FINAL BILL REPORT
HB 2317
C 300 L 02
Synopsis as Enacted
Brief Description: Making technical changes to Title 48 RCW.
Sponsors: By Representatives Cooper and Benson; by request of Insurance Commissioner.
House Committee on Financial Institutions & Insurance
Senate Committee on Health & Long‑Term Care
Background:
Medigap Insurance Regulation: Medicare is a federally funded health insurance program administered by the federal Center for Medicaid and Medicare Services (CMS), formerly known as the Health Care Financing Administration. Medicare benefits are available to those who are 65 years of age or over, some disabled persons who are under 65 years of age, and those persons with end‑stage kidney disease.
Though Medicare generally pays most of the costs of health care, there are some costs and medical services that are not covered by the program. Accordingly, private insurers offer supplemental insurance policies to cover the costs not subject to coverage under Medicare. These supplemental policies are formally referred to as "Medigap" policies, in reference to their function of filling the various gaps in Medicare coverage. There are 10 standardized Medigap plans offered by private insurers, each of which provides a different set of standard benefits.
The State Insurance Commissioner regulates the private insurance market with respect to the Medigap plans. However, state regulations must meet minimum standards established by the CMS and must be consistent with the pertinent federal law and regulations. The CMS has identified areas of state law regarding medicare supplemental insurance that do not comply with federal requirements. Specifically, state law fails to regulate insurers regarding the issuance of Medigap policies to those persons whose supplemental plans have been discontinued or who have been terminated from an existing plan. Also, state law does not address certain issues relating to an insurer's consideration of an insured's preexisting health conditions during the process of replacing one Medigap policy with another.
Complaint Procedures: The insurance code contains two separate sets of procedures by which health insurers are required to handle complaints from insureds. The original procedures, enacted in 1995, apply to both insureds health care providers. The more recent procedures, enacted in 2000, apply only to insureds and consist of comprehensive rules that health insurers must follow regarding grievances received from insureds. The two sets of procedures are redundant and contain inconsistent provisions.
Annual Shareholder Meetings: An incorporated domestic insurer is required to hold its annual shareholder/member meeting in either January, February, March, or April.
Summary:
Medigap Policies: Subject to certain conditions, an insurer cannot deny a medicare supplement policy to an eligible person who has previously been enrolled in a specified supplemental plan that has been discontinued or terminated. To be eligible, the person must apply for the supplemental coverage from the insurer not later than 63 days after the date the previous plan was discontinued. In issuing such a policy to an eligible person, an insurer must offer a price that does not discriminate against the insured due to health status or health history, and cannot exclude benefits due to any preexisting condition.
Medigap Coverage/Preexisting Conditions: Under certain circumstances, insurers are prohibited from limiting the coverage of an insured under a medicare supplement replacement policy because of an insured's preexisting condition. This regulation applies only if the policy being replaced had been in effect for at least three months.
Complaint Procedures: Health insurers must handle complaints from insureds in accordance with the grievance procedures enacted in 2000. References to insureds are deleted from the 1995 complaint procedures statute, thus making that statute applicable only to complaints from health insurance providers.
Annual Meetings: The requirement that incorporated domestic insurers hold annual meetings of shareholders/members in specified months is eliminated. Annual shareholder meetings may be held at any time and place specified in the bylaws.
Citation Corrections: Statutory citations are corrected in laws pertaining to midwives.
Votes on Final Passage:
House960
Senate440
Effective: June 13, 2002