination is based on fraud, misrepresentation, or 
nonpayment of premium.  An issuer may discontinue the 
availability of a policy form or certificate form if the issuer 
provides to the commissioner in writing its decision at least 30 
days before discontinuing the availability of the form of the 
policy or certificate.  An issuer that discontinues the 
availability of a policy form or certificate shall not file for 
approval a new policy form or certificate form of the same type 
for the same Medicare supplement benefit plan as the 
discontinued form for five years after the issuer provides 
notice to the commissioner of the discontinuance.  The period of 
discontinuance may be reduced if the commissioner determines 
that a shorter period is appropriate.  The sale or other 
transfer of Medicare supplement business to another issuer shall 
be considered a discontinuance for the purposes of this 
section.  A change in the rating structure or methodology shall 
be considered a discontinuance under this section unless the 
issuer complies with the following requirements: 
    (1) the issuer provides an actuarial memorandum, in a form 
and manner prescribed by the commissioner, describing the manner 
in which the revised rating methodology and resulting rates 
differ from the existing rating methodology and resulting rates; 
and 
    (2) the issuer does not subsequently put into effect a 
change of rates or rating factors that would cause the 
percentage differential between the discontinued and subsequent 
rates as described in the actuarial memorandum to change.  The 
commissioner may approve a change to the differential that is in 
the public interest. 
    (o)(1) Subd. 1o.  [REFUND OR CREDIT CALCULATION.] (a) 
Except as provided in clause (2) paragraph (b), the Minnesota 
experience of all policy forms or certificate forms of the same 
type in a standard Medicare supplement benefit plan shall be 
combined for purposes of the refund or credit calculation 
prescribed in section 62A.36;. 
    (2)(b) Forms assumed under an assumption reinsurance 
agreement shall not be combined with the Minnesota experience of 
other forms for purposes of the refund or credit calculation. 
    (p) Subd. 1p.  [RENEWAL OR CONTINUATION PROVISIONS.] 
Medicare supplement policies and certificates shall include a 
renewal or continuation provision.  The language or 
specifications of the provision shall be consistent with the 
type of contract issued.  The provision shall be appropriately 
captioned and shall appear on the first page of the policy or 
certificate, and shall include any reservation by the issuer of 
the right to change premiums and any automatic renewal premium 
increases based on the policyholder's age.  Except for riders or 
endorsements by which the issuer effectuates a request made in 
writing by the insured, exercises a specifically reserved right 
under a Medicare supplement policy or certificate, or is 
required to reduce or eliminate benefits to avoid duplication of 
Medicare benefits, all riders or endorsements added to a 
Medicare supplement policy or certificate after the date of 
issue or at reinstatement or renewal that reduce or eliminate 
benefits or coverage in the policy or certificate shall require 
a signed acceptance by the insured.  After the date of policy or 
certificate issue, a rider or endorsement that increases 
benefits or coverage with a concomitant increase in premium 
during the policy or certificate term shall be agreed to in 
writing and signed by the insured, unless the benefits are 
required by the minimum standards for Medicare supplement 
policies or if the increased benefits or coverage is required by 
law.  Where a separate additional premium is charged for 
benefits provided in connection with riders or endorsements, the 
premium charge shall be set forth in the policy, declaration 
page, or certificate.  If a Medicare supplement policy or 
certificate contains limitations with respect to preexisting 
conditions, the limitations shall appear as a separate paragraph 
of the policy or certificate and be labeled as "preexisting 
condition limitations." 
     Issuers of accident and sickness policies or certificates 
that provide hospital or medical expense coverage on an expense 
incurred or indemnity basis, other than incidentally, to a 
person eligible for Medicare by reason of age shall provide to 
such applicants a Medicare Supplement Buyer's Guide in the form 
developed by the Health Care Financing Administration and in a 
type size no smaller than 12-point type.  Delivery of the 
Buyer's Guide must be made whether or not such policies or 
certificates are advertised, solicited, or issued as Medicare 
supplement policies or certificates as defined in this section.  
Except in the case of direct response issuers, delivery of the 
Buyer's Guide must be made to the applicant at the time of 
application, and acknowledgment of receipt of the Buyer's Guide 
must be obtained by the issuer.  Direct response issuers shall 
deliver the Buyer's Guide to the applicant upon request, but no 
later than the time at which the policy is delivered. 
    (q) Subd. 1q.  [MARKETING PROCEDURES.] (1) An issuer, 
directly or through its producers, shall: 
    (i) establish marketing procedures to assure that a 
comparison of policies by its agents or other producers will be 
fair and accurate; 
    (ii) establish marketing procedures to ensure that 
excessive insurance is not sold or issued; 
    (iii) establish marketing procedures that set forth a 
mechanism or formula for determining whether a replacement 
policy or certificate contains benefits clearly and 
substantially greater than the benefits under the replaced 
policy or certificate; 
    (iv) display prominently by type or other appropriate 
means, on the first page of the policy or certificate, the 
following: 
 "Notice to buyer:  This policy or certificate may not cover 
all of your medical expenses"; 
    (v) inquire and otherwise make every reasonable effort to 
identify whether a prospective applicant or enrollee for 
Medicare supplement insurance already has accident and sickness 
insurance and the types and amounts of the insurance; 
    (vi) establish auditable procedures for verifying 
compliance with this paragraph subdivision; 
    (2) in addition to the practices prohibited in chapter 72A, 
the following acts and practices are prohibited: 
    (i) knowingly making any misleading representation or 
incomplete or fraudulent comparison of any insurance policies or 
issuers for the purpose of inducing, or tending to induce, any 
person to lapse, forfeit, surrender, terminate, retain, pledge, 
assign, borrow on, or convert any insurance policy or to take 
out a policy of insurance with another insurer; 
    (ii) employing any method of marketing having the effect of 
or tending to induce the purchase of insurance through force, 
fright, threat, whether explicit or implied, or undue pressure 
to purchase or recommend the purchase of insurance; 
    (iii) making use directly or indirectly of any method of 
marketing which fails to disclose in a conspicuous manner that a 
purpose of the method of marketing is solicitation of insurance 
and that contact will be made by an insurance agent or insurance 
company; 
    (3) the terms "Medicare supplement," "medigap," and words 
of similar import shall not be used unless the policy or 
certificate is issued in compliance with this subdivision. 
    (r) Subd. 1r.  [COMMUNITY RATE.] Each health maintenance 
organization, health service plan corporation, insurer, or 
fraternal benefit society that sells coverage that supplements 
Medicare coverage shall establish a separate community rate for 
that coverage.  Beginning January 1, 1993, no coverage that 
supplements Medicare or that is governed by section 1833 or 1876 
of the federal Social Security Act, United States Code, title 
42, section 1395, et seq., may be offered, issued, sold, or 
renewed to a Minnesota resident, except at the community rate 
required by this paragraph subdivision. 
    For coverage that supplements Medicare and for the Part A 
rate calculation for plans governed by section 1833 of the 
federal Social Security Act, United States Code, title 42, 
section 1395, et seq., the community rate may take into account 
only the following factors: 
    (1) actuarially valid differences in benefit designs or 
provider networks; 
    (2) geographic variations in rates if preapproved by the 
commissioner of commerce; and 
    (3) premium reductions in recognition of healthy lifestyle 
behaviors, including but not limited to, refraining from the use 
of tobacco.  Premium reductions must be actuarially valid and 
must relate only to those healthy lifestyle behaviors that have 
a proven positive impact on health.  Factors used by the health 
carrier making this premium reduction must be filed with and 
approved by the commissioner of commerce. 
    (s) Subd. 1s.  [PRESCRIPTION DRUG COVERAGE.] Beginning 
January 1, 1993, a health maintenance organization that issues 
coverage that supplements Medicare or that issues coverage 
governed by section 1833 or 1876 of the federal Social Security 
Act, United States Code, title 42, section 1395 et seq., must 
offer, to each person to whom it offers any contract described 
in this paragraph subdivision, at least one contract that either:
    (1) covers 80 percent of the reasonable and customary 
charge for prescription drugs or the copayment equivalency; or 
    (2) offers the coverage described in clause (1) as an 
optional rider that may be purchased separately from other 
optional coverages.  
    Subd. 1t.  [NOTICE OF LACK OF DRUG COVERAGE.] Each policy 
or contract issued without prescription drug coverage by any 
insurer, health service plan corporation, health maintenance 
organization, or fraternal benefit society must contain, 
displayed prominently by type or other appropriate means, on the 
first page of the contract, the following: 
    "Notice to buyer:  This contract does not cover 
prescription drugs.  Prescription drugs can be a very high 
percentage of your medical expenses.  Coverage for prescription 
drugs may be available to you.  Please ask for further details." 
    Sec. 2.  Minnesota Statutes 1992, section 62A.31, 
subdivision 4, is amended to read: 
    Subd. 4.  [PROHIBITED POLICY PROVISIONS.] A Medicare 
supplement policy or certificate in force in the state shall not 
contain benefits that duplicate benefits provided by Medicare or 
contain exclusions on coverage that are more restrictive than 
those of Medicare. 
    No Medicare supplement policy or certificate may use 
waivers to exclude, limit, or reduce coverage or benefits for 
specifically named or described preexisting diseases or physical 
conditions, except as permitted under subdivision 1b. 
    Sec. 3.  Minnesota Statutes 1992, section 62A.31, is 
amended by adding a subdivision to read: 
    Subd. 5.  [ADVERTISING.] An issuer shall provide a copy of 
any Medicare supplement advertisement intended for use in this 
state whether through printed or electronic medium to the 
commissioner for review or approval to the extent it may be 
required. 
    Sec. 4.  Minnesota Statutes 1992, section 62A.315, is 
amended to read: 
    62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
COVERAGE.] 
    The extended basic Medicare supplement plan must have a 
level of coverage so that it will be certified as a qualified 
plan pursuant to section 62E.07, and will provide: 
    (1) coverage for all of the Medicare part A inpatient 
hospital deductible and coinsurance amounts, and 100 percent of 
all Medicare part A eligible expenses for hospitalization not 
covered by Medicare for the calendar year; 
    (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, and the Medicare part B and coverage of the Medicare 
deductible amount; 
    (4) 80 percent of usual and customary hospital and medical 
expenses, and supplies, not to exceed any charge limitation 
established by the Medicare program or state law, and 
prescription drug expenses, not covered by Medicare's eligible 
expenses; 
    (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; 
    (6) 100 percent of the cost of immunizations and routine 
screening procedures for cancer, including mammograms and pap 
smears; 
    (7) preventive medical care benefit:  coverage for the 
following preventive health services: 
    (i) an annual clinical preventive medical history and 
physical examination that may include tests and services from 
clause (ii) and patient education to address preventive health 
care measures; 
    (ii) any one or a combination of the following preventive 
screening tests or preventive services, the frequency of which 
is considered medically appropriate: 
    (A) fecal occult blood test and/or digital rectal 
examination; 
    (B) dipstick urinalysis for hematuria, bacteriuria, and 
proteinuria; 
    (C) pure tone (air only) hearing screening test 
administered or ordered by a physician; 
    (D) serum cholesterol screening every five years; 
    (E) thyroid function test; 
    (F) diabetes screening; 
    (iii) any other tests or preventive measures determined 
appropriate by the attending physician.  
    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 (AMA CPT) 
codes to a maximum of $120 annually under this benefit.  This 
benefit shall not include payment for any procedure covered by 
Medicare; 
     (8) 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: 
     (i) for purposes of this benefit, the following definitions 
shall apply: 
     (A) "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; 
     (B) "care provider" means a duly qualified or licensed home 
health aide/homemaker, personal care aide, or nurse provided 
through a licensed home health care agency or referred by a 
licensed referral agency or licensed nurses registry; 
     (C) "home" means a 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; 
     (D) "at-home recovery visit" means the period of a visit 
required to provide at-home recovery care, without limit on the 
duration of the visit, except each consecutive four hours in a 
24-hour period of services provided by a care provider is one 
visit; 
     (ii) coverage requirements and limitations: 
     (A) at-home recovery services provided must be primarily 
services that assist in activities of daily living; 
     (B) the insured's attending physician must 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; 
     (C) coverage is limited to: 
     (I) no more than the number and type of at-home recovery 
visits certified as medically necessary by the insured'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 $40 per visit; 
     (III) $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 
this section; 
     (VII) at-home recovery visits while the insured is covered 
under the policy or certificate and not otherwise excluded; 
     (VIII) at-home recovery visits received during the period 
the insured 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; 
     (iii) coverage is excluded for: 
     (A) home care visits paid for by Medicare or other 
government programs; and 
     (B) care provided by family members, unpaid volunteers, or 
providers who are not care providers. 
    Sec. 5.  Minnesota Statutes 1992, 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, subject to the 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 
    (6) 100 percent of the cost of immunizations and routine 
screening procedures for cancer screening including mammograms 
and pap smears. 
    (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, not to exceed any charge limitation 
established by the Medicare program, and supplies not covered by 
Medicare part B.  This does not include outpatient prescription 
drugs, not to exceed any charge limitation established by the 
Medicare program or state law; 
    (3) coverage for all of the Medicare part B annual 
deductible; 
    (4) coverage for at least 50 percent, or the equivalent of 
50 percent, of usual and customary prescription drug expenses; 
    (5) coverage for the following preventive health services: 
    (i) an annual clinical preventive medical history and 
physical examination that may include tests and services from 
clause (ii) and patient education to address preventive health 
care measures; 
    (ii) any one or a combination of the following preventive 
screening tests or preventive services, the frequency of which 
is considered medically appropriate: 
    (A) fecal occult blood test and/or digital rectal 
examination; 
    (B) dipstick urinalysis for hematuria, bacteriuria, and 
proteinuria; 
     (C) pure tone (air only) hearing screening test, 
administered or ordered by a physician; 
     (D) serum cholesterol screening every five years; 
     (E) thyroid function test; 
     (F) diabetes screening; 
     (iii) any other tests or preventive measures determined 
appropriate by the attending physician. 
     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 (AMA CPT) 
codes, to a maximum of $120 annually under this benefit.  This 
benefit shall not include payment for a procedure covered by 
Medicare; 
     (6) coverage for services to provide short-term at-home 
assistance with activities of daily living for those recovering 
from an illness, injury, or surgery: 
     (i) For purposes of this benefit, the following definitions 
apply: 
     (A) "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; 
     (B) "care provider" means a duly qualified or licensed home 
health aide/homemaker, personal care aid, or nurse provided 
through a licensed home health care agency or referred by a 
licensed referral agency or licensed nurses registry; 
     (C) "home" means a 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; 
     (D) "at-home recovery visit" means the period of a visit 
required to provide at-home recovery care, without limit on the 
duration of the visit, except each consecutive four hours in a 
24-hour period of services provided by a care provider is one 
visit; 
     (ii) Coverage requirements and limitations: 
     (A) at-home recovery services provided must be primarily 
services that assist in activities of daily living; 
     (B) the insured's attending physician must 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; 
     (C) coverage is limited to: 
     (I) no more than the number and type of at-home recovery 
visits certified as necessary by the insured's attending 
physician.  The total number of at-home recovery visits shall 
not exceed the number of Medicare-approved home care visits 
under a Medicare-approved home care plan of treatment; 
     (II) the actual charges for each visit up to a maximum 
reimbursement of $40 per visit; 
     (III) $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 
this section; 
     (VII) at-home recovery visits while the insured is covered 
under the policy or certificate and not otherwise excluded; 
     (VIII) at-home recovery visits received during the period 
the insured 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; 
     (iii) Coverage is excluded for: 
     (A) home care visits paid for by Medicare or other 
government programs; and 
     (B) care provided by family members, unpaid volunteers, or 
providers who are not care providers. 
    Sec. 6.  Minnesota Statutes 1992, section 62A.318, is 
amended to read: 
     62A.318 [MEDICARE SELECT POLICIES AND CERTIFICATES.] 
     (a) This section applies to Medicare select policies and 
certificates, as defined in this section, including those issued 
by health maintenance organizations.  No policy or certificate 
may be advertised as a Medicare select policy or certificate 
unless it meets the requirements of this section. 
     (b) For the purposes of this section: 
     (1) "complaint" means any dissatisfaction expressed by an 
individual concerning a Medicare select issuer or its network 
providers; 
     (2) "grievance" means dissatisfaction expressed in writing 
by an individual insured under a Medicare select policy or 
certificate with the administration, claims practices, or 
provision of services concerning a Medicare select issuer or its 
network providers; 
     (3) "Medicare select issuer" means an issuer offering, or 
seeking to offer, a Medicare select policy or certificate; 
     (4) "Medicare select policy" or "Medicare select 
certificate" means a Medicare supplement policy or certificate 
that contains restricted network provisions; 
     (5) "network provider" means a provider of health care, or 
a group of providers of health care, that has entered into a 
written agreement with the issuer to provide benefits insured 
under a Medicare select policy or certificate; 
     (6) "restricted network provision" means a provision that 
conditions the payment of benefits, in whole or in part, on the 
use of network providers; and 
    (7) "service area" means the geographic area approved by 
the commissioner within which an issuer is authorized to offer a 
Medicare select policy or certificate. 
    (c) The commissioner may authorize an issuer to offer a 
Medicare select policy or certificate pursuant to this section 
and section 4358 of the Omnibus Budget Reconciliation Act (OBRA) 
of 1990, Public Law Number 101-508, if the commissioner finds 
that the issuer has satisfied all of the requirements of this 
section Minnesota Statutes. 
    (d) A Medicare select issuer shall not issue a Medicare 
select policy or certificate in this state until its plan of 
operation has been approved by the commissioner. 
    (e) A Medicare select issuer shall file a proposed plan of 
operation with the commissioner, in a format prescribed by the 
commissioner.  The plan of operation shall contain at least the 
following information: 
    (1) evidence that all covered services that are subject to 
restricted network provisions are available and accessible 
through network providers, including a demonstration that: 
    (i) the services can be provided by network providers with 
reasonable promptness with respect to geographic location, hours 
of operation, and after-hour care.  The hours of operation and 
availability of after-hour care shall reflect usual practice in 
the local area.  Geographic availability shall reflect the usual 
travel times within the community; 
     (ii) the number of network providers in the service area is 
sufficient, with respect to current and expected policyholders, 
either: 
     (A) to deliver adequately all services that are subject to 
a restricted network provision; or 
     (B) to make appropriate referrals; 
     (iii) there are written agreements with network providers 
describing specific responsibilities; 
     (iv) emergency care is available 24 hours per day and seven 
days per week; and 
     (v) in the case of covered services that are subject to a 
restricted network provision and are provided on a prepaid 
basis, there are written agreements with network providers 
prohibiting the providers from billing or otherwise seeking 
reimbursement from or recourse against an individual insured 
under a Medicare select policy or certificate.  This section 
does not apply to supplemental charges or coinsurance amounts as 
stated in the Medicare select policy or certificate; 
     (2) a statement or map providing a clear description of the 
service area; 
     (3) a description of the grievance procedure to be used; 
     (4) a description of the quality assurance program, 
including: 
     (i) the formal organizational structure; 
     (ii) the written criteria for selection, retention, and 
removal of network providers; and 
     (iii) the procedures for evaluating quality of care 
provided by network providers, and the process to initiate 
corrective action when warranted; 
     (5) a list and description, by specialty, of the network 
providers; 
     (6) copies of the written information proposed to be used 
by the issuer to comply with paragraph (i); and 
     (7) any other information requested by the commissioner. 
     (f) A Medicare select issuer shall file proposed changes to 
the plan of operation, except for changes to the list of network 
providers, with the commissioner before implementing the 
changes.  The changes shall be considered approved by the 
commissioner after 30 days unless specifically disapproved. 
     An updated list of network providers shall be filed with 
the commissioner at least quarterly. 
     (g) A Medicare select policy or certificate shall not 
restrict payment for covered services provided by nonnetwork 
providers if: 
     (1) the services are for symptoms requiring emergency care 
or are immediately required for an unforeseen illness, injury, 
or condition; and 
     (2) it is not reasonable to obtain the services through a 
network provider. 
     (h) A Medicare select policy or certificate shall provide 
payment for full coverage under the policy or certificate for 
covered services that are not available through network 
providers. 
     (i) A Medicare select issuer shall make full and fair 
disclosure in writing of the provisions, restrictions, and 
limitations of the Medicare select policy or certificate to each 
applicant.  This disclosure must include at least the following: 
     (1) an outline of coverage sufficient to permit the 
applicant to compare the coverage and premiums of the Medicare 
select policy or certificate with: 
     (i) other Medicare supplement policies or certificates 
offered by the issuer; and 
     (ii) other Medicare select policies or certificates; 
     (2) a description, including address, phone number, and 
hours of operation, of the network providers, including primary 
care physicians, specialty physicians, hospitals, and other 
providers; 
     (3) a description of the restricted network provisions, 
including payments for coinsurance and deductibles when 
providers other than network providers are used; 
     (4) a description of coverage for emergency and urgently 
needed care and other out-of-service area coverage; 
     (5) a description of limitations on referrals to restricted 
network providers and to other providers; 
     (6) a description of the policyholder's rights to purchase 
any other Medicare supplement policy or certificate otherwise 
offered by the issuer; and 
     (7) a description of the Medicare select issuer's quality 
assurance program and grievance procedure. 
     (j) Before the sale of a Medicare select policy or 
certificate, a Medicare select issuer shall obtain from the 
applicant a signed and dated form stating that the applicant has 
received the information provided pursuant to paragraph (i) and 
that the applicant understands the restrictions of the Medicare 
select policy or certificate. 
     (k) A Medicare select issuer shall have and use procedures 
for hearing complaints and resolving written grievances from the 
subscribers.  The procedures shall be aimed at mutual agreement 
for settlement and may include arbitration procedures.  
     (1) The grievance procedure must be described in the policy 
and certificates and in the outline of coverage. 
     (2) At the time the policy or certificate is issued, the 
issuer shall provide detailed information to the policyholder 
describing how a grievance may be registered with the issuer. 
     (3) Grievances must be considered in a timely manner and 
must be transmitted to appropriate decision makers who have 
authority to fully investigate the issue and take corrective 
action. 
     (4) If a grievance is found to be valid, corrective action 
must be taken promptly. 
     (5) All concerned parties must be notified about the 
results of a grievance. 
     (6) The issuer shall report no later than March 31 of each 
year to the commissioner regarding the grievance procedure.  The 
report shall be in a format prescribed by the commissioner and 
shall contain the number of grievances filed in the past year 
and a summary of the subject, nature, and resolution of the 
grievances. 
     (l) At the time of initial purchase, a Medicare select 
issuer shall make available to each applicant for a Medicare 
select policy or certificate the opportunity to purchase a 
Medicare supplement policy or certificate otherwise offered by 
the issuer. 
     (m)(1) At the request of an individual insured under a 
Medicare select policy or certificate, a Medicare select issuer 
shall make available to the individual insured the opportunity 
to purchase a Medicare supplement policy or certificate offered 
by the issuer that has comparable or lesser benefits and that 
does not contain a restricted network provision.  The issuer 
shall make the policies or certificates available without 
requiring evidence of insurability after the Medicare supplement 
policy or certificate has been in force for six months.  If the 
issuer does not have available for sale a policy or certificate 
without restrictive network provisions, the issuer shall provide 
enrollment information for the Minnesota comprehensive health 
association Medicare supplement plans. 
     (2) For the purposes of this paragraph, a Medicare 
supplement policy or certificate will be considered to have 
comparable or lesser benefits unless it contains one or more 
significant benefits not included in the Medicare select policy 
or certificate being replaced.  For the purposes of this 
paragraph, a significant benefit means coverage for the Medicare 
part A deductible, coverage for prescription drugs, coverage for 
at-home recovery services, or coverage for part B excess charges.
     (n) Medicare select policies and certificates shall provide 
for continuation of coverage if the secretary of health and 
human services determines that Medicare select policies and 
certificates issued pursuant to this section should be 
discontinued due to either the failure of the Medicare select 
program to be reauthorized under law or its substantial 
amendment. 
     (1) Each Medicare select issuer shall make available to 
each individual insured under a Medicare select policy or 
certificate the opportunity to purchase a Medicare supplement 
policy or certificate offered by the issuer that has comparable 
or lesser benefits and that does not contain a restricted 
network provision.  The issuer shall make the policies and 
certificates available without requiring evidence of 
insurability. 
     (2) For the purposes of this paragraph, a Medicare 
supplement policy or certificate will be considered to have 
comparable or lesser benefits unless it contains one or more 
significant benefits not included in the Medicare select policy 
or certificate being replaced.  For the purposes of this 
paragraph, a significant benefit means coverage for the Medicare 
part A deductible, coverage for prescription drugs, coverage for 
at-home recovery services, or coverage for part B excess charges.
    (o) A Medicare select issuer shall comply with reasonable 
requests for data made by state or federal agencies, including 
the United States Department of Health and Human Services, for 
the purpose of evaluating the Medicare select program. 
    (p) Medicare select policies and certificates under this 
section shall be regulated and approved by the department of 
commerce. 
    (q) Medicare select policies and certificates must be 
either a basic plan or an extended basic plan.  The basic plan 
may also include any of the optional benefit riders authorized 
by section 62A.316.  Preventive care provided by Medicare select 
policies or certificates must be provided as set forth in 
section 62A.315 or 62A.316, except that the benefits are as 
defined in chapter 62D. 
    (r) Medicare select policies and certificates are exempt 
from the requirements of section 62A.31, subdivision 1, 
paragraph (d).  This paragraph expires January 1, 1994. 
    Sec. 7.  Minnesota Statutes 1992, section 62A.36, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LOSS RATIO STANDARDS.] (a) A Medicare 
supplement policy form or certificate form shall not be 
delivered or issued for delivery unless the policy form or 
certificate form can be expected, as estimated for the entire 
period for which rates are computed to provide coverage, to 
return to policyholders and certificate holders in the form of 
aggregate benefits, not including anticipated refunds or 
credits, provided under the policy form or certificate form:  
    (1) at least 75 percent of the aggregate amount of premiums 
earned in the case of group policies, and 
    (2) at least 65 percent of the aggregate amount of premiums 
earned in the case of individual policies, calculated on the 
basis of incurred claims experience or incurred health care 
expenses where coverage is provided by a health maintenance 
organization on a service rather than reimbursement basis and 
earned premiums for the period and according to accepted 
actuarial principles and practices.  An insurer shall 
demonstrate that the third year loss ratio is greater than or 
equal to the applicable percentage.  
    All filings of rates and rating schedules shall demonstrate 
that actual expected claims in relation to premiums comply with 
the requirements of this section when combined with actual 
experience to date.  Filings of rate revisions shall also 
demonstrate that the anticipated loss ratio over the entire 
future period for which the revised rates are computed to 
provide coverage can be expected to meet the appropriate loss 
ratio standards, and aggregate loss ratio from inception of the 
policy or certificate shall equal or exceed the appropriate loss 
ratio standards.  
     (b) An issuer shall collect and file with the commissioner 
by May 31 of each year the data contained in the National 
Association of Insurance Commissioners Medicare Supplement 
Refund Calculating form, for each type of Medicare supplement 
benefit plan.  
     If, on the basis of the experience as reported, the 
benchmark ratio since inception (ratio 1) exceeds the adjusted 
experience ratio since inception (ratio 3), then a refund or 
credit calculation is required.  The refund calculation must be 
done on a statewide basis for each type in a standard Medicare 
supplement benefit plan.  For purposes of the refund or credit 
calculation, experience on policies issued within the reporting 
year shall be excluded.  
     A refund or credit shall be made only when the benchmark 
loss ratio exceeds the adjusted experience loss ratio and the 
amount to be refunded or credited exceeds a de minimis level.  
The refund shall include interest from the end of the calendar 
year to the date of the refund or credit at a rate specified by 
the secretary of health and human services, but in no event 
shall it be less than the average rate of interest for 13-week 
treasury bills.  A refund or credit against premiums due shall 
be made by September 30 following the experience year on which 
the refund or credit is based.  
     (c) An issuer of Medicare supplement policies and 
certificates in this state shall file annually its rates, rating 
schedule, and supporting documentation including ratios of 
incurred losses to earned premiums by policy or certificate 
duration for approval by the commissioner according to the 
filing requirements and procedures prescribed by the 
commissioner.  The supporting documentation shall also 
demonstrate in accordance with actuarial standards of practice 
using reasonable assumptions that the appropriate loss ratio 
standards can be expected to be met over the entire period for 
which rates are computed.  The demonstration shall exclude 
active life reserves.  An expected third-year loss ratio which 
is greater than or equal to the applicable percentage shall be 
demonstrated for policies or certificates in force less than 
three years. 
     As soon as practicable, but before the effective date of 
enhancements in Medicare benefits, every issuer of Medicare 
supplement policies or certificates in this state shall file 
with the commissioner, in accordance with the applicable filing 
procedures of this state:  
     (1) a premium adjustment that is necessary to produce an 
expected loss ratio under the policy or certificate that will 
conform with minimum loss ratio standards for Medicare 
supplement policies or certificates.  No premium adjustment that 
would modify the loss ratio experience under the policy or 
certificate other than the adjustments described herein shall be 
made with respect to a policy or certificate at any time other 
than on its renewal date or anniversary date; 
     (2) if an issuer fails to make premium adjustments 
acceptable to the commissioner, the commissioner may order 
premium adjustments, refunds, or premium credits considered 
necessary to achieve the loss ratio required by this section; 
     (3) any appropriate riders, endorsements, or policy or 
certificate forms needed to accomplish the Medicare supplement 
insurance policy or certificate modifications necessary to 
eliminate benefit duplications with Medicare.  The riders, 
endorsements, or policy or certificate forms shall provide a 
clear description of the Medicare supplement benefits provided 
by the policy or certificate. 
     (d) The commissioner may conduct a public hearing to gather 
information concerning a request by an issuer for an increase in 
a rate for a policy form or certificate form if the experience 
of the form for the previous reporting period is not in 
compliance with the applicable loss ratio standard.  The 
determination of compliance is made without consideration of a 
refund or credit for the reporting period.  Public notice of the 
hearing shall be furnished in a manner considered appropriate by 
the commissioner. 
    (e) An issuer shall not use or change premium rates for a 
Medicare supplement policy or certificate unless the rates, 
rating schedule, and supporting documentation have been filed 
with, and approved by, the commissioner according to the filing 
requirements and procedures prescribed by the commissioner. 
    Sec. 8.  Minnesota Statutes 1992, section 62A.39, is 
amended to read: 
    62A.39 [DISCLOSURE.] 
    No individual Medicare supplement plan shall be delivered 
or issued in this state and no certificate shall be delivered 
under a group Medicare supplement plan delivered or issued in 
this state unless the plan is shown on the cover page and an 
outline containing at least the following information in no less 
than 12-point type is delivered to the applicant at the time the 
application is made:  
    (a) A description of the principal benefits and coverage 
provided in the policy; 
    (b) A statement of the exceptions, reductions, and 
limitations contained in the policy including the following 
language, as applicable, in bold print:  "THIS POLICY DOES NOT 
COVER ALL MEDICAL EXPENSES BEYOND THOSE COVERED BY MEDICARE.  
THIS POLICY DOES NOT COVER ALL SKILLED NURSING HOME CARE 
EXPENSES AND DOES NOT COVER CUSTODIAL OR RESIDENTIAL NURSING 
CARE.  READ YOUR POLICY CAREFULLY TO DETERMINE WHICH NURSING 
HOME FACILITIES AND EXPENSES ARE COVERED BY YOUR POLICY."; 
    (c) A statement of the renewal provisions including any 
reservations by the insurer of a right to change premiums.  The 
premium and manner of payment shall be stated for all plans that 
are offered to the prospective applicant.  All possible premiums 
for the prospective applicant shall be illustrated.  If the 
premium is based on the increasing age of the insured, 
information specifying when premiums will change must be 
included; 
    (d)  [READ YOUR POLICY OR CERTIFICATE VERY CAREFULLY.] 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.  
Additionally, it does not give all the details of Medicare 
coverage.  Contact your local Social Security office or consult 
the Medicare handbook for more details; 
    (e) A statement of the policy's loss ratio as follows:  
"This policy provides an anticipated loss ratio of (..%).  This 
means that, on the average, policyholders may expect that 
($....) of every $100.00 in premium will be returned as benefits 
to policyholders over the life of the contract."; 
    (f) When the outline of coverage is provided at the time of 
application and the Medicare supplement policy or certificate is 
issued on a basis that would require revision of the outline, a 
substitute outline of coverage properly describing the policy or 
certificate shall accompany the policy or certificate when it is 
delivered and contain the following statement, in no less than 
12-point type, immediately above the company name: 
"NOTICE:  Read this outline of coverage carefully.  It is not 
identical to the outline of coverage provided upon application, 
and the coverage originally applied for has not been issued."; 
    (g)  [RIGHT TO RETURN POLICY OR CERTIFICATE.] "If you find 
that you are not satisfied with your policy or certificate for 
any reason, you may return it to (insert issuer's address).  If 
you send the policy or certificate back to us within 30 days 
after you receive it, we will treat the policy or certificate as 
if it had never been issued and return all of your payments 
within ten days."; 
     (h)  [POLICY OR CERTIFICATE REPLACEMENT.] "If you are 
replacing another health insurance policy or certificate, do NOT 
cancel it until you have actually received your new policy or 
certificate and are sure you want to keep it."; 
     (i)  [NOTICE.] "This policy or certificate may not fully 
cover all of your medical costs."  
     A.  (for agents:) 
     "Neither (insert company's name) nor its agents are 
connected with Medicare." 
     B.  (for direct response:) 
     "(insert company's name) is not connected with Medicare." 
     (j) Notice regarding policies or certificates which are not 
Medicare supplement policies.  
     Any accident and sickness insurance policy or certificate, 
other than a Medicare supplement policy, or a policy or 
certificate issued pursuant to a contract under the federal 
Social Security Act, section 1833 or 1876 (United States Code, 
title 42, section 1395, et seq.), disability income policy; 
basic, catastrophic, or major medical expense policy; single 
premium nonrenewable policy; or other policy, issued for 
delivery in this state to persons eligible for Medicare shall 
notify insureds under the policy that the policy is not a 
Medicare supplement policy or certificate.  The notice shall 
either be printed or attached to the first page of the outline 
of coverage delivered to insureds under the policy, or if no 
outline of coverage is delivered, to the first page of the 
policy or certificate delivered to insureds.  The notice shall 
be in no less than 12-point type and shall contain the following 
language: 
 "THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT 
(POLICY OR CONTRACT).  If you are eligible for Medicare, 
review the Medicare supplement buyer's guide available from 
the company." 
     (k)  [COMPLETE ANSWERS ARE VERY IMPORTANT.] "When you fill 
out the application for the new policy or certificate, be sure 
to answer truthfully and completely all questions about your 
medical and health history.  The company may cancel your policy 
or certificate and refuse to pay any claims if you leave out or 
falsify important medical information."  If the policy or 
certificate is guaranteed issue, this paragraph need not appear. 
     "Review the application carefully before you sign it.  Be 
certain that all information has been properly recorded."  
     Include for each plan, prominently identified in the cover 
page, a chart showing the services, Medicare payments, plan 
payments, and insured payments for each plan, using the same 
language, in the same order, using uniform layout and format. 
     The outline of coverage provided to applicants pursuant to 
this section consists of four parts:  a cover page, premium 
information, disclosure pages, and charts displaying the 
features of each benefit plan offered by the insurer. 
    Sec. 9.  Minnesota Statutes 1992, section 62A.436, is 
amended to read: 
    62A.436 [COMMISSIONS.] 
    The commission, sales allowance, service fee, or 
compensation to an agent for the sale of a Medicare supplement 
plan must be the same for each of the first four years of the 
policy.  The commissioner may grant a waiver of this restriction 
on commissions when the commissioner believes that the insurer's 
fee structure does not encourage deceptive practices. 
    In no event may the rate of commission, sales allowance, 
service fee, or compensation for the sale of a basic Medicare 
supplement plan exceed that which applies to the sale of an 
extended basic Medicare supplement plan. 
    For purposes of this section, "compensation" includes 
pecuniary or nonpecuniary remuneration of any kind relating to 
the sale or renewal of the policy or certificate, including but 
not limited to bonuses, gifts, prizes, awards, and finder's fees.
    This section also applies to sales of replacement policies. 
    Sec. 10.  Minnesota Statutes 1992, section 62A.44, 
subdivision 2, is amended to read: 
    Subd. 2.  [QUESTIONS.] (a) Application forms shall include 
the following questions designed to elicit information as to 
whether, as of the date of the application, the applicant has 
another Medicare supplement or other health insurance policy or 
certificate in force or whether a Medicare supplement policy or 
certificate is intended to replace any other accident and 
sickness policy or certificate presently in force.  A 
supplementary application or other form to be signed by the 
applicant and agent containing the questions and statements may 
be used. 
 "(1) You do not need more than one Medicare supplement 
policy or certificate. 
 (2) If you are 65 or older, you may be eligible for 
benefits under Medicaid and may not need a Medicare 
supplement policy or certificate.  
 (3) The benefits and premiums under your Medicare 
supplement policy or certificate will be suspended during 
your entitlement to benefits under Medicaid for 24 months.  
You must request this suspension within 90 days of becoming 
eligible for Medicaid.  If you are no longer entitled to 
Medicaid, your policy or certificate will be reinstated if 
requested within 90 days of losing Medicaid eligibility. 
 To the best of your knowledge: 
 (1) Do you have another Medicare supplement policy or 
certificate in force, including health care service 
contract or health maintenance organization contract?  If 
so, with which company? 
 (2) Do you have any other health insurance policies that 
provide benefits that this Medicare supplement policy or 
certificate would duplicate?  If so, with which you do, 
please name the company? and the kind of policy.  
 (3) If the answer to question 1 or 2 is yes, do you intend 
to replace these medical or health policies with this 
policy or certificate? 
 (4) Are you covered by Medicaid?" 
    (b) Agents shall list any other health insurance policies 
they have sold to the applicant.  
    (1) List policies sold that are still in force.  
    (2) List policies sold in the past five years that are no 
longer in force.  
    (c) In the case of a direct response issuer, a copy of the 
application or supplemental form, signed by the applicant, and 
acknowledged by the insurer, shall be returned to the applicant 
by the insurer on delivery of the policy or certificate.  
    (d) Upon determining that a sale will involve replacement 
of Medicare supplement coverage, any issuer, other than a direct 
response issuer, or its agent, shall furnish the applicant, 
before issuance or delivery of the Medicare supplement policy or 
certificate, a notice regarding replacement of Medicare 
supplement coverage.  One copy of the notice signed by the 
applicant and the agent, except where the coverage is sold 
without an agent, shall be provided to the applicant and an 
additional signed copy shall be retained by the issuer.  A 
direct response issuer shall deliver to the applicant at the 
time of the issuance of the policy or certificate the notice 
regarding replacement of Medicare supplement coverage. 
     (e) The notice required by paragraph (d) for an issuer 
shall be provided in substantially the following form in no less 
than 12-point type: 

               "NOTICE TO APPLICANT REGARDING REPLACEMENT 

                    OF MEDICARE SUPPLEMENT INSURANCE

                 (Insurance company's name and address)

      SAVE THIS NOTICE!  IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
     According to (your application) (information you have 
furnished), you intend to terminate existing Medicare supplement 
insurance and replace it with a policy or certificate to be 
issued by (Company Name) Insurance Company.  Your new policy or 
certificate will provide 30 days within which you may decide 
without cost whether you desire to keep the policy or 
certificate. 
     You should review this new coverage carefully.  Compare it 
with all accident and sickness coverage you now have.  Terminate 
your present policy only if, after due consideration, you find 
that purchase of this Medicare supplement coverage is a wise 
decision. 
 STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER 
REPRESENTATIVE):  I have reviewed your current medical or 
health insurance coverage.  The replacement of insurance 
involved in this transaction does not duplicate coverage, 
to the best of my knowledge.  The replacement policy or 
certificate is being purchased for the following reason(s) 
(check one): 
 ______  Additional benefits 
 ______  No change in benefits, but lower premiums 
 ______  Fewer benefits and lower premiums 
 ______  Other (please specify)  
____________________________________________________________
____________________________________________________________
____________________________________________________________
 (1) Health conditions which you may presently have 
(preexisting conditions) may not be immediately or fully 
covered under the new policy or certificate.  This could 
result in denial or delay of a claim for benefits under the 
new policy or certificate, whereas a similar claim might 
have been payable under your present policy or certificate. 
 (2) State law provides that your replacement policy or 
certificate may not contain new preexisting conditions, 
waiting periods, elimination periods, or probationary 
periods.  The insurer will waive any time periods 
applicable to preexisting conditions, waiting periods, 
elimination periods, or probationary periods in the new 
policy (or coverage) for similar benefits to the extent the 
time was spent (depleted) under the original policy or 
certificate. 
 (3) If you still wish to terminate your present policy or 
certificate and replace it with new coverage, be certain to 
truthfully and completely answer all questions on the 
application concerning your medical and health history.  
Failure to include all material medical information on an 
application may provide a basis for the company to deny any 
future claims and to refund your premium as though your 
policy or certificate had never been in force.  After the 
application has been completed and before you sign it, 
review it carefully to be certain that all information has 
been properly recorded.  (If the policy or certificate is 
guaranteed issue, this paragraph need not appear.) 
 Do not cancel your present policy or certificate until you 
have received your new policy or certificate and are you 
sure that you want to keep it. 
                       
 _____________________________________________________ 
 (Signature of Agent, Broker, or Other Representative)* 
                       
 _____________________________________________________ 
 (Typed Name and Address of Issuer, Agent, or Broker) 
                 
 _____________________ 
 (Date) 
                
 __________________________________ 
 (Applicant's Signature) 
                
 _____________________ 
 (Date) 
                
 *Signature not required for direct response sales." 
    (f) Paragraph (e), clauses (1) and (2), of the replacement 
notice (applicable to preexisting conditions) may be deleted by 
an issuer if the replacement does not involve application of a 
new preexisting condition limitation. 
    Sec. 11.  Laws 1992, chapter 554, article 1, section 18, is 
amended to read: 
    Sec. 18.  [EFFECTIVE DATE.] 
    Sections 1 to 14 and 17 are effective the day following 
final enactment and apply to policies or certificates issued 
before and after that date, except that subdivision 1r, of 
section 1 applies to policies or certificates issued before or 
after that date.  Sections 15 and 16 are effective the day 
following final enactment. 
    Sec. 12.  [REVISOR INSTRUCTION.] 
    The revisor of statutes shall renumber Minnesota Statutes 
1992, section 62A.31, subdivision 1a, as subdivision 6 of that 
section. 
    Sec. 13.  [EFFECTIVE DATE.] 
    Section 11 is effective retroactive to April 30, 1992. 
    Presented to the governor May 17, 1993 
    Signed by the governor May 20, 1993, 2:17 p.m.