1358.1. Every health care service plan that offers any contract
that primarily or solely supplements Medicare or that is advertised
or represented as a supplement to Medicare, shall, in addition to
complying with this chapter and rules of the director, comply with
this article. The basic health care services required to be provided
pursuant to Sections 1345 and 1367 shall not be included in Medicare
supplement contracts subject to this article, to the extent that
California is required to disallow coverage for these health care
services under the federal Medicare supplement standardization
requirements set forth in Section 1882 of the federal Social Security
Act (42 U.S.C.A. Sec. 1395ss).
1358.2. The purpose of this article is to provide for the
reasonable standardization of coverage and simplification of terms
and benefits of Medicare supplement contracts, to facilitate public
understanding and comparison of those contracts, to eliminate
provisions contained in those contracts that may be misleading or
confusing in connection with the purchase of the contracts or with
the settlement of claims, and to provide for full disclosures in the
sale of Medicare supplement contracts to persons eligible for
Medicare.
1358.3. (a) Except as otherwise provided in this section or in
Sections 1358.7, 1358.12, 1358.13, 1358.16, and 1358.21, this article
shall apply to all group and individual Medicare supplement
contracts advertised, solicited, or issued for delivery in this state
on or after January 1, 2001.
(b) This article shall not apply to a contract 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.
(c) This article shall not apply to Medicare supplement policies
or certificates subject to Article 6 (commencing with Section
10192.1) of Chapter 1 of Part 1 of Division 2 of the Insurance Code.
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of bankruptcy and has
ceased doing business in the state.
(c) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(42 U.S.C. Sec. 1395c et seq.) (Medicare).
(C) Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396 et seq.) (Medicaid), other than coverage consisting solely of
benefits under Section 1928 of that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (22 U.S.C. Sec. 2504(e)).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Part 2 of Division 2 of the
Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Sec. 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that 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.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the federal Social Security Act.
(k) "1990 standardized Medicare supplement benefit plan," "1990
standardized benefit plan," or "1990 plan" means a group or
individual Medicare supplement contract issued on or after July 21,
1992, and with an effective date prior to June 1, 2010, and includes
Medicare supplement contracts renewed on or after that date that are
not replaced by the issuer at the request of the enrollee or
subscriber.
(l) "2010 standardized Medicare supplement benefit plan," "2010
standardized benefit plan," or "2010 plan" means a group or
individual Medicare supplement contract issued with an effective date
on or after June 1, 2010.
(m) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
1358.5. (a) A contract shall not be advertised, solicited, or
issued for delivery as a Medicare supplement contract unless the
contract contains definitions or terms that conform to the
requirements of this section.
(1) (A) "Accident," "accidental injury," or "accidental means"
shall be defined to employ "result" language and shall not include
words that establish an accidental means test or use words such as
"external, violent, visible wounds" or other similar words of
description or characterization.
(B) The definition shall not be more restrictive than the
following: "injury or injuries for which benefits are provided means
accidental bodily injury sustained by the covered person that is the
direct result of an accident, independent of disease or bodily
infirmity or any other cause, and occurs while coverage is in force."
(C) The definition may provide that injuries shall not include
injuries for which benefits are provided or available under any
workers' compensation, employer's liability, or similar law, unless
prohibited by law.
(2) "Benefit period" or "Medicare benefit period" shall not be
defined more restrictively than as defined in the Medicare program.
(3) "Convalescent nursing home," "extended care facility," or
"skilled nursing facility" shall not be defined more restrictively
than as defined in the Medicare program.
(4) "Health care expenses" means for purposes of Section 1358.14,
expenses of health care service plans associated with the delivery of
health care services, which expenses are analogous to incurred
losses of insurers.
(5) "Hospital" may be defined in relation to its status,
facilities, and available services or to reflect its accreditation by
the Joint Commission on Accreditation of Hospitals, but not more
restrictively than as defined in the Medicare Program.
(6) "Medicare" shall be defined in the contract. "Medicare" may be
substantially defined as "The Health Insurance for the Aged Act,
Title XVIII of the Social Security Amendments of 1965, as amended,"
or "Title I, Part I of Public Law 89-97, as enacted by the 89th
Congress and popularly known as the Health Insurance for the Aged
Act, as amended," or words of similar import.
(7) "Medicare eligible expenses" shall mean expenses of the kinds
covered by Medicare Parts A and B, to the extent recognized as
reasonable and medically necessary by Medicare.
(8) "Physician" shall not be defined more restrictively than as
defined in the Medicare Program.
(9) (A) "Sickness" shall not be defined more restrictively than as
follows: "sickness means illness or disease of an insured person
that first manifests itself after the effective date of insurance and
while the insurance is in force."
(B) The definition may be further modified to exclude sicknesses
or diseases for which benefits are provided under any workers'
compensation, occupational disease, employer's liability, or similar
law.
(b) Nothing in this section shall be construed as prohibiting any
contract, by definitions or express provisions, from limiting or
restricting any or all of the benefits provided under the contract,
except in-area and out-of-area emergency services, to those health
care services that are delivered by issuer, employed, owned, or
contracting providers, and provider facilities, so long as the
contract complies with the provisions of Sections 1358.14 and 1367
and with Section 1300.67 of Title 28 of the California Code of
Regulations.
(c) Nothing in this section shall be construed as prohibiting any
contract that limits or restricts any or all of the benefits provided
under the contract in the manner contemplated in subdivision (b)
from limiting its obligation to deliver services, and disclaiming any
liability from any delay or failure to provide those services (1) in
the event of a major disaster or epidemic or (2) in the event of
circumstances not reasonably within the control of the issuer, such
as the partial or total destruction of facilities, war, riot, civil
insurrection, disability of a significant part of its health
personnel, or similar circumstances so long as the provisions comply
with the provisions of subdivision (h) of Section 1367.
1358.6. (a) (1) Except for permitted preexisting condition clauses
as described in Sections 1358.7, 1358.8, and 1358.81, a contract
shall not be advertised, solicited, or issued for delivery as a
Medicare supplement contract if the contract contains definitions,
limitations, exclusions, conditions, reductions, or other provisions
that are more restrictive or limiting than that term as officially
used in Medicare, except as expressly authorized by this article.
(2) No issuer may advertise, solicit, or issue for delivery any
Medicare supplement contract with hospital or medical coverage if the
contract contains any of the prohibited provisions described in
subdivision (b).
(b) The following provisions shall be deemed to be unfair,
unreasonable, and inconsistent with the objectives of this chapter
and shall not be contained in any Medicare supplement contract:
(1) Any waiver, exclusion, limitation, or reduction based on or
relating to a preexisting disease or physical condition, unless that
waiver, exclusion, limitation, or reduction (A) applies only to
coverage for specified services rendered not more than six months
from the effective date of coverage, (B) is based on or relates only
to a preexisting disease or physical condition defined no 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, (C) does not apply to
any coverage under any group contract, and (D) is approved in advance
by the director. Any limitations with respect to a preexisting
condition shall appear as a separate paragraph of the contract and be
labeled "Preexisting Condition Limitations."
(2) Except with respect to a group contract subject to, and in
compliance with, Section 1399.62, any provision denying coverage,
after termination of the contract, for services provided continuously
beginning while the contract was in effect, during the continuous
total disability of the subscriber or enrollee, except that the
coverage may be limited to a reasonable period of time not less than
the duration of the contract benefit period, if any, and may be
limited to the maximum benefits provided under the contract.
(c) A Medicare supplement contract in force shall not contain
benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 1358.8, a Medicare supplement contract with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current enrollees and subscribers, at
their option, who do not enroll in Medicare Part D.
(2) A Medicare supplement contract with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement contract
with benefits for outpatient prescription drugs shall not be renewed
after the enrollee or subscriber enrolls in Medicare Part D unless
both of the following conditions exist:
(A) The contract is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
1358.7. A contract shall not be advertised, solicited, or issued
for delivery as a Medicare supplement contract prior to January 1,
2001, unless it meets or exceeds requirements applicable pursuant to
this code that were in effect prior to that date.
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.
1358.81. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
with an effective date on or after June 1, 2010. No contract may be
advertised, solicited, delivered, or issued for delivery in this
state as a Medicare supplement contract unless it complies with these
benefit standards. No issuer may offer any 1990 standardized
Medicare supplement contract for sale with an effective date on or
after June 1, 2010. Benefit standards applicable to Medicare
supplement contracts issued with an effective date before June 1,
2010, remain subject to the requirements of Section 1358.8.
(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 enrollee or
subscriber, other than the nonpayment of prepaid or periodic charges.
(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 prepaid or periodic charges 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 the Medicare supplement contract is terminated by the group
contractholder and is not replaced as provided under subparagraph
(E), the issuer shall offer enrollees or subscribers an individual
Medicare supplement contract which, at the option of the enrollee or
subscriber, does one of the following:
(i) Provides for continuation of the benefits contained in the
group contract.
(ii) Provides for benefits that otherwise meet the requirements of
one of the standardized contracts defined in this article.
(D) If an individual is an enrollee or subscriber in a group
Medicare supplement contract and the individual terminates membership
in the group, the issuer shall do one of the following:
(i) Offer the enrollee or subscriber the conversion opportunity
described in subparagraph (C).
(ii) At the option of the group contractholder, offer the enrollee
or subscriber continuation of coverage under the group contract.
(E) (i) If a group Medicare supplement contract is replaced by
another group Medicare supplement contract purchased by the same
group contractholder, 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.
(ii) If a Medicare supplement contract replaces another Medicare
supplement contract that has been in force for six months or more,
the replacing issuer shall not impose an exclusion or limitation
based on a preexisting condition. If the original coverage has been
in force for less than six months, the replacing issuer shall waive
any time period applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
contract to the extent the time was spent under the original
coverage.
(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 enrollee or subscriber, limited to the
duration of the contract benefit period, if any, or 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 or subscriber for the
period, not to exceed 24 months, in which the enrollee or subscriber
has applied for, and is determined to be entitled to, medical
assistance under Medi-Cal under Title XIX of the federal Social
Security Act, but only if the enrollee or subscriber notifies the
issuer of the contract within 90 days after the date the individual
becomes entitled to assistance. Upon receipt of timely notice, the
insurer shall return directly to the enrollee or subscriber that
portion of the prepaid or periodic charge attributable to the period
of Medi-Cal eligibility, subject to adjustment for paid claims.
(ii) If suspension occurs and if the enrollee or subscriber loses
entitlement to medical assistance under Medi-Cal, the Medicare
supplement contract shall be automatically reinstituted (effective as
of the date of termination of entitlement) as of the termination of
entitlement if the enrollee or subscriber 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 or equivalent coverage
shall be provided if the prior contract is no longer available.
(iii) Each Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended (for any period that may be provided by federal regulation)
at the request of the enrollee or subscriber 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 if 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 of loss of coverage within 90 days after
the date of the loss and pays the applicable prepaid or periodic
charge.
(B) Reinstitution of coverages shall comply with all of the
following requirements:
(i) Not provide for any waiting period with respect to treatment
of preexisting conditions.
(ii) Provide for resumption of coverage that is substantially
equivalent to coverage in effect before the date of suspension.
(iii) Provide for classification of prepaid or periodic charges on
terms at least as favorable to the enrollee or subscriber as the
classification of the prepaid or periodic charge that would have
applied to the enrollee or subscriber had the coverage not been
suspended.
(8) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(9) 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.
(10) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(11) 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.
(12) 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, B, C, D, F, high deductible F, G, M, and N, every
issuer of Medicare supplement benefit plans shall make available a
contract including only the following basic "core" package of
benefits to each prospective enrollee or subscriber. An issuer may
make available to prospective enrollees or subscribers 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 through 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 (PPS) 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 insured
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 department services paid under a prospective
payment system, the copayment amount, of Medicare eligible expenses
under Part B regardless of hospital confinement, subject to the
Medicare Part B deductible.
(6) Coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B, C, D, F, high deductible F, G,
M, and N, consistent with the plan type and benefits for each plan as
provided in Section 1358.91:
(1) With respect to the Medicare Part A deductible, coverage for
100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(2) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(3) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day through the 100th day in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(4) With respect to the Medicare Part B deductible, coverage for
100 percent of the Medicare Part B deductible amount per calendar
year regardless of hospital confinement.
(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 charges 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 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.
1358.9. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
on or after July 21, 1992, and with an effective date prior to June
1, 2010.
(a) An issuer shall make available to each prospective enrollee a
contract form containing only the basic (core) benefits, as defined
in subdivision (b) of Section 1358.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 1358.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to L,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 1358.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 1358.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 1358.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
1358.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, and medically necessary emergency care in a foreign
country as defined in paragraphs (1), (2), (3), and (8) of
subdivision (c) of Section 1358.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and the at-home recovery benefit
as defined in paragraphs (1), (2), (8), and (10) of subdivision (c)
of Section 1358.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and preventive medical care as
defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of
Section 1358.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
1358.8, respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country
as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision
(c) of Section 1358.8, respectively. The annual high deductible plan
F deductible shall consist of out-of-pocket expenses, other than
premiums, for services covered by the Medicare supplement plan F
policy, and shall be in addition to any other specific benefit
deductibles. The annual high deductible Plan F deductible shall be
one thousand five hundred dollars ($1,500) for 1998 and 1999, and
shall be based on the calendar year, as adjusted annually thereafter
by the secretary to reflect the change in the Consumer Price Index
for all urban consumers for the 12-month period ending with August of
the preceding year, and rounded to the nearest multiple of ten
dollars ($10).
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent of the Medicare
Part B excess charges, medically necessary emergency care in a
foreign country, and the at-home recovery benefit as defined in
paragraphs (1), (2), (4), (8), and (10) of subdivision (c) of Section
1358.8, respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
subdivision (c) of Section 1358.8, respectively. The outpatient
prescription drug benefit shall not be included in a Medicare
supplement contract sold on or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care benefit,
and at-home recovery benefit as defined in paragraphs (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The annual high deductible plan J deductible shall
consist of out-of-pocket expenses, other than premiums, for services
covered by the Medicare supplement plan J policy, and shall be in
addition to any other specific benefit deductibles. The annual
deductible shall be one thousand five hundred dollars ($1,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars ($10). The outpatient prescription drug
benefit shall not be included in a Medicare supplement contract sold
on or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
1358.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
1358.8.
(f) An issuer may, with the prior approval of the director, offer
contracts with new or innovative benefits in addition to the benefits
provided in a contract that otherwise complies with the applicable
standards. The new or innovative benefits may include benefits that
are appropriate to Medicare supplement contracts, that are not
otherwise available and that are cost-effective and offered in a
manner that is consistent with the goal of si
1358.1. Every health care service plan that offers any contract
that primarily or solely supplements Medicare or that is advertised
or represented as a supplement to Medicare, shall, in addition to
complying with this chapter and rules of the director, comply with
this article. The basic health care services required to be provided
pursuant to Sections 1345 and 1367 shall not be included in Medicare
supplement contracts subject to this article, to the extent that
California is required to disallow coverage for these health care
services under the federal Medicare supplement standardization
requirements set forth in Section 1882 of the federal Social Security
Act (42 U.S.C.A. Sec. 1395ss).
1358.2. The purpose of this article is to provide for the
reasonable standardization of coverage and simplification of terms
and benefits of Medicare supplement contracts, to facilitate public
understanding and comparison of those contracts, to eliminate
provisions contained in those contracts that may be misleading or
confusing in connection with the purchase of the contracts or with
the settlement of claims, and to provide for full disclosures in the
sale of Medicare supplement contracts to persons eligible for
Medicare.
1358.3. (a) Except as otherwise provided in this section or in
Sections 1358.7, 1358.12, 1358.13, 1358.16, and 1358.21, this article
shall apply to all group and individual Medicare supplement
contracts advertised, solicited, or issued for delivery in this state
on or after January 1, 2001.
(b) This article shall not apply to a contract 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.
(c) This article shall not apply to Medicare supplement policies
or certificates subject to Article 6 (commencing with Section
10192.1) of Chapter 1 of Part 1 of Division 2 of the Insurance Code.
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of bankruptcy and has
ceased doing business in the state.
(c) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(42 U.S.C. Sec. 1395c et seq.) (Medicare).
(C) Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396 et seq.) (Medicaid), other than coverage consisting solely of
benefits under Section 1928 of that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (22 U.S.C. Sec. 2504(e)).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Part 2 of Division 2 of the
Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Sec. 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that 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.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the federal Social Security Act.
(k) "1990 standardized Medicare supplement benefit plan," "1990
standardized benefit plan," or "1990 plan" means a group or
individual Medicare supplement contract issued on or after July 21,
1992, and with an effective date prior to June 1, 2010, and includes
Medicare supplement contracts renewed on or after that date that are
not replaced by the issuer at the request of the enrollee or
subscriber.
(l) "2010 standardized Medicare supplement benefit plan," "2010
standardized benefit plan," or "2010 plan" means a group or
individual Medicare supplement contract issued with an effective date
on or after June 1, 2010.
(m) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
1358.5. (a) A contract shall not be advertised, solicited, or
issued for delivery as a Medicare supplement contract unless the
contract contains definitions or terms that conform to the
requirements of this section.
(1) (A) "Accident," "accidental injury," or "accidental means"
shall be defined to employ "result" language and shall not include
words that establish an accidental means test or use words such as
"external, violent, visible wounds" or other similar words of
description or characterization.
(B) The definition shall not be more restrictive than the
following: "injury or injuries for which benefits are provided means
accidental bodily injury sustained by the covered person that is the
direct result of an accident, independent of disease or bodily
infirmity or any other cause, and occurs while coverage is in force."
(C) The definition may provide that injuries shall not include
injuries for which benefits are provided or available under any
workers' compensation, employer's liability, or similar law, unless
prohibited by law.
(2) "Benefit period" or "Medicare benefit period" shall not be
defined more restrictively than as defined in the Medicare program.
(3) "Convalescent nursing home," "extended care facility," or
"skilled nursing facility" shall not be defined more restrictively
than as defined in the Medicare program.
(4) "Health care expenses" means for purposes of Section 1358.14,
expenses of health care service plans associated with the delivery of
health care services, which expenses are analogous to incurred
losses of insurers.
(5) "Hospital" may be defined in relation to its status,
facilities, and available services or to reflect its accreditation by
the Joint Commission on Accreditation of Hospitals, but not more
restrictively than as defined in the Medicare Program.
(6) "Medicare" shall be defined in the contract. "Medicare" may be
substantially defined as "The Health Insurance for the Aged Act,
Title XVIII of the Social Security Amendments of 1965, as amended,"
or "Title I, Part I of Public Law 89-97, as enacted by the 89th
Congress and popularly known as the Health Insurance for the Aged
Act, as amended," or words of similar import.
(7) "Medicare eligible expenses" shall mean expenses of the kinds
covered by Medicare Parts A and B, to the extent recognized as
reasonable and medically necessary by Medicare.
(8) "Physician" shall not be defined more restrictively than as
defined in the Medicare Program.
(9) (A) "Sickness" shall not be defined more restrictively than as
follows: "sickness means illness or disease of an insured person
that first manifests itself after the effective date of insurance and
while the insurance is in force."
(B) The definition may be further modified to exclude sicknesses
or diseases for which benefits are provided under any workers'
compensation, occupational disease, employer's liability, or similar
law.
(b) Nothing in this section shall be construed as prohibiting any
contract, by definitions or express provisions, from limiting or
restricting any or all of the benefits provided under the contract,
except in-area and out-of-area emergency services, to those health
care services that are delivered by issuer, employed, owned, or
contracting providers, and provider facilities, so long as the
contract complies with the provisions of Sections 1358.14 and 1367
and with Section 1300.67 of Title 28 of the California Code of
Regulations.
(c) Nothing in this section shall be construed as prohibiting any
contract that limits or restricts any or all of the benefits provided
under the contract in the manner contemplated in subdivision (b)
from limiting its obligation to deliver services, and disclaiming any
liability from any delay or failure to provide those services (1) in
the event of a major disaster or epidemic or (2) in the event of
circumstances not reasonably within the control of the issuer, such
as the partial or total destruction of facilities, war, riot, civil
insurrection, disability of a significant part of its health
personnel, or similar circumstances so long as the provisions comply
with the provisions of subdivision (h) of Section 1367.
1358.6. (a) (1) Except for permitted preexisting condition clauses
as described in Sections 1358.7, 1358.8, and 1358.81, a contract
shall not be advertised, solicited, or issued for delivery as a
Medicare supplement contract if the contract contains definitions,
limitations, exclusions, conditions, reductions, or other provisions
that are more restrictive or limiting than that term as officially
used in Medicare, except as expressly authorized by this article.
(2) No issuer may advertise, solicit, or issue for delivery any
Medicare supplement contract with hospital or medical coverage if the
contract contains any of the prohibited provisions described in
subdivision (b).
(b) The following provisions shall be deemed to be unfair,
unreasonable, and inconsistent with the objectives of this chapter
and shall not be contained in any Medicare supplement contract:
(1) Any waiver, exclusion, limitation, or reduction based on or
relating to a preexisting disease or physical condition, unless that
waiver, exclusion, limitation, or reduction (A) applies only to
coverage for specified services rendered not more than six months
from the effective date of coverage, (B) is based on or relates only
to a preexisting disease or physical condition defined no 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, (C) does not apply to
any coverage under any group contract, and (D) is approved in advance
by the director. Any limitations with respect to a preexisting
condition shall appear as a separate paragraph of the contract and be
labeled "Preexisting Condition Limitations."
(2) Except with respect to a group contract subject to, and in
compliance with, Section 1399.62, any provision denying coverage,
after termination of the contract, for services provided continuously
beginning while the contract was in effect, during the continuous
total disability of the subscriber or enrollee, except that the
coverage may be limited to a reasonable period of time not less than
the duration of the contract benefit period, if any, and may be
limited to the maximum benefits provided under the contract.
(c) A Medicare supplement contract in force shall not contain
benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 1358.8, a Medicare supplement contract with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current enrollees and subscribers, at
their option, who do not enroll in Medicare Part D.
(2) A Medicare supplement contract with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement contract
with benefits for outpatient prescription drugs shall not be renewed
after the enrollee or subscriber enrolls in Medicare Part D unless
both of the following conditions exist:
(A) The contract is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
1358.7. A contract shall not be advertised, solicited, or issued
for delivery as a Medicare supplement contract prior to January 1,
2001, unless it meets or exceeds requirements applicable pursuant to
this code that were in effect prior to that date.
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.
1358.81. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
with an effective date on or after June 1, 2010. No contract may be
advertised, solicited, delivered, or issued for delivery in this
state as a Medicare supplement contract unless it complies with these
benefit standards. No issuer may offer any 1990 standardized
Medicare supplement contract for sale with an effective date on or
after June 1, 2010. Benefit standards applicable to Medicare
supplement contracts issued with an effective date before June 1,
2010, remain subject to the requirements of Section 1358.8.
(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 enrollee or
subscriber, other than the nonpayment of prepaid or periodic charges.
(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 prepaid or periodic charges 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 the Medicare supplement contract is terminated by the group
contractholder and is not replaced as provided under subparagraph
(E), the issuer shall offer enrollees or subscribers an individual
Medicare supplement contract which, at the option of the enrollee or
subscriber, does one of the following:
(i) Provides for continuation of the benefits contained in the
group contract.
(ii) Provides for benefits that otherwise meet the requirements of
one of the standardized contracts defined in this article.
(D) If an individual is an enrollee or subscriber in a group
Medicare supplement contract and the individual terminates membership
in the group, the issuer shall do one of the following:
(i) Offer the enrollee or subscriber the conversion opportunity
described in subparagraph (C).
(ii) At the option of the group contractholder, offer the enrollee
or subscriber continuation of coverage under the group contract.
(E) (i) If a group Medicare supplement contract is replaced by
another group Medicare supplement contract purchased by the same
group contractholder, 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.
(ii) If a Medicare supplement contract replaces another Medicare
supplement contract that has been in force for six months or more,
the replacing issuer shall not impose an exclusion or limitation
based on a preexisting condition. If the original coverage has been
in force for less than six months, the replacing issuer shall waive
any time period applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
contract to the extent the time was spent under the original
coverage.
(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 enrollee or subscriber, limited to the
duration of the contract benefit period, if any, or 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 or subscriber for the
period, not to exceed 24 months, in which the enrollee or subscriber
has applied for, and is determined to be entitled to, medical
assistance under Medi-Cal under Title XIX of the federal Social
Security Act, but only if the enrollee or subscriber notifies the
issuer of the contract within 90 days after the date the individual
becomes entitled to assistance. Upon receipt of timely notice, the
insurer shall return directly to the enrollee or subscriber that
portion of the prepaid or periodic charge attributable to the period
of Medi-Cal eligibility, subject to adjustment for paid claims.
(ii) If suspension occurs and if the enrollee or subscriber loses
entitlement to medical assistance under Medi-Cal, the Medicare
supplement contract shall be automatically reinstituted (effective as
of the date of termination of entitlement) as of the termination of
entitlement if the enrollee or subscriber 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 or equivalent coverage
shall be provided if the prior contract is no longer available.
(iii) Each Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended (for any period that may be provided by federal regulation)
at the request of the enrollee or subscriber 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 if 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 of loss of coverage within 90 days after
the date of the loss and pays the applicable prepaid or periodic
charge.
(B) Reinstitution of coverages shall comply with all of the
following requirements:
(i) Not provide for any waiting period with respect to treatment
of preexisting conditions.
(ii) Provide for resumption of coverage that is substantially
equivalent to coverage in effect before the date of suspension.
(iii) Provide for classification of prepaid or periodic charges on
terms at least as favorable to the enrollee or subscriber as the
classification of the prepaid or periodic charge that would have
applied to the enrollee or subscriber had the coverage not been
suspended.
(8) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(9) 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.
(10) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(11) 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.
(12) 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, B, C, D, F, high deductible F, G, M, and N, every
issuer of Medicare supplement benefit plans shall make available a
contract including only the following basic "core" package of
benefits to each prospective enrollee or subscriber. An issuer may
make available to prospective enrollees or subscribers 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 through 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 (PPS) 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 insured
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 department services paid under a prospective
payment system, the copayment amount, of Medicare eligible expenses
under Part B regardless of hospital confinement, subject to the
Medicare Part B deductible.
(6) Coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B, C, D, F, high deductible F, G,
M, and N, consistent with the plan type and benefits for each plan as
provided in Section 1358.91:
(1) With respect to the Medicare Part A deductible, coverage for
100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(2) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(3) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day through the 100th day in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(4) With respect to the Medicare Part B deductible, coverage for
100 percent of the Medicare Part B deductible amount per calendar
year regardless of hospital confinement.
(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 charges 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 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.
1358.9. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
on or after July 21, 1992, and with an effective date prior to June
1, 2010.
(a) An issuer shall make available to each prospective enrollee a
contract form containing only the basic (core) benefits, as defined
in subdivision (b) of Section 1358.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 1358.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to L,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 1358.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 1358.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 1358.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
1358.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, and medically necessary emergency care in a foreign
country as defined in paragraphs (1), (2), (3), and (8) of
subdivision (c) of Section 1358.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and the at-home recovery benefit
as defined in paragraphs (1), (2), (8), and (10) of subdivision (c)
of Section 1358.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and preventive medical care as
defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of
Section 1358.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
1358.8, respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country
as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision
(c) of Section 1358.8, respectively. The annual high deductible plan
F deductible shall consist of out-of-pocket expenses, other than
premiums, for services covered by the Medicare supplement plan F
policy, and shall be in addition to any other specific benefit
deductibles. The annual high deductible Plan F deductible shall be
one thousand five hundred dollars ($1,500) for 1998 and 1999, and
shall be based on the calendar year, as adjusted annually thereafter
by the secretary to reflect the change in the Consumer Price Index
for all urban consumers for the 12-month period ending with August of
the preceding year, and rounded to the nearest multiple of ten
dollars ($10).
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent of the Medicare
Part B excess charges, medically necessary emergency care in a
foreign country, and the at-home recovery benefit as defined in
paragraphs (1), (2), (4), (8), and (10) of subdivision (c) of Section
1358.8, respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
subdivision (c) of Section 1358.8, respectively. The outpatient
prescription drug benefit shall not be included in a Medicare
supplement contract sold on or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care benefit,
and at-home recovery benefit as defined in paragraphs (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The annual high deductible plan J deductible shall
consist of out-of-pocket expenses, other than premiums, for services
covered by the Medicare supplement plan J policy, and shall be in
addition to any other specific benefit deductibles. The annual
deductible shall be one thousand five hundred dollars ($1,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars ($10). The outpatient prescription drug
benefit shall not be included in a Medicare supplement contract sold
on or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
1358.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
1358.8.
(f) An issuer may, with the prior approval of the director, offer
contracts with new or innovative benefits in addition to the benefits
provided in a contract that otherwise complies with the applicable
standards. The new or innovative benefits may include benefits that
are appropriate to Medicare supplement contracts, that are not
otherwise available and that are cost-effective and offered in a
manner that is consistent with the goal of si
1358.1. Every health care service plan that offers any contract
that primarily or solely supplements Medicare or that is advertised
or represented as a supplement to Medicare, shall, in addition to
complying with this chapter and rules of the director, comply with
this article. The basic health care services required to be provided
pursuant to Sections 1345 and 1367 shall not be included in Medicare
supplement contracts subject to this article, to the extent that
California is required to disallow coverage for these health care
services under the federal Medicare supplement standardization
requirements set forth in Section 1882 of the federal Social Security
Act (42 U.S.C.A. Sec. 1395ss).
1358.2. The purpose of this article is to provide for the
reasonable standardization of coverage and simplification of terms
and benefits of Medicare supplement contracts, to facilitate public
understanding and comparison of those contracts, to eliminate
provisions contained in those contracts that may be misleading or
confusing in connection with the purchase of the contracts or with
the settlement of claims, and to provide for full disclosures in the
sale of Medicare supplement contracts to persons eligible for
Medicare.
1358.3. (a) Except as otherwise provided in this section or in
Sections 1358.7, 1358.12, 1358.13, 1358.16, and 1358.21, this article
shall apply to all group and individual Medicare supplement
contracts advertised, solicited, or issued for delivery in this state
on or after January 1, 2001.
(b) This article shall not apply to a contract 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.
(c) This article shall not apply to Medicare supplement policies
or certificates subject to Article 6 (commencing with Section
10192.1) of Chapter 1 of Part 1 of Division 2 of the Insurance Code.
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of bankruptcy and has
ceased doing business in the state.
(c) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(42 U.S.C. Sec. 1395c et seq.) (Medicare).
(C) Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396 et seq.) (Medicaid), other than coverage consisting solely of
benefits under Section 1928 of that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (22 U.S.C. Sec. 2504(e)).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Part 2 of Division 2 of the
Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Sec. 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that 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.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the federal Social Security Act.
(k) "1990 standardized Medicare supplement benefit plan," "1990
standardized benefit plan," or "1990 plan" means a group or
individual Medicare supplement contract issued on or after July 21,
1992, and with an effective date prior to June 1, 2010, and includes
Medicare supplement contracts renewed on or after that date that are
not replaced by the issuer at the request of the enrollee or
subscriber.
(l) "2010 standardized Medicare supplement benefit plan," "2010
standardized benefit plan," or "2010 plan" means a group or
individual Medicare supplement contract issued with an effective date
on or after June 1, 2010.
(m) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
1358.5. (a) A contract shall not be advertised, solicited, or
issued for delivery as a Medicare supplement contract unless the
contract contains definitions or terms that conform to the
requirements of this section.
(1) (A) "Accident," "accidental injury," or "accidental means"
shall be defined to employ "result" language and shall not include
words that establish an accidental means test or use words such as
"external, violent, visible wounds" or other similar words of
description or characterization.
(B) The definition shall not be more restrictive than the
following: "injury or injuries for which benefits are provided means
accidental bodily injury sustained by the covered person that is the
direct result of an accident, independent of disease or bodily
infirmity or any other cause, and occurs while coverage is in force."
(C) The definition may provide that injuries shall not include
injuries for which benefits are provided or available under any
workers' compensation, employer's liability, or similar law, unless
prohibited by law.
(2) "Benefit period" or "Medicare benefit period" shall not be
defined more restrictively than as defined in the Medicare program.
(3) "Convalescent nursing home," "extended care facility," or
"skilled nursing facility" shall not be defined more restrictively
than as defined in the Medicare program.
(4) "Health care expenses" means for purposes of Section 1358.14,
expenses of health care service plans associated with the delivery of
health care services, which expenses are analogous to incurred
losses of insurers.
(5) "Hospital" may be defined in relation to its status,
facilities, and available services or to reflect its accreditation by
the Joint Commission on Accreditation of Hospitals, but not more
restrictively than as defined in the Medicare Program.
(6) "Medicare" shall be defined in the contract. "Medicare" may be
substantially defined as "The Health Insurance for the Aged Act,
Title XVIII of the Social Security Amendments of 1965, as amended,"
or "Title I, Part I of Public Law 89-97, as enacted by the 89th
Congress and popularly known as the Health Insurance for the Aged
Act, as amended," or words of similar import.
(7) "Medicare eligible expenses" shall mean expenses of the kinds
covered by Medicare Parts A and B, to the extent recognized as
reasonable and medically necessary by Medicare.
(8) "Physician" shall not be defined more restrictively than as
defined in the Medicare Program.
(9) (A) "Sickness" shall not be defined more restrictively than as
follows: "sickness means illness or disease of an insured person
that first manifests itself after the effective date of insurance and
while the insurance is in force."
(B) The definition may be further modified to exclude sicknesses
or diseases for which benefits are provided under any workers'
compensation, occupational disease, employer's liability, or similar
law.
(b) Nothing in this section shall be construed as prohibiting any
contract, by definitions or express provisions, from limiting or
restricting any or all of the benefits provided under the contract,
except in-area and out-of-area emergency services, to those health
care services that are delivered by issuer, employed, owned, or
contracting providers, and provider facilities, so long as the
contract complies with the provisions of Sections 1358.14 and 1367
and with Section 1300.67 of Title 28 of the California Code of
Regulations.
(c) Nothing in this section shall be construed as prohibiting any
contract that limits or restricts any or all of the benefits provided
under the contract in the manner contemplated in subdivision (b)
from limiting its obligation to deliver services, and disclaiming any
liability from any delay or failure to provide those services (1) in
the event of a major disaster or epidemic or (2) in the event of
circumstances not reasonably within the control of the issuer, such
as the partial or total destruction of facilities, war, riot, civil
insurrection, disability of a significant part of its health
personnel, or similar circumstances so long as the provisions comply
with the provisions of subdivision (h) of Section 1367.
1358.6. (a) (1) Except for permitted preexisting condition clauses
as described in Sections 1358.7, 1358.8, and 1358.81, a contract
shall not be advertised, solicited, or issued for delivery as a
Medicare supplement contract if the contract contains definitions,
limitations, exclusions, conditions, reductions, or other provisions
that are more restrictive or limiting than that term as officially
used in Medicare, except as expressly authorized by this article.
(2) No issuer may advertise, solicit, or issue for delivery any
Medicare supplement contract with hospital or medical coverage if the
contract contains any of the prohibited provisions described in
subdivision (b).
(b) The following provisions shall be deemed to be unfair,
unreasonable, and inconsistent with the objectives of this chapter
and shall not be contained in any Medicare supplement contract:
(1) Any waiver, exclusion, limitation, or reduction based on or
relating to a preexisting disease or physical condition, unless that
waiver, exclusion, limitation, or reduction (A) applies only to
coverage for specified services rendered not more than six months
from the effective date of coverage, (B) is based on or relates only
to a preexisting disease or physical condition defined no 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, (C) does not apply to
any coverage under any group contract, and (D) is approved in advance
by the director. Any limitations with respect to a preexisting
condition shall appear as a separate paragraph of the contract and be
labeled "Preexisting Condition Limitations."
(2) Except with respect to a group contract subject to, and in
compliance with, Section 1399.62, any provision denying coverage,
after termination of the contract, for services provided continuously
beginning while the contract was in effect, during the continuous
total disability of the subscriber or enrollee, except that the
coverage may be limited to a reasonable period of time not less than
the duration of the contract benefit period, if any, and may be
limited to the maximum benefits provided under the contract.
(c) A Medicare supplement contract in force shall not contain
benefits that duplicate benefits provided by Medicare.
(d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of
Section 1358.8, a Medicare supplement contract with benefits for
outpatient prescription drugs that was issued prior to January 1,
2006, shall be renewed for current enrollees and subscribers, at
their option, who do not enroll in Medicare Part D.
(2) A Medicare supplement contract with benefits for outpatient
prescription drugs shall not be issued on and after January 1, 2006.
(3) On and after January 1, 2006, a Medicare supplement contract
with benefits for outpatient prescription drugs shall not be renewed
after the enrollee or subscriber enrolls in Medicare Part D unless
both of the following conditions exist:
(A) The contract is modified to eliminate outpatient prescription
drug coverage for outpatient prescription drug expenses incurred
after the effective date of the individual's coverage under a
Medicare Part D plan.
(B) The premium is adjusted to reflect the elimination of
outpatient prescription drug coverage at the time of enrollment in
Medicare Part D, accounting for any claims paid if applicable.
1358.7. A contract shall not be advertised, solicited, or issued
for delivery as a Medicare supplement contract prior to January 1,
2001, unless it meets or exceeds requirements applicable pursuant to
this code that were in effect prior to that date.
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.
1358.81. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
with an effective date on or after June 1, 2010. No contract may be
advertised, solicited, delivered, or issued for delivery in this
state as a Medicare supplement contract unless it complies with these
benefit standards. No issuer may offer any 1990 standardized
Medicare supplement contract for sale with an effective date on or
after June 1, 2010. Benefit standards applicable to Medicare
supplement contracts issued with an effective date before June 1,
2010, remain subject to the requirements of Section 1358.8.
(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 enrollee or
subscriber, other than the nonpayment of prepaid or periodic charges.
(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 prepaid or periodic charges 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 the Medicare supplement contract is terminated by the group
contractholder and is not replaced as provided under subparagraph
(E), the issuer shall offer enrollees or subscribers an individual
Medicare supplement contract which, at the option of the enrollee or
subscriber, does one of the following:
(i) Provides for continuation of the benefits contained in the
group contract.
(ii) Provides for benefits that otherwise meet the requirements of
one of the standardized contracts defined in this article.
(D) If an individual is an enrollee or subscriber in a group
Medicare supplement contract and the individual terminates membership
in the group, the issuer shall do one of the following:
(i) Offer the enrollee or subscriber the conversion opportunity
described in subparagraph (C).
(ii) At the option of the group contractholder, offer the enrollee
or subscriber continuation of coverage under the group contract.
(E) (i) If a group Medicare supplement contract is replaced by
another group Medicare supplement contract purchased by the same
group contractholder, 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.
(ii) If a Medicare supplement contract replaces another Medicare
supplement contract that has been in force for six months or more,
the replacing issuer shall not impose an exclusion or limitation
based on a preexisting condition. If the original coverage has been
in force for less than six months, the replacing issuer shall waive
any time period applicable to preexisting conditions, waiting
periods, elimination periods, or probationary periods in the new
contract to the extent the time was spent under the original
coverage.
(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 enrollee or subscriber, limited to the
duration of the contract benefit period, if any, or 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 or subscriber for the
period, not to exceed 24 months, in which the enrollee or subscriber
has applied for, and is determined to be entitled to, medical
assistance under Medi-Cal under Title XIX of the federal Social
Security Act, but only if the enrollee or subscriber notifies the
issuer of the contract within 90 days after the date the individual
becomes entitled to assistance. Upon receipt of timely notice, the
insurer shall return directly to the enrollee or subscriber that
portion of the prepaid or periodic charge attributable to the period
of Medi-Cal eligibility, subject to adjustment for paid claims.
(ii) If suspension occurs and if the enrollee or subscriber loses
entitlement to medical assistance under Medi-Cal, the Medicare
supplement contract shall be automatically reinstituted (effective as
of the date of termination of entitlement) as of the termination of
entitlement if the enrollee or subscriber 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 or equivalent coverage
shall be provided if the prior contract is no longer available.
(iii) Each Medicare supplement contract shall provide that
benefits and prepaid or periodic charges under the contract shall be
suspended (for any period that may be provided by federal regulation)
at the request of the enrollee or subscriber 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 if 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 of loss of coverage within 90 days after
the date of the loss and pays the applicable prepaid or periodic
charge.
(B) Reinstitution of coverages shall comply with all of the
following requirements:
(i) Not provide for any waiting period with respect to treatment
of preexisting conditions.
(ii) Provide for resumption of coverage that is substantially
equivalent to coverage in effect before the date of suspension.
(iii) Provide for classification of prepaid or periodic charges on
terms at least as favorable to the enrollee or subscriber as the
classification of the prepaid or periodic charge that would have
applied to the enrollee or subscriber had the coverage not been
suspended.
(8) A Medicare supplement contract shall not be limited to
coverage for a single disease or affliction.
(9) 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.
(10) A Medicare supplement contract shall additionally meet any
other minimum benefit standards as established by the director.
(11) 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.
(12) 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, B, C, D, F, high deductible F, G, M, and N, every
issuer of Medicare supplement benefit plans shall make available a
contract including only the following basic "core" package of
benefits to each prospective enrollee or subscriber. An issuer may
make available to prospective enrollees or subscribers 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 through 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 (PPS) 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 insured
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 department services paid under a prospective
payment system, the copayment amount, of Medicare eligible expenses
under Part B regardless of hospital confinement, subject to the
Medicare Part B deductible.
(6) Coverage of cost sharing for all Part A Medicare eligible
hospice care and respite care expenses.
(c) The following additional benefits shall be included in
Medicare supplement benefit plans B, C, D, F, high deductible F, G,
M, and N, consistent with the plan type and benefits for each plan as
provided in Section 1358.91:
(1) With respect to the Medicare Part A deductible, coverage for
100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(2) With respect to the Medicare Part A deductible, coverage for
50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period.
(3) With respect to skilled nursing facility care, coverage for
the actual billed charges up to the coinsurance amount from the 21st
day through the 100th day in a Medicare benefit period for
posthospital skilled nursing facility care eligible under Medicare
Part A.
(4) With respect to the Medicare Part B deductible, coverage for
100 percent of the Medicare Part B deductible amount per calendar
year regardless of hospital confinement.
(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 charges 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 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.
1358.9. The following standards are applicable to all Medicare
supplement contracts delivered or issued for delivery in this state
on or after July 21, 1992, and with an effective date prior to June
1, 2010.
(a) An issuer shall make available to each prospective enrollee a
contract form containing only the basic (core) benefits, as defined
in subdivision (b) of Section 1358.8.
(b) No groups, packages, or combinations of Medicare supplement
benefits other than those listed in this section shall be offered for
sale in this state, except as may be permitted by subdivision (f)
and by Section 1358.10.
(c) Benefit plans shall be uniform in structure, language,
designation and format to the standard benefit plans A to L,
inclusive, listed in subdivision (e), and shall conform to the
definitions in Section 1358.4. Each benefit shall be structured in
accordance with the format provided in subdivisions (b), (c), (d),
and (e) of Section 1358.8 and list the benefits in the order listed
in subdivision (e). For purposes of this section, "structure,
language, and format" means style, arrangement, and overall content
of a benefit.
(d) An issuer may use, in addition to the benefit plan
designations required in subdivision (c), other designations to the
extent permitted by law.
(e) With respect to the makeup of benefit plans, the following
shall apply:
(1) Standardized Medicare supplement benefit plan A shall be
limited to the basic (core) benefit common to all benefit plans, as
defined in subdivision (b) of Section 1358.8.
(2) Standardized Medicare supplement benefit plan B shall include
only the following: the core benefit, plus the Medicare Part A
deductible as defined in paragraph (1) of subdivision (c) of Section
1358.8.
(3) Standardized Medicare supplement benefit plan C shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, and medically necessary emergency care in a foreign
country as defined in paragraphs (1), (2), (3), and (8) of
subdivision (c) of Section 1358.8, respectively.
(4) Standardized Medicare supplement benefit plan D shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and the at-home recovery benefit
as defined in paragraphs (1), (2), (8), and (10) of subdivision (c)
of Section 1358.8, respectively.
(5) Standardized Medicare supplement benefit plan E shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, medically necessary
emergency care in a foreign country, and preventive medical care as
defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of
Section 1358.8, respectively.
(6) Standardized Medicare supplement benefit plan F shall include
only the following: the core benefit, plus the Medicare Part A
deductible, the skilled nursing facility care, the Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges, and
medically necessary emergency care in a foreign country as defined in
paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section
1358.8, respectively.
(7) Standardized Medicare supplement benefit high deductible plan
F shall include only the following: 100 percent of covered expenses
following the payment of the annual high deductible plan F
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, the
Medicare Part B deductible, 100 percent of the Medicare Part B excess
charges, and medically necessary emergency care in a foreign country
as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision
(c) of Section 1358.8, respectively. The annual high deductible plan
F deductible shall consist of out-of-pocket expenses, other than
premiums, for services covered by the Medicare supplement plan F
policy, and shall be in addition to any other specific benefit
deductibles. The annual high deductible Plan F deductible shall be
one thousand five hundred dollars ($1,500) for 1998 and 1999, and
shall be based on the calendar year, as adjusted annually thereafter
by the secretary to reflect the change in the Consumer Price Index
for all urban consumers for the 12-month period ending with August of
the preceding year, and rounded to the nearest multiple of ten
dollars ($10).
(8) Standardized Medicare supplement benefit plan G shall include
only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 80 percent of the Medicare
Part B excess charges, medically necessary emergency care in a
foreign country, and the at-home recovery benefit as defined in
paragraphs (1), (2), (4), (8), and (10) of subdivision (c) of Section
1358.8, respectively.
(9) Standardized Medicare supplement benefit plan H shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, basic outpatient
prescription drug benefit, and medically necessary emergency care in
a foreign country as defined in paragraphs (1), (2), (6), and (8) of
subdivision (c) of Section 1358.8, respectively. The outpatient
prescription drug benefit shall not be included in a Medicare
supplement contract sold on or after January 1, 2006.
(10) Standardized Medicare supplement benefit plan I shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, 100 percent of the
Medicare Part B excess charges, basic outpatient prescription drug
benefit, medically necessary emergency care in a foreign country, and
at-home recovery benefit as defined in paragraphs (1), (2), (5),
(6), (8), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(11) Standardized Medicare supplement benefit plan J shall consist
of only the following: the core benefit, plus the Medicare Part A
deductible, skilled nursing facility care, Medicare Part B
deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care, and
at-home recovery benefit as defined in paragraphs (1), (2), (3), (5),
(7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The outpatient prescription drug benefit shall not be
included in a Medicare supplement contract sold on or after January
1, 2006.
(12) Standardized Medicare supplement benefit high deductible plan
J shall consist of only the following: 100 percent of covered
expenses following the payment of the annual high deductible plan J
deductible. The covered expenses include the core benefit, plus the
Medicare Part A deductible, skilled nursing facility care, Medicare
Part B deductible, 100 percent of the Medicare Part B excess charges,
extended outpatient prescription drug benefit, medically necessary
emergency care in a foreign country, preventive medical care benefit,
and at-home recovery benefit as defined in paragraphs (1), (2), (3),
(5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8,
respectively. The annual high deductible plan J deductible shall
consist of out-of-pocket expenses, other than premiums, for services
covered by the Medicare supplement plan J policy, and shall be in
addition to any other specific benefit deductibles. The annual
deductible shall be one thousand five hundred dollars ($1,500) for
1998 and 1999, and shall be based on a calendar year, as adjusted
annually thereafter by the secretary to reflect the change in the
Consumer Price Index for all urban consumers for the 12-month period
ending with August of the preceding year, and rounded to the nearest
multiple of ten dollars ($10). The outpatient prescription drug
benefit shall not be included in a Medicare supplement contract sold
on or after January 1, 2006.
(13) Standardized Medicare supplement benefit plan K shall consist
of only those benefits described in subdivision (d) of Section
1358.8.
(14) Standardized Medicare supplement benefit plan L shall consist
of only those benefits described in subdivision (e) of Section
1358.8.
(f) An issuer may, with the prior approval of the director, offer
contracts with new or innovative benefits in addition to the benefits
provided in a contract that otherwise complies with the applicable
standards. The new or innovative benefits may include benefits that
are appropriate to Medicare supplement contracts, that are not
otherwise available and that are cost-effective and offered in a
manner that is consistent with the goal of si
