No insurance policy, subscriber contract, certificate, or evidence
of coverage may be advertised, solicited, or issued for delivery in this state
as a Medicare supplement policy unless the policy, contract, certificate,
or evidence of coverage meets the applicable standards in paragraphs (1) -
(3) of this section. These are minimum standards and do not preclude the inclusion
of other provisions or benefits which are not inconsistent with these standards.
(1) General standards. The following standards apply to Medicare
supplement policies and are in addition to all other requirements of this
subchapter, the Insurance Code, Article 3.74, and any other applicable law.
(A) A Medicare supplement policy shall not exclude or limit
benefits for losses incurred more than six months from the effective date
of coverage because they involved a preexisting condition. The policy or certificate
may 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.
(i) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate, the replacing issuer shall
waive any time periods applicable to preexisting condition waiting periods,
elimination periods, and probationary periods in the new Medicare supplement
policy or certificate to the extent such time was spent under the original
policy.
(ii) If a Medicare supplement policy or certificate replaces
another Medicare supplement policy or certificate which has been in effect
for at least six months, the replacing policy or certificate shall not provide
any time period applicable to preexisting conditions, waiting periods, elimination
periods and probationary periods for benefits.
(iii) If a Medicare supplement policy or certificate is issued
to an applicant who qualifies under §3.3312(b) of this title (relating
to Guaranteed Issue for Eligible Persons) or §3.3324(a) of this title
(relating to Open Enrollment), the issuer shall reduce the period of any preexisting
condition exclusion as required by §3.3312(a)(2) of this title and §3.3324(c)
and (d) of this title.
(B) A Medicare supplement policy may not indemnify against
losses resulting from sickness on a different basis than losses resulting
from accidents.
(C) A Medicare supplement policy shall provide that benefits
designed to cover cost sharing amounts under Medicare will be changed automatically
to coincide with any changes in the applicable Medicare deductible amount
and copayment percentage factors. Premiums may be modified to correspond with
such changes.
(D) No Medicare supplement policy shall provide for termination
of coverage of a spouse solely because of the occurrence of an event specified
for termination of coverage of the insured, other than the nonpayment of premium,
or be cancelled or nonrenewed by the insurer solely on the grounds of deterioration
of health.
(E) Each Medicare supplement policy shall be guaranteed renewable
and shall comply with the provisions of clauses (i) - (iv) of this subparagraph.
(i) The issuer shall not cancel or nonrenew the policy for
any reason other than nonpayment of premium or material misrepresentation.
(ii) If the Medicare supplement policy is terminated by the
group policyholder and is not replaced as provided in clause (iv) of this
subparagraph, the issuer shall offer certificate holders Medicare supplement
coverage which provides benefits as set out in subclauses (I) or (II) of this
clause, as follow:
(I) an individual Medicare supplement policy which (at the
option of the certificate holder):
(-a-) provides for continuation of the benefits contained in
the group policy; or
(-b-) provides for benefits that otherwise meet the requirement
of this subsection; or
(II) continuation of benefits under the group plan until there
are no longer any certificate holders remaining who have opted for continuation
of benefits under the group policy terminated by the policyholder.
(iii) If an individual is a certificate holder in a group Medicare
supplement policy and the individual terminates membership in the group, the
issuer shall:
(I) offer the certificate holder conversion opportunity described
in clause (ii) of this subparagraph; or
(II) at the option of the group policyholder, offer the certificate
holder continuation of coverage under the group policy.
(iv) If a group Medicare supplement policy is replaced by another
group Medicare supplement policy purchased by the same policyholder, the issuer
of the replacement policy shall offer coverage to all persons covered under
the old group policy on its date of termination. Coverage under the new policy
shall not result in any exclusion of preexisting conditions that would have
been covered under the group policy being replaced.
(F) Termination of a Medicare supplement policy shall be without
prejudice to any continuous loss which commenced while the policy was in force,
but the extension of benefits beyond the period during which the policy was
in force may be predicated upon the continuous total disability of the insured,
limited to the duration of the policy benefit period, if any, or payment of
the maximum benefits.
(G) A Medicare supplement policy or certificate shall provide
that benefits and premiums under the policy or certificate shall be suspended
at the request of the policyholder or certificate holder for the period (not
to exceed 24 months) in which the policyholder or certificate holder has applied
for and is determined to be entitled to medical assistance under Title XIX
of the Social Security Act, but only if the policyholder or certificate holder
notifies the issuer of such policy or certificate within 90 days after the
date the individual becomes entitled to such assistance.
(i) If suspension occurs and if the policyholder or certificate
holder loses entitlement to medical assistance, the policy or certificate
shall be automatically reinstituted (effective as of the date of termination
of entitlement) as of the termination of entitlement if the policyholder or
certificate holder provides notice of loss of entitlement within 90 days after
the date of loss and pays the premium attributable to the period, effective
as of the date of termination of entitlement.
(ii) Each Medicare supplement policy or certificate shall provide
that benefits and premiums under the policy or certificate shall be suspended
(for the period provided by federal regulation) at the request of the policyholder
or certificate holder if the policyholder or certificate holder 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 policyholder or certificate
holder loses coverage under the group health plan, the policy or certificate
shall be automatically reinstated (effective as of the date of loss of coverage)
if the policyholder or certificate holder provides notice of loss of coverage
within 90 days after the date of such loss and pays the premium attributable
to the period, effective as of the date of termination of entitlement.
(iii) Reinstitution of such coverages shall provide for the
following:
(I) waiver of any waiting period with respect to treatment
of preexisting conditions;
(II) coverage which is substantially equivalent to coverage
in effect before the date of such suspension; and
(III) classification of premiums on terms at least as favorable
to the policyholder or certificate holder as the premium classification terms
that would have applied to the policyholder or certificate holder had the
coverage not been suspended.
(2) Standards for the basic (core) benefits common to all benefit
plans. Every issuer shall make available a policy or certificate including
only the basic "core" package of benefits described in subparagraphs (A) -
(E) of this paragraph to each prospective insured. An issuer may make available
to prospective insureds any of the other Medicare supplement insurance benefit
plans in addition to the basic core package, but not in lieu of it. The basic
core benefits shall consist of the following:
(A) coverage for Part A Medicare eligible expenses for hospitalization
to the extent not covered by Medicare from the 61st day through the 90th day
in any Medicare benefit period;
(B) coverage for Part A Medicare eligible expenses, to the
extent not covered by Medicare, incurred as daily hospital charges during
use of Medicare lifetime hospital inpatient reserve days;
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