Current through Register Vol. 42, No. 5, February 29, 2024
The following standards are applicable to all Medicare
supplement policies or certificates delivered or issued for delivery in this
state on or after March 25, 1996. No policy or certificate may be advertised,
solicited, delivered or issued for delivery in this state as a Medicare
supplement policy or certificate unless it complies with these benefit
standards.
A. General Standards. The
following standards apply to Medicare supplement policies and certificates and
are in addition to all other requirements of this chapter.
(1) A Medicare supplement policy or
certificate shall not exclude or limit benefits for losses incurred more than
six (6) months from the effective date of coverage because it 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
(6) months before the effective date of coverage.
(2) A Medicare supplement policy or
certificate shall not indemnify against losses resulting from sickness on a
different basis than losses resulting from accidents.
(3) A Medicare supplement policy or
certificate 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.
(4) No Medicare supplement policy or
certificate 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.
(5) Each Medicare supplement policy shall be
guaranteed renewable.
(a) The issuer shall not
cancel or nonrenew the policy solely on the ground of health status of the
individual.
(b) The issuer shall
not cancel or nonrenew the policy for any reason other than nonpayment of
premium or material misrepresentation.
(c) If the Medicare supplement policy is
terminated by the group policyholder and is not replaced as provided under Rule
482-1-071-.08 A(5)(e), the issuer shall offer certificateholders an individual
Medicare supplement policy which (at the option of the certificateholder)
(i) Provides for continuation of the benefits
contained in the group policy, or
(ii) Provides for benefits that otherwise
meet the requirements of this subsection.
(d) If an individual is a certificateholder
in a group Medicare supplement policy and the individual terminates membership
in the group, the issuer shall
(i) Offer the
certificateholder the conversion opportunity described in Rule 482-1-071-.08
A(5)(c), or
(ii) At the option of
the group policyholder, offer the certificateholder continuation of coverage
under the group policy.
(e) 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 for preexisting
conditions that would have been covered under the group policy being
replaced.
(f) If a Medicare
supplement policy eliminates an outpatient prescription drug benefit as a
result of requirements imposed by the Medicare Prescription Drug, Improvement
and Modernization Act of 2003, the modified policy shall be deemed to satisfy
the guaranteed renewal requirements of this paragraph.
(g) Rate increases otherwise authorized by
law are not prohibited by this Paragraph (5).
(6) Termination of a Medicare supplement
policy or certificate 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 conditioned 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. Receipt of
Medicare Part D benefits will not be considered in determining a continuous
loss.
(7)
(a) 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
certificateholder for the period (not to exceed twenty-four (24) months) in
which the policyholder or certificateholder 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 certificateholder notifies the issuer of
the policy or certificate within ninety (90) days after the date the individual
becomes entitled to assistance.
(b)
If suspension occurs and if the policyholder or certificateholder loses
entitlement to medical assistance, the policy or certificate shall be
automatically reinstituted effective as of the date of termination of
entitlement if the policyholder or certificateholder provides notice of loss of
entitlement within ninety (90) days after the date of loss and pays the premium
attributable to the period.
(c)
Each Medicare supplement policy shall provide that benefits and premiums under
the policy shall be suspended (for any period that may be provided by federal
regulation) at the request of the policyholder if the policyholder 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 shall
be automatically reinstituted (effective as of the date of loss of coverage) if
the policyholder provides notice of loss of coverage within ninety (90) days
after the date of the loss and pays the premium attributable to the period
effective as of the date of termination of enrollment in the group health
plan.
(d) Reinstitution of
coverages as described in Subparagraphs (b) and (c):
(i) Shall not provide for any waiting period
with respect to treatment of preexisting conditions;
(ii) Shall provide for resumption of coverage
that is substantially equivalent to coverage in effect before the date of
suspension. If the suspended Medicare supplement policy provided coverage for
outpatient prescription drugs, reinstitution of the policy for Medicare Part D
enrollees shall be without coverage for outpatient prescription drugs and shall
otherwise provide substantially equivalent coverage to the coverage in effect
before the date of suspension; and
(iii) Shall provide for classification of
premiums on terms at least as favorable to the policyholder or
certificateholder as the premium classification terms that would have applied
to the policyholder or certificateholder had the coverage not been
suspended.
B. Standards for Basic (Core) Benefits Common
to Benefit Plans A to J. Every issuer shall make available a policy or
certificate including only the following basic "core" package of benefits 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.
(1) Coverage of 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;
(2) Coverage of Part A Medicare eligible
expenses incurred for hospitalization to the extent not covered by Medicare for
each Medicare lifetime inpatient reserve day used;
(3) Upon exhaustion of the Medicare hospital
inpatient coverage, including the lifetime reserve days, coverage of one
hundred percent (100%) of the Medicare Part A eligible expenses for
hospitalization paid at the applicable prospective payment system (PPS) rate,
or other appropriate Medicare standard of payment, subject to a lifetime
maximum benefit of an additional 365 days. The provider shall accept the
issuer's payment as payment in full and may not bill the insured for any
balance;
(4) Coverage under
Medicare Parts A and B for the reasonable cost of the first three (3) pints of
blood (or equivalent quantities of packed red blood cells, as defined under
federal regulations) unless replaced in accordance with federal
regulations;
(5) Coverage for the
coinsurance amount, or in the case of hospital outpatient department services
paid under a prospective payment system, the copayment amount, of Medicare
eligible expenses under Part B regardless of hospital confinement, subject to
the Medicare Part B deductible;
C. Standards for Additional Benefits. The
following additional benefits shall be included in Medicare Supplement Benefit
Plans "B" through "J" only as provided by Rule
482-1-071-.09.
(1) Medicare Part A Deductible: Coverage for
all of the Medicare Part A inpatient hospital deductible amount per benefit
period.
(2) Skilled Nursing
Facility Care: Coverage for the actual billed charges up to the coinsurance
amount from the 21st day through the 100th day in a Medicare benefit period for
post-hospital skilled nursing facility care eligible under Medicare Part
A.
(3) Medicare Part B Deductible:
Coverage for all of the Medicare Part B deductible amount per calendar year
regardless of hospital confinement.
(4) Eighty Percent (80%) of the Medicare Part
B Excess Charges: Coverage for eighty percent (80%) of the difference between
the actual Medicare Part B charge as billed, not to exceed any charge
limitation established by the Medicare program or state law, and the
Medicare-approved Part B charge.
(5) One Hundred Percent (100%) of the
Medicare Part B Excess Charges: Coverage for all of the difference between the
actual Medicare Part B charge as billed, not to exceed any charge limitation
established by the Medicare program or state law, and the Medicare-approved
Part B charge.
(6) Basic Outpatient
Prescription Drug Benefit: Coverage for fifty percent (50%) of outpatient
prescription drug charges, after a $250 calendar year deductible, to a maximum
of $1,250 in benefits received by the insured per calendar year, to the extent
not covered by Medicare. The outpatient prescription drug benefit may be
included for sale or issuance in a Medicare supplement policy until January 1,
2006.
(7) Extended Outpatient
Prescription Drug Benefit: Coverage for fifty percent (50%) of outpatient
prescription drug charges, after a $250 calendar year deductible to a maximum
of $3,000 in benefits received by the insured per calendar year, to the extent
not covered by Medicare. The outpatient prescription drug benefit may be
included for sale or issuance in a Medicare supplement policy until January 1,
2006.
(8) Medically Necessary
Emergency Care in a Foreign Country: Coverage to the extent not covered by
Medicare for eighty percent (80%) of the billed charges for Medicare-eligible
expenses for medically necessary emergency hospital, physician and medical care
received in a foreign country, which care would have been covered by Medicare
if provided in the United States and which care began during the first sixty
(60) consecutive days of each trip outside the United States, subject to a
calendar year deductible of $250, and a lifetime maximum benefit of $50,000.
For purposes of this benefit, "emergency care" shall mean care needed
immediately because of an injury or an illness of sudden and unexpected
onset.
(9)
(a) Preventive Medical Care Benefit: Coverage
for the following preventive health services not covered by Medicare:
(i) An annual clinical preventive medical
history and physical examination that may include tests and services from
Subparagraph (b) and patient education to address preventive health care
measures;
(ii) Preventive screening
tests or preventive services, the selection and frequency of which is
determined to be medically appropriate by the attending physician.
(b) Reimbursement shall be for the
actual charges up to one hundred percent (100%) of the Medicare-approved amount
for each service, as if Medicare were to cover the service as identified in
American Medical Association Current Procedural Terminology (AMA CPT) codes, to
a maximum of $120 annually under this benefit. This benefit shall not include
payment for any procedure covered by Medicare.
(10) At-Home Recovery Benefit: Coverage for
services to provide short term, at-home assistance with activities of daily
living for those recovering from an illness, injury or surgery.
(a) For purposes of this benefit, the
following definitions shall apply:
(i)
"Activities of daily living" include, but are not limited to bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that
are normally self-administered, and changing bandages or other
dressings.
(ii) "Care provider"
means a duly qualified or licensed home health aide or homemaker, personal care
aide or nurse provided through a licensed home health care agency or referred
by a licensed referral agency or licensed nurses registry.
(iii) "Home" shall mean any place used by the
insured as a place of residence, provided that the place would qualify as a
residence for home health care services covered by Medicare. A hospital or
skilled nursing facility shall not be considered the insured's place of
residence.
(iv) "At-home recovery
visit" means the period of a visit required to provide at home recovery care,
without limit on the duration of the visit, except each consecutive four (4)
hours in a twenty-four-hour period of services provided by a care provider is
one visit.
(b) Coverage
Requirements and Limitations.
(i) At-home
recovery services provided must be primarily services which assist in
activities of daily living.
(ii)
The insured's attending physician must certify that the specific type and
frequency of at-home recovery services are necessary because of a condition for
which a home care plan of treatment was approved by Medicare.
(iii) Coverage is limited to:
(I) No more than the number and type of
at-home recovery visits certified as necessary by the insured's attending
physician. The total number of at-home recovery visits shall not exceed the
number of Medicare approved home health care visits under a Medicare approved
home care plan of treatment;
(II)
The actual charges for each visit up to a maximum reimbursement of $40 per
visit;
(III) $1,600 per calendar
year;
(IV) Seven (7) visits in any
one week;
(V) Care furnished on a
visiting basis in the insured's home;
(VI) Services provided by a care provider as
defined in this rule;
(VII) At-home
recovery visits while the insured is covered under the policy or certificate
and not otherwise excluded;
(VIII)
At-home recovery visits received during the period the insured is receiving
Medicare approved home care services or no more than eight (8) weeks after the
service date of the last Medicare approved home health care visit.
(c) Coverage is
excluded for:
(i) Home care visits paid for by
Medicare or other government programs; and
(ii) Care provided by family members, unpaid
volunteers or providers who are not care providers.
D. Standards for Plans
K and L.
(1) Standardized Medicare supplement
benefit plan "K" shall consist of the following:
(a) Coverage of one hundred percent (100%) of
the Part A hospital coinsurance amount for each day used from the 61st through
the 90th day in any Medicare benefit period;
(b) Coverage of one hundred percent (100%) of
the Part A hospital coinsurance amount for each Medicare lifetime inpatient
reserve day used from the 91st through the 150th day in any Medicare benefit
period;
(c) Upon exhaustion of the
Medicare hospital inpatient coverage, including the lifetime reserve days,
coverage of one hundred percent (100%) of the Medicare Part A eligible expenses
for hospitalization paid at the applicable prospective payment system (PPS)
rate, or other appropriate Medicare standard of payment, subject to a lifetime
maximum benefit of an additional 365 days. The provider shall accept the
issuer's payment as payment in full and may not bill the insured for any
balance;
(d) Medicare Part A
Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient
hospital deductible amount per benefit period until the out-of-pocket
limitation is met as described in Subparagraph (j);
(e) Skilled Nursing Facility Care: Coverage
for fifty percent (50%) of the coinsurance amount for each day used from the
21st day through the 100th day in a Medicare benefit period for post-hospital
skilled nursing facility care eligible under Medicare Part A until the
out-of-pocket limitation is met as described in Subparagraph (j);
(f) Hospice Care: Coverage for fifty percent
(50%) of cost sharing for all Part A Medicare eligible expenses and respite
care until the out-of-pocket limitation is met as described in Subparagraph
(j);
(g) Coverage for fifty percent
(50%), under Medicare Part A or B, of the reasonable cost of the first three
(3) pints of blood (or equivalent quantities of packed red blood cells, as
defined under federal regulations) unless replaced in accordance with federal
regulations until the out-of-pocket limitation is met as described in
Subparagraph (j);
(h) Except for
coverage provided in Subparagraph (i) below, coverage for fifty percent (50%)
of the cost sharing otherwise applicable under Medicare Part B after the
policyholder pays the Part B deductible until the out-of-pocket limitation is
met as described in Subparagraph (j) below;
(i) Coverage of one hundred percent (100%) of
the cost sharing for Medicare Part B preventive services after the policyholder
pays the Part B deductible; and
(j)
Coverage of one hundred percent (100%) of all cost sharing under Medicare Parts
A and B for the balance of the calendar year after the individual has reached
the out-of-pocket limitation on annual expenditures under Medicare Parts A and
B of $4000 in 2006, indexed each year by the appropriate inflation adjustment
specified by the Secretary of the U.S. Department of Health and Human
Services.
(2)
Standardized Medicare supplement benefit plan "L" shall consist of the
following:
(a) The benefits described in
Paragraphs (1)(a), (b), (c) and (i);
(b) The benefit described in Paragraphs
(1)(d), (e), (f), (g) and (h), but substituting seventy-five percent (75%) for
fifty percent (50%); and
(c) The
benefit described in Paragraph (1)(j), but substituting $2000 for $4000.
Author: Commissioner of Insurance
Statutory Authority:
Code of Ala.
1975, §§
27-2-17,
27-19-50
et
seq.