AN ACT Relating to
preexisting condition limitations in medicare supplement policies or
certificates; amending RCW 48.66.020 and 48.66.130; and adding a new section to
chapter 48.66 RCW.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 48.66.020 and 1992 c
138 s 1 are each amended to read as follows:
Unless the context
clearly requires otherwise, the definitions in this section apply throughout
this chapter.
(1) "Medicare
supplemental insurance" or "medicare supplement insurance
policy" refers to a group or individual policy of disability insurance or
a subscriber contract of a health care service contractor, a health maintenance
organization, or a fraternal benefit society, which relates its benefits to
medicare, or which 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. Such term does not
include:
(a) A policy or
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 combination thereof,
or for members or former members, or combination thereof, of the labor organizations;
or
(b) A policy issued
pursuant to a contract under Section 1876 or Section 1833 of the federal social
security act (42 U.S.C. Sec. 1395 et seq.), or an issued policy under a
demonstration project authorized pursuant to amendments to the federal social
security act; or
(c) Insurance policies
or health care benefit plans, including group conversion policies, provided to
medicare eligible persons, that are not marketed or held to be medicare
supplement policies or benefit plans.
(2) "Medicare"
means the "Health Insurance for the Aged Act," Title XVIII of the
Social Security Amendments of 1965, as then constituted or later amended.
(3) "Medicare
eligible expenses" means health care expenses of the kinds covered by
medicare, to the extent recognized as reasonable and medically necessary by
medicare.
(4)
"Applicant" means:
(a) In the case of an
individual medicare supplement insurance policy or subscriber contract, the
person who seeks to contract for insurance benefits; and
(b) In the case of a
group medicare supplement insurance policy or subscriber contract, the proposed
certificate holder.
(5)
"Certificate" means any certificate delivered or issued for delivery
in this state under a group medicare supplement insurance policy.
(6) "Loss ratio"
means the incurred claims as a percentage of the earned premium computed under
rules adopted by the insurance commissioner.
(7) "Preexisting
condition" means a covered person's medical condition that caused that
person to have received medical advice or treatment during a specified time
period immediately prior to the effective date of coverage.
(8) "Disclosure
form" means the form designated by the insurance commissioner which
discloses medicare benefits, the supplemental benefits offered by the insurer,
and the remaining amount for which the insured will be responsible.
(9) "Issuer"
includes insurance companies, health care service contractors, health
maintenance organizations, fraternal benefit societies, and any other entity
delivering or issuing for delivery ((in this state)) medicare supplement
policies or certificates to a resident of this state.
Sec. 2. RCW 48.66.130 and 1992 c
138 s 9 are each amended to read as follows:
(1) ((No later than
July 1, 1992)) On or after January 1, 1996, and notwithstanding any
other provision of Title 48 RCW, a medicare supplement policy or certificate
shall not exclude or limit benefits for losses incurred more than ((six))
three months from the effective date of coverage because it involved a
preexisting condition.
(2) ((No later than
July 1, 1992)) On or after January 1, 1996, a medicare supplement
policy or certificate shall not define a preexisting condition more
restrictively than as a condition for which medical advice was given or
treatment was recommended by or received from a physician, or other health
care provider acting within the scope of his or her license, within ((six))
three months before the effective date of coverage.
(3) If a medicare
supplement insurance policy or certificate contains any limitations with
respect to preexisting conditions, such limitations must appear as a separate
paragraph of the policy or certificate and be labeled as "Preexisting
Condition Limitations."
NEW SECTION. Sec.
3. A new section is added
to chapter 48.66 RCW to read as follows:
Every issuer of a
medicare supplement insurance policy or certificate providing coverage to a
resident of this state issued on or after January 1, 1996, shall:
(1) Issue coverage
under its standardized benefit plans B, C, D, E, F, and G without evidence of
insurability to any resident of this state who is eligible for both medicare
hospital and physician services by reason of age or by reason of disability or
end-stage renal disease, if the medicare supplement policy replaces another
medicare supplement standardized benefit plan policy or certificate B, C, D, E,
F, or G, or other more comprehensive coverage than the replaced policy;
(2) Issue coverage
under its standardized plans A, H, I, and J without evidence of insurability to
any resident of this state who is eligible for both medicare hospital and
physician services by reason of age or by reason of disability or end-stage
renal disease, if the medicare supplement policy replaces another medicare
supplement policy or certificate which is the same standardized plan as the
replaced policy; and
(3) Set rates only on a
community-rated basis. Premiums shall be equal for all policyholders and
certificate holders under a standardized medicare supplement benefit plan form,
except that an issuer may develop no more than two rating pools that
distinguish between an insured's eligibility for medicare by reason of:
(a) Age; or
(b) Disability or
end-stage renal disease.
