SENATE BILL No. 748

October 18, 2001, Introduced by Senator HAMMERSTROM and referred to the

Committee on Financial Services.

A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending sections 3801, 3807, 3809, 3811, 3815, 3819, and 3829

(MCL 500.3801, 500.3807, 500.3809, 500.3811, 500.3815, 500.3819,

and 500.3829), as added by 1992 PA 84, and by adding sections

3830 and 3830a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 3801. As used in this chapter:

2 (a) "Applicant" means:

3 (i) For an individual medicare supplement policy, the person

4 who seeks to contract for insurance benefits.

5 (ii) For a group medicare supplement policy, the proposed

6 certificate holder.

7 (B) "BANKRUPTCY" MEANS WHEN A MEDICARE+CHOICE ORGANIZATION

8 THAT IS NOT AN INSURER HAS FILED, OR HAS HAD FILED AGAINST IT, A

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1 PETITION FOR DECLARATION OF BANKRUPTCY AND HAS CEASED DOING

2 BUSINESS IN THIS STATE.

3 (C) (b) "Certificate" means any certificate delivered or

4 issued for delivery in this state under a group medicare supple-

5 ment policy.

6 (D) (c) "Certificate form" means the form on which the

7 certificate is delivered or issued for delivery by the insurer.

8 (E) "CONTINUOUS PERIOD OF CREDITABLE COVERAGE" MEANS THE

9 PERIOD DURING WHICH AN INDIVIDUAL WAS COVERED BY CREDITABLE COV-

10 ERAGE, IF DURING THE PERIOD OF THE COVERAGE THE INDIVIDUAL HAD NO

11 BREAKS IN COVERAGE GREATER THAN 63 DAYS.

12 (F) "CREDITABLE COVERAGE" MEANS COVERAGE OF AN INDIVIDUAL

13 PROVIDED UNDER ANY OF THE FOLLOWING:

14 (i) A GROUP HEALTH PLAN.

15 (ii) HEALTH INSURANCE COVERAGE.

16 (iii) PART A OR PART B OF MEDICARE.

17 (iv) MEDICAID OTHER THAN COVERAGE CONSISTING SOLELY OF BENE-

18 FITS UNDER SECTION 1928 OF MEDICAID, 42 U.S.C. 1396s.

19 (v) CHAPTER 55 OF TITLE 10 OF THE UNITED STATES CODE, 10

20 U.S.C. 1071 TO 1109.

21 (vi) A MEDICAL CARE PROGRAM OF THE INDIAN HEALTH SERVICE OR

22 OF A TRIBAL ORGANIZATION.

23 (vii) A STATE HEALTH BENEFITS RISK POOL.

24 (viii) A HEALTH PLAN OFFERED UNDER CHAPTER 89 OF TITLE 5 OF

25 THE UNITED STATES CODE, 5 U.S.C. 8901 TO 8914.

26 (ix) A PUBLIC HEALTH PLAN AS DEFINED IN FEDERAL REGULATION.

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1 (x) HEALTH CARE UNDER SECTION 5(e) OF TITLE I OF THE PEACE

2 CORPS ACT, PUBLIC LAW 87-293, 22 U.S.C. 2504.

3 (G) (d) "Direct response solicitation" means solicitation

4 in which an insurer representative does not contact the applicant

5 in person and explain the coverage available, such as, but not

6 limited to, solicitation through direct mail or through adver-

7 tisements in periodicals and other media.

8 (H) "EMPLOYEE WELFARE BENEFIT PLAN" MEANS A PLAN, FUND, OR

9 PROGRAM OF EMPLOYEE BENEFITS AS DEFINED IN SECTION 3 OF SUBTITLE

10 A OF TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF

11 1974, PUBLIC LAW 93-406, 29 U.S.C. 1002.

12 (I) "INSOLVENCY" MEANS WHEN AN INSURER LICENSED TO TRANSACT

13 THE BUSINESS OF INSURANCE IN THIS STATE HAS HAD A FINAL ORDER OF

14 LIQUIDATION ENTERED AGAINST IT WITH A FINDING OF INSOLVENCY BY A

15 COURT OF COMPETENT JURISDICTION IN THE INSURER'S STATE OF

16 DOMICILE.

17 (J) "INSURER" INCLUDES ANY ENTITY, INCLUDING A HEALTH CARE

18 CORPORATION, DELIVERING OR ISSUING FOR DELIVERY IN THIS STATE

19 MEDICARE SUPPLEMENT POLICIES.

20 (K) (e) "Medicaid" means title XIX of the social security

21 act, chapter 531, 49 Stat. 620, 42 U.S.C. 1396 to 1396f, and

22 1396i to 1396u TITLE XIX OF THE SOCIAL SECURITY ACT, CHAPTER

23 531, 49 STAT. 620, 42 U.S.C. 1396 TO 1396r-6 AND 1396r-8 TO

24 1396v.

25 (l) (f) "Medicare" means title XVIII of the social secur-

26 ity act, chapter 531, 49 Stat. 620, 42 U.S.C. 1395 to 1395b,

27 1395b-2, 1395c to 1395i, 1395i-2 to 1395i-4, 1395j to 1395t,

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1 1395u to 1395w-2, 1395w-4 to 1395zz, and 1395bbb to 1395ccc

2 1395b-6 TO 1395b-7, 1395c TO 1395i, 1395i-2 TO 1395i-5, 1395j TO

3 1395t, 1395u TO 1395w, 1395w-2 TO 1395w-4, 1395w-21 TO 1395w-28,

4 1395x TO 1395yy, AND 1395bbb TO 1395ggg.

5 (M) "MEDICARE+CHOICE PLAN" MEANS A PLAN OF COVERAGE FOR

6 HEALTH BENEFITS UNDER MEDICARE PART C AS DEFINED IN SECTION

7 12-2859 OF PART C OF MEDICARE, 42 U.S.C. 1395w-28, AND INCLUDES

8 ANY OF THE FOLLOWING:

9 (i) COORDINATED CARE PLANS THAT PROVIDE HEALTH CARE SERV-

10 ICES, INCLUDING, BUT NOT LIMITED TO, HEALTH MAINTENANCE ORGANIZA-

11 TION PLANS WITH OR WITHOUT A POINT-OF-SERVICE OPTION, PLANS

12 OFFERED BY PROVIDER-SPONSORED ORGANIZATIONS, AND PREFERRED PRO-

13 VIDER ORGANIZATION PLANS.

14 (ii) MEDICAL SAVINGS ACCOUNT PLANS COUPLED WITH A CONTRIBU-

15 TION INTO A MEDICARE+CHOICE MEDICAL SAVINGS ACCOUNT.

16 (iii) MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLANS.

17 (N) (g) "Medicare supplement buyer's guide" means the doc-

18 ument entitled, "guide to health insurance for people with

19 medicare", developed by the national association of insurance

20 commissioners and the United States department of health and

21 human services or a substantially similar document as approved by

22 the commissioner.

23 (O) (h) "Medicare supplement policy" means an individual

24 or group policy or certificate of insurance that is advertised,

25 marketed, or designed primarily as a supplement to reimbursements

26 under medicare for the hospital, medical, or surgical expenses of

27 persons eligible for medicare and medicare select policies and

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1 certificates under section 3817. Medicare supplement policy does

2 not include a policy or contract of 1 or more employers or labor

3 organizations, or of the trustees of a fund established by 1 or

4 more employers or labor organizations, or both, for employees or

5 former employees, or both, or for members or former members, or

6 both, of the labor organizations.

7 (P) "PACE" MEANS A PROGRAM OF ALL-INCLUSIVE CARE FOR THE

8 ELDERLY AS DESCRIBED IN THE SOCIAL SECURITY ACT.

9 (Q) (i) "Policy form" means the form on which the policy

10 is delivered or issued for delivery by the insurer.

11 (R) "SECRETARY" MEANS THE SECRETARY OF THE UNITED STATES

12 DEPARTMENT OF HEALTH AND HUMAN SERVICES.

13 (S) "SOCIAL SECURITY ACT" MEANS THE SOCIAL SECURITY ACT,

14 CHAPTER 531, 49 STAT. 620.

15 Sec. 3807. Every insurer issuing a medicare supplement

16 insurance policy in this state shall make available a medicare

17 supplement insurance policy that includes a basic core package of

18 benefits to each prospective insured. An insurer issuing a medi-

19 care supplement insurance policy in this state may make available

20 to prospective insureds benefits pursuant to section 3809 that

21 are in addition to, but not instead of, the basic core package.

22 The basic core package of benefits shall include all of the

23 following:

24 (a) Coverage of part A medicare eligible expenses for hospi-

25 talization to the extent not covered by medicare from the 61st

26 day through the 90th day in any medicare benefit period.

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1 (b) Coverage of part A medicare eligible expenses incurred

2 for hospitalization to the extent not covered by medicare for

3 each medicare lifetime inpatient reserve day used.

4 (c) Upon exhaustion of the medicare hospital inpatient cov-

5 erage including the lifetime reserve days, coverage of the medi-

6 care part A eligible expenses for hospitalization paid at the

7 diagnostic related group day outlier per diem or other appropri-

8 ate standard of payment, subject to a lifetime maximum benefit of

9 an additional 365 days.

10 (d) Coverage under medicare parts A and B for the reasonable

11 cost of the first 3 pints of blood or equivalent quantities of

12 packed red blood cells, as defined under federal regulations

13 unless replaced in accordance with federal regulations.

14 (e) Coverage for the coinsurance amount, OR THE COPAYMENT

15 AMOUNT PAID FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES UNDER A

16 PROSPECTIVE PAYMENT SYSTEM, of medicare eligible expenses under

17 part B regardless of hospital confinement, subject to the medi-

18 care part B deductible.

19 Sec. 3809. (1) In addition to the basic core package of

20 benefits required under section 3807, the following benefits may

21 be included in a medicare supplement insurance policy and if

22 included shall conform to section 3811(5)(b) to (j):

23 (a) Medicare part A deductible: coverage for all of the

24 medicare part A inpatient hospital deductible amount per benefit

25 period.

26 (b) Skilled nursing facility care: coverage for the actual

27 billed charges up to the coinsurance amount from the 21st day

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1 through the 100th day in a medicare benefit period for

2 posthospital skilled nursing facility care eligible under medi-

3 care part A.

4 (c) Medicare part B deductible: coverage for all of the

5 medicare part B deductible amount per calendar year regardless of

6 hospital confinement.

7 (d) Eighty percent of the medicare part B excess charges:

8 coverage for 80% of the difference between the actual medicare

9 part B charge as billed, not to exceed any charge limitation

10 established by medicare or state law, and the medicare-approved

11 part B charge.

12 (e) One hundred percent of the medicare part B excess

13 charges: coverage for all of the difference between the actual

14 medicare part B charge as billed, not to exceed any charge limi-

15 tation established by medicare or state law, and the

16 medicare-approved part B charge.

17 (f) Basic outpatient prescription drug benefit: coverage

18 for 50% of outpatient prescription drug charges, after a $250.00

19 calendar year deductible, to a maximum of $1,250.00 in benefits

20 received by the insured per calendar year, to the extent not cov-

21 ered by medicare.

22 (g) Extended outpatient prescription drug benefit: coverage

23 for 50% of outpatient prescription drug charges, after a $250.00

24 calendar year deductible, to a maximum of $3,000.00 in benefits

25 received by the insured per calendar year, to the extent not cov-

26 ered by medicare.

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1 (h) Medically necessary emergency care in a foreign

2 country: coverage to the extent not covered by medicare for 80%

3 of the billed charges for medicare-eligible expenses for medi-

4 cally necessary emergency hospital, physician, and medical care

5 received in a foreign country, which care would have been covered

6 by medicare if provided in the United States and which care began

7 during the first 60 consecutive days of each trip outside the

8 United States, subject to a calendar year deductible of $250.00,

9 and a lifetime maximum benefit of $50,000.00. For purposes of

10 this benefit, "emergency care" means care needed immediately

11 because of an injury or an illness of sudden and unexpected

12 onset.

13 (i) Preventive medical care benefit: Coverage for the fol-

14 lowing preventive health services:

15 (i) An annual clinical preventive medical history and physi-

16 cal examination that may include tests and services from

17 subparagraph (ii) and patient education to address preventive

18 health care measures.

19 (ii) Any 1 or a combination of the following preventive

20 screening tests or preventive services, the frequency of which is

21 considered medically appropriate:

22 (A) Fecal occult blood test and digital DIGITAL rectal

23 examination.

24 (B) Mammogram.

25 (B) (C) Dipstick urinalysis for hematuria, bacteriuria,

26 and proteinuria.

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1 (C) (D) Pure tone, air only, hearing screening test,

2 administered or ordered by a physician.

3 (D) (E) Serum cholesterol screening every 5 years.

4 (E) (F) Thyroid function test.

5 (F) (G) Diabetes screening.

6 (G) (H) Influenza vaccine administered at any appropriate

7 time during the year and tetanus TETANUS and diphtheria booster

8 every 10 years.

9 (H) (I) Any other tests or preventive measures determined

10 appropriate by the attending physician.

11 (j) At-home recovery benefit: coverage for services to pro-

12 vide short term, at-home assistance with activities of daily

13 living for those recovering from an illness, injury, or surgery.

14 At-home recovery services provided shall be primarily services

15 that assist in activities of daily living. The insured's attend-

16 ing physician shall certify that the specific type and frequency

17 of at-home recovery services are necessary because of a condition

18 for which a home care plan of treatment was approved by

19 medicare. Coverage is excluded for home care visits paid for by

20 medicare or other government programs and care provided by family

21 members, unpaid volunteers, or providers who are not care

22 providers. Coverage is limited to:

23 (i) No more than the number of at-home recovery visits cer-

24 tified as necessary by the insured's attending physician. The

25 total number of at-home recovery visits shall not exceed the

26 number of medicare approved home health care visits under a

27 medicare approved home care plan of treatment.

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1 (ii) The actual charges for each visit up to a maximum

2 reimbursement of $40.00 per visit.

3 (iii) One thousand six hundred dollars per calendar year.

4 (iv) Seven visits in any 1 week.

5 (v) Care furnished on a visiting basis in the insured's

6 home.

7 (vi) Services provided by a care provider as defined in this

8 section.

9 (vii) At-home recovery visits while the insured is covered

10 under the insurance policy and not otherwise excluded.

11 (viii) At-home recovery visits received during the period

12 the insured is receiving medicare approved home care services or

13 no more than 8 weeks after the service date of the last medicare

14 approved home health care visit.

15 (k) New or innovative benefits: an insurer may, with the

16 prior approval of the commissioner, offer new or innovative bene-

17 fits in addition to the benefits provided in a policy or certifi-

18 cate that otherwise complies with the applicable standards.

19 These benefits may include benefits that are appropriate to medi-

20 care supplement insurance, new or innovative, not otherwise

21 available, cost-effective, and offered in a manner that is con-

22 sistent with the goal of simplification of medicare supplement

23 policies.

24 (2) Reimbursement for the preventive screening tests and

25 services under subsection (1)(i)(ii) shall be for the actual

26 charges up to 100% of the medicare-approved amount for each test

27 or service, as if medicare were to cover the test or service as

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1 identified in the American medical association current procedural

2 terminology codes, to a maximum of $120.00 annually under this

3 benefit. This benefit shall not include payment for any proce-

4 dure covered by medicare.

5 (3) As used in subsection (1)(j):

6 (a) "Activities of daily living" include, but are not

7 limited to, bathing, dressing, personal hygiene, transferring,

8 eating, ambulating, assistance with drugs that are normally

9 self-administered, and changing bandages or other dressings.

10 (b) "Care provider" means a duly qualified or licensed home

11 health aide/homemaker, personal care aide, or nurse provided

12 through a licensed home health care agency or referred by a

13 licensed referral agency or licensed nurses registry.

14 (c) "Home" means any place used by the insured as a place of

15 residence, provided that it qualifies as a residence for home

16 health care services covered by medicare. A hospital or skilled

17 nursing facility shall not be considered the insured's home.

18 (d) "At-home recovery visit" means the period of a visit

19 required to provide at home recovery care, without limit on the

20 duration of the visit, except each consecutive 4 hours in a

21 24-hour period of services provided by a care provider is 1

22 visit.

23 Sec. 3811. (1) An insurer shall make available to each pro-

24 spective medicare supplement policyholder and certificate holder

25 a policy form or certificate form containing only the basic core

26 benefits as provided in section 3807.

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1 (2) Groups, packages, or combinations of medicare supplement

2 benefits other than those listed in this section shall not be

3 offered for sale in this state except as may be permitted in sec-

4 tion 3809(1)(k).

5 (3) Benefit plans shall contain the appropriate A through J

6 designations, shall be uniform in structure, language, and format

7 to the standard benefit plans in subsection (5), and shall con-

8 form to the definitions in this chapter. Each benefit shall be

9 structured in accordance with sections 3807 and 3809 and list the

10 benefits in the order shown in subsection (5). For purposes of

11 this section, "structure, language, and format" means style,

12 arrangement, and overall content of a benefit.

13 (4) In addition to the benefit plan designations A through J

14 as provided under subsection (5), an insurer may use other desig-

15 nations to the extent permitted by law.

16 (5) A medicare supplement insurance benefit plan shall con-

17 form to 1 of the following:

18 (a) A standardized medicare supplement benefit plan A shall

19 be limited to the basic core benefits common to all benefit plans

20 as defined in section 3807.

21 (b) A standardized medicare supplement benefit plan B shall

22 include only the following: the core benefits as defined in sec-

23 tion 3807 and the medicare part A deductible as defined in sec-

24 tion 3809(1)(a).

25 (c) A standardized medicare supplement benefit plan C shall

26 include only the following: the core benefits as defined in

27 section 3807, the medicare part A deductible, skilled nursing

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1 facility care, medicare part B deductible, and medically

2 necessary emergency care in a foreign country as defined in sec-

3 tion 3809(1)(a), (b), (c), and (h).

4 (d) A standardized medicare supplement benefit plan D shall

5 include only the following: the core benefits as defined in sec-

6 tion 3807, the medicare part A deductible, skilled nursing facil-

7 ity care, medically necessary emergency care in a foreign coun-

8 try, and the at-home recovery benefit as defined in section

9 3809(1)(a), (b), (h), and (j).

10 (e) A standardized medicare supplement benefit plan E shall

11 include only the following: the core benefits as defined in sec-

12 tion 3807, the medicare part A deductible, skilled nursing facil-

13 ity care, medically necessary emergency care in a foreign coun-

14 try, and preventive medical care as defined in section

15 3809(1)(a), (b), (h), and (i).

16 (f) A standardized medicare supplement benefit plan F shall

17 include only the following: the core benefits as defined in sec-

18 tion 3807, the medicare part A deductible, skilled nursing facil-

19 ity care, medicare part B deductible, 100% of the medicare part B

20 excess charges, and medically necessary emergency care in a for-

21 eign country as defined in section 3809(1)(a), (b), (c), (e), and

22 (h). A STANDARDIZED MEDICARE SUPPLEMENT PLAN F HIGH DEDUCTIBLE

23 SHALL INCLUDE ONLY THE FOLLOWING: 100% OF COVERED EXPENSES FOL-

24 LOWING THE PAYMENT OF THE ANNUAL HIGH DEDUCTIBLE PLAN F

25 DEDUCTIBLE. THE COVERED EXPENSES INCLUDE THE CORE BENEFITS AS

26 DEFINED IN SECTION 3807, PLUS THE MEDICARE PART A DEDUCTIBLE,

27 SKILLED NURSING FACILITY CARE, THE MEDICARE PART B DEDUCTIBLE,

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1 100% OF THE MEDICARE PART B EXCESS CHARGES, AND MEDICALLY

2 NECESSARY EMERGENCY CARE IN A FOREIGN COUNTRY AS DEFINED IN SEC-

3 TION 3809(1)(A), (B), (C), (E), AND (H). THE ANNUAL HIGH DEDUCT-

4 IBLE PLAN F DEDUCTIBLE SHALL CONSIST OF OUT-OF-POCKET EXPENSES,

5 OTHER THAN PREMIUMS, FOR SERVICES COVERED BY THE MEDICARE SUPPLE-

6 MENT PLAN F POLICY, AND SHALL BE IN ADDITION TO ANY OTHER SPE-

7 CIFIC BENEFIT DEDUCTIBLES. THE ANNUAL HIGH DEDUCTIBLE PLAN F

8 DEDUCTIBLE IS $1,580.00 FOR CALENDAR YEAR 2001, AND THE SECRETARY

9 SHALL ADJUST IT ANNUALLY THEREAFTER TO REFLECT THE CHANGE IN THE

10 CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS FOR THE 12-MONTH

11 PERIOD ENDING WITH AUGUST OF THE PRECEDING YEAR, ROUNDED TO THE

12 NEAREST MULTIPLE OF $10.00.

13 (g) A standardized medicare supplement benefit plan G shall

14 include only the following: the core benefits as defined in sec-

15 tion 3807, the medicare part A deductible, skilled nursing facil-

16 ity care, 80% of the medicare part B excess charges, medically

17 necessary emergency care in a foreign country, and the at-home

18 recovery benefit as defined in section 3809(1)(a), (b), (d), (h),

19 and (j).

20 (h) A standardized medicare supplement benefit plan H shall

21 include only the following: the core benefits as defined in sec-

22 tion 3807, the medicare part A deductible, skilled nursing facil-

23 ity care, basic outpatient prescription drug benefit, and medi-

24 cally necessary emergency care in a foreign country as defined in

25 section 3809(1)(a), (b), (f), and (h).

26 (i) A standardized medicare supplement benefit plan I shall

27 include only the following: the core benefits as defined in

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1 section 3807, the medicare part A deductible, skilled nursing

2 facility care, 100% of the medicare part B excess charges, basic

3 outpatient prescription drug benefit, medically necessary emer-

4 gency care in a foreign country, and at-home recovery benefit as

5 defined in section 3809(1)(a), (b), (e), (f), (h), and (j).

6 (j) A standardized medicare supplement benefit plan J shall

7 include only the following: the core benefits as defined in sec-

8 tion 3807, the medicare part A deductible, skilled nursing facil-

9 ity care, medicare part B deductible, 100% of the medicare part B

10 excess charges, extended outpatient prescription drug benefit,

11 medically necessary emergency care in a foreign country, preven-

12 tive medical care, and at-home recovery benefit as defined in

13 section 3809(1)(a), (b), (c), (e), (g), (h), (i), and (j). A

14 STANDARDIZED MEDICARE SUPPLEMENT BENEFIT PLAN J HIGH DEDUCTIBLE

15 PLAN SHALL CONSIST OF ONLY THE FOLLOWING: 100% OF COVERED

16 EXPENSES FOLLOWING THE PAYMENT OF THE ANNUAL HIGH DEDUCTIBLE PLAN

17 J DEDUCTIBLE. THE COVERED EXPENSES INCLUDE THE CORE BENEFITS AS

18 DEFINED IN SECTION 3807, PLUS THE MEDICARE PART A DEDUCTIBLE,

19 SKILLED NURSING FACILITY CARE, MEDICARE PART B DEDUCTIBLE, 100%

20 OF THE MEDICARE PART B EXCESS CHARGES, EXTENDED OUTPATIENT PRE-

21 SCRIPTION DRUG BENEFIT, MEDICALLY NECESSARY EMERGENCY CARE IN A

22 FOREIGN COUNTRY, PREVENTIVE MEDICAL CARE BENEFIT AND AT-HOME

23 RECOVERY BENEFIT AS DEFINED IN SECTION 3809(1)(A), (B), (C), (E),

24 (G), (H), (I), AND (J). THE ANNUAL HIGH DEDUCTIBLE PLAN J

25 DEDUCTIBLE SHALL CONSIST OF OUT-OF-POCKET EXPENSES, OTHER THAN

26 PREMIUMS, FOR SERVICES COVERED BY THE MEDICARE SUPPLEMENT PLAN J

27 POLICY, AND SHALL BE IN ADDITION TO ANY OTHER SPECIFIC BENEFIT

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1 DEDUCTIBLES. THE ANNUAL DEDUCTIBLE SHALL BE $1,580.00 FOR

2 CALENDAR YEAR 2001, AND THE SECRETARY SHALL ADJUST IT ANNUALLY

3 THEREAFTER TO REFLECT THE CHANGE IN THE CONSUMER PRICE INDEX FOR

4 ALL URBAN CONSUMERS FOR THE 12-MONTH PERIOD ENDING WITH AUGUST OF

5 THE PRECEDING YEAR, ROUNDED TO THE NEAREST MULTIPLE OF $10.00.

6 Sec. 3815. (1) An insurer that offers a medicare supplement

7 policy shall provide to the applicant at the time of application

8 an outline of coverage and, except for direct response solicita-

9 tion policies, shall obtain an acknowledgment of receipt of the

10 outline of coverage from the applicant. The outline of coverage

11 provided to applicants pursuant to this section shall consist of

12 the following 4 parts:

13 (a) A cover page.

14 (b) Premium information.

15 (c) Disclosure pages.

16 (d) Charts displaying the features of each benefit plan

17 offered by the insurer.

18 (2) IF AN OUTLINE OF COVERAGE IS PROVIDED AT THE TIME OF

19 APPLICATION AND THE MEDICARE SUPPLEMENT POLICY OR CERTIFICATE IS

20 ISSUED ON A BASIS THAT WOULD REQUIRE REVISION OF THE OUTLINE, A

21 SUBSTITUTE OUTLINE OF COVERAGE PROPERLY DESCRIBING THE POLICY OR

22 CERTIFICATE SHALL ACCOMPANY THE POLICY OR CERTIFICATE WHEN IT IS

23 DELIVERED AND SHALL CONTAIN THE FOLLOWING STATEMENT, IN NO LESS

24 THAN 12-POINT TYPE, IMMEDIATELY ABOVE THE COMPANY NAME:

25 NOTICE: READ THIS OUTLINE OF COVERAGE

26 CAREFULLY. IT IS NOT IDENTICAL TO THE

27 OUTLINE OF COVERAGE PROVIDED UPON

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1 APPLICATION AND THE COVERAGE ORIGINALLY

2 APPLIED FOR HAS NOT BEEN ISSUED.

3 (3) (2) An outline of coverage under subsection (1) shall

4 be in the language and format prescribed in this section and in

5 not less than 12-point type. The A through J letter designation

6 of the plan shall be shown on the cover page and the plans

7 offered by the insurer shall be prominently identified. Premium

8 information shall be shown on the cover page or immediately fol-

9 lowing the cover page and shall be prominently displayed. The

10 premium and method of payment mode shall be stated for all plans

11 that are offered to the applicant. All possible premiums for the

12 applicant shall be illustrated. The following items shall be

13 included in the outline of coverage in the order prescribed below

14 and in substantially the following form, as approved by the

15 commissioner:

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1 (Insurer Name)

2 Medicare Supplement Coverage

3 Outline of Medicare Supplement Coverage-Cover Page:

4 Benefit Plan(s)_______ [insert letter(s) of plan(s) being offered]

5 Medicare supplement insurance can be sold in only 10 standard plans PLUS 2 HIGH DEDUCTIBLE

6 PLANS. This chart shows the benefits included in each plan. Every insurer shall make

7 available Plan "A". Some plans may not be available in your state.

8 BASIC BENEFITS: Included in All Plans.

9 Hospitalization: Part A coinsurance plus coverage for 365 additional days after Medicare

10 benefits end.

11 Medical Expenses: Part B coinsurance (20% of Medicare-approved expenses) OR, FOR HOSPITAL

12 OUTPATIENT DEPARTMENT SERVICES UNDER A PROSPECTIVE PAYMENT SYSTEM, APPLICABLE COPAYMENTS.

13 Blood: First three pints of blood each year.

14 ______________________________________________________________________________ ____________

15 | A | B | C | D | E | F | G | H | I | J

16 ______________________________________________________________________________ ____________

17 Basic Benefits | x | x | x | x | x | x | x | x | x | x

18 ______________________________________________________________________________ ____________

19 Skilled Nursing | | | | | | | | | |

20 Co-Insurance | | | x | x | x | x | x | x | x | x

21 ______________________________________________________________________________ ____________

22 Part A Deductible | | x | x | x | x | x | x | x | x | x

23 ______________________________________________________________________________ ____________

24 Part B Deductible | | | x | | | x | | | | x

25 ______________________________________________________________________________ ____________

26 Part B Excess | | | | | | x | x | | x | x

27 | | | | | |100% | 80% | |100% | 100%

28 ______________________________________________________________________________ ____________

29 Foreign Travel | | | | | | | | | |

30 Emergency | | | x | x | x | x | x | x | x | x

31 ______________________________________________________________________________ ____________

32 At-Home Recovery | | | | x | | | x | | x | x

33 ______________________________________________________________________________ ____________

34 | | | | | | | | x | x | x

35 Drugs | | | | | | | |$1,250 |$1,250 |$3,000

36 | | | | | | | |Limit |Limit |Limit

37 ______________________________________________________________________________ ____________

38 Preventive Care | | | | | X | | | | | x

39 ______________________________________________________________________________ ____________

03085'01 *

19

1 PREMIUM INFORMATION

2 We (insert insurer's name) can only raise your premium if we

3 raise the premium for all policies like yours in this state. (If

4 the premium is based on the increasing age of the insured,

5 include information specifying when premiums will change).

6 DISCLOSURES

7 Use this outline to compare benefits and premiums among pol-

8 icies, certificates, and contracts.

9 READ YOUR POLICY VERY CAREFULLY

10 This is only an outline describing your policy's most impor-

11 tant features. The policy is your insurance contract. You must

12 read the policy itself to understand all of the rights and duties

13 of both you and your insurance company.

14 RIGHT TO RETURN POLICY

15 If you find that you are not satisfied with your policy, you

16 may return it to (insert insurer's address). If you send the

17 policy back to us within 30 days after you receive it, we will

18 treat the policy as if it had never been issued and return all of

19 your payments.

20 POLICY REPLACEMENT

21 If you are replacing another health insurance policy, do not

22 cancel it until you have actually received your new policy and

23 are sure you want to keep it.

24 NOTICE

25 This policy may not fully cover all of your medical costs.

26 [For agent issued policies]

03085'01 *

20

1 Neither (insert insurer's name) nor its agents are connected

2 with medicare.

3 [For direct response issued policies]

4 (Insert insurer's name) is not connected with medicare.

5 This outline of coverage does not give all the details of medi-

6 care coverage. Contact your local social security office or con-

7 sult "the medicare handbook" for more details.

8 COMPLETE ANSWERS ARE VERY IMPORTANT

9 When you fill out the application for the new policy, be

10 sure to answer truthfully and completely all questions about your

11 medical and health history. The company may cancel your policy

12 and refuse to pay any claims if you leave out or falsify impor-

13 tant medical information. [If the policy or certificate is guar-

14 anteed issue, this paragraph need not appear.]

15 Review the application carefully before you sign it. Be

16 certain that all information has been properly recorded.

17 [Include for each plan offered by the insurer a chart show-

18 ing the services, medicare payments, plan payments, and insured

19 payments using the same language, in the same order, and using

20 uniform layout and format as shown in the charts that follow. An

21 insurer may use additional benefit plan designations on these

22 charts pursuant to section 3809(1)(k). Include an explanation of

23 any innovative benefits on the cover page and in the chart, in a

24 manner approved by the commissioner. The insurer issuing the

25 policy shall change the dollar amounts each year to reflect cur-

26 rent figures. No more than 4 plans may be shown on 1 chart.]

27 Charts for each plan are as follows:

03085'01 *

21

1 PLAN A

2 MEDICARE (PART A)--HOSPITAL SERVICES--PER BENEFIT PERIOD

3 *A benefit period begins on the first day you receive service as an inpa-

4 tient in a hospital and ends after you have been out of the hospital and

5 have not received skilled care in any other facility for 60 days in a

6 row.

7 _________________________________________________________________________