AN ACT Relating to nursing home insurance; adding a new chapter to Title 48 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. This chapter may be known and cited as "The nursing home insurance act" and is intended to govern the content and sale of nursing home insurance as defined in this chapter. This chapter shall be liberally construed for the protection of purchasers of nursing home insurance. The provisions of this chapter shall apply in addition to, rather than in place of, other requirements of Title 48 RCW.

NEW SECTION. Sec. 2. Unless the context requires otherwise, the definitions in this section shall apply throughout this chapter:

(1) "Nursing home insurance" or "nursing home insurance insured policy" refers to a group or individual policy or contract which purports to cover any type of nursing home care;

(2) "Applicant" is the person who seeks the purchase of nursing home insurance or, in the case of a group policy or contract, the proposed certificate holder;

(3) "Certificate" means any certificate issued under a group nursing home insurance policy which is regulated by the commissioner.

(4) "Loss ratio" means the incurred claims as a percentage of the earned premium under rules adopted by the commissioner;

(5) "Pre-existing condition" means a covered person's medical condition that caused that person to have received medical advice or treatment during the specified time period prior to the effective date of coverage;

(6) "Disclosure form" means a form designated by the commissioner which discloses, at a minimum, medicare benefits, the level and type of benefits offered by the insurer, and the cost, if any, for which the insured will be responsible;

(7) "Medicare" means Title XVIII of the United States social security act, or its successor program;

(8) "Medicaid" means Title XIX of the United States social security act, or its successor program;

(9) "Nursing home" means a facility as defined in chapter 18.51 RCW; and

(10) "Commissioner" means the state insurance commissioner.

NEW SECTION. Sec. 3. (1) The commissioner shall adopt rules to establish minimum standards for benefits in nursing home insurance policies.

(2) The commissioner shall adopt rules to establish specific standards for nursing home insurance policies. These rules shall include, but are not limited to:

(a) A standard that a nursing home insurance policy has and maintains a minimum benefit period of six months;

(b) Terms of renewability;

(d) Benefit limitations, exceptions, and reductions;

(e) Definitions of terms;

(f) Percentage limitations on periodic increases in renewal costs and premiums; and

(g) Minimum daily benefits, deductibles, and copayments.

NEW SECTION. Sec. 4. (1) The commissioner may adopt reasonable rules that specify prohibited policy provisions not otherwise specifically prohibited by statute, which, in the opinion of the commissioner, are unfair, unjust or unfairly discriminatory to any person insured under, or applicant for, nursing home insurance.

(2) No nursing home insurance policy may use waivers, riders, endorsements or any similar method to limit or reduce coverage or benefits.

(3) No nursing home insurance policy may indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.

(4) No nursing home insurance policy may be canceled or not renewed by an insurer solely on grounds of the deterioration of the health of an insured.

(5) No nursing home insurance policy may include any term which excludes coverage for pre-existing conditions appearing more than one hundred eighty days prior to the effective date of the policy, or more than one hundred eighty days into the term of the policy.

(6) No nursing home insurance policy may:

(a) Limit coverage on the basis of the level of care received in a nursing home;

(b) Limit coverage on the basis of mental health problems including, but not limited to dementia and alzheimer's disease;

(d) Limit coverage on the basis of the type of facility in which nursing home care is received; or

(e) Contain a provision establishing any new waiting period in the event an existing policy or certificate is converted to a new or other form within the same company.

NEW SECTION. Sec. 5. (1) The commissioner shall adopt rules governing the sale of nursing home insurance, and shall adopt rules for the disclosure of nursing home insurance policy provisions.

(2) Each applicant for nursing home insurance shall receive a disclosure form not later than three days prior to the purchase of such insurance.

(3) No nursing home insurance policy may be sold to any person who is receiving or is eligible for medicaid.

(4) Each nursing home insurance policy or certificate shall include a provision, prominently displayed on the first page of the policy form or certificate, stating in substance that the person to whom the policy or certificate is issued shall be permitted to return the policy or certificate within thirty days of its delivery to the person, and have the premium refunded if, after examination of the policy or certificate, the person is not satisfied with it for any reason. An additional ten percent penalty shall be added to any premium refund due which is not paid within thirty days of return of the policy to the insurer or agent. If a person, pursuant to such notice, returns the policy or certificate to the insurer at its home or branch office, or to the agent from whom the policy or certificate was purchased, the policy or certificate shall be void from its inception, and the parties shall be in the same position as if no policy or certificate had been issued.

NEW SECTION. Sec. 6. Any time that completion of a medical history of a person is required in order for an application for a nursing home insurance policy to be accepted, that medical history must be completed by the applicant, a relative of the applicant, a legal guardian of the applicant, or a physician.

NEW SECTION. Sec. 7. Commencing with reports for accounting periods beginning on or after January 1, 1986, all insurers, fraternal benefit societies, health care service contractors, and health maintenance organizations shall, for reporting and recordkeeping purposes, separate data concerning nursing home insurance policies and contracts from data concerning other disability insurance policies and contracts.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 48 RCW.

NEW SECTION. Sec. 9. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 10. The commissioner shall adopt rules implementing the provisions of this act by January 1, 1986.