15.14 Insurance for Senior Citizens and Special Needs Individuals

Medicare Supplements

A Medicare Supplement policy is an individual or group accident and sickness insurance policy, or a subscriber contract issued by a Health Insuring Corporation (HIC), that is primarily intended to supplement Medicare coverage by reimbursing eligible individuals for hospital, medical, or surgical expenses not fully covered by Medicare.

Open Enrollment

The Medicare Supplement open enrollment period lasts for 6 months and begins on the first day of the month in which an individual is both age 65 or older and enrolled in Medicare Part B. During this enrollment period, insurers are prohibited from denying coverage, imposing policy restrictions, or charging higher premiums based on the applicant's health status, medical condition, claims experience, or prior use of health care services.

If an applicant is eligible, submits an application, and has maintained continuous creditable coverage for at least 6 months as of the application date, the insurer may not apply a pre-existing condition exclusion. If the applicant has less than 6 months of continuous creditable coverage, any pre-existing condition exclusion period must be reduced by the amount of prior creditable coverage the applicant has satisfied.

Example: A person applying for a Medicare Supplement policy has 4 months of prior creditable coverage. As a result, any pre-existing condition exclusion may only apply during the first 2 months of the new policy's coverage period.

Insurers are prohibited from engaging in any act or practice that has the purpose or effect of limiting, discouraging, or preventing individuals eligible for open enrollment from purchasing any Medicare Supplement policy or certificate available in the state.

Guaranteed Issue

Individuals who qualify during certain enrollment periods established by law or regulation are entitled to guaranteed issue rights and may not be denied coverage or subjected to pre-existing condition exclusions or limitations. Eligible individuals include those who have lost prior coverage under an employee welfare benefit plan, a Medicare Advantage Plan, or a Program of All-Inclusive Care for the Elderly (PACE) plan.

Guaranteed issue rights remain available for 63 days following the termination of an individual's existing coverage.

Regulations and Required Provisions

Medicare Supplement policies and certificates must comply with the following standards:

• Pre-existing condition exclusions may not extend beyond 6 months after the policy's effective date
  • A pre-existing condition may not be defined more restrictively than a condition for which medical advice was given, or treatment was recommended or received from a physician within the 6 months prior to the effective date of coverage
  • Any pre-existing condition limitation must appear in a separate section of the policy and be clearly identified under the heading “Pre-existing Condition Limitations”
• Benefits payable for losses caused by sickness may not be provided on a different basis than benefits payable for losses caused by accidents
• Policies may not determine benefits using standards such as “usual and customary,” “reasonable and customary,” or similar language
• Benefits designed to cover Medicare cost-sharing amounts must automatically adjust to reflect changes in Medicare deductibles, copayments, and coinsurance amounts
  • Premiums may also be adjusted to correspond with those Medicare changes
• Policies may not provide benefits that duplicate coverage already available under Medicare

Renewal, Termination, and Conversion

All Medicare Supplement policies are required to be guaranteed renewable.

An insurer may not cancel or decline to renew a Medicare Supplement policy under the following conditions:

• Coverage may not be terminated solely due to the insured's health condition
• A policy may only be canceled or nonrenewed for nonpayment of premium or material misrepresentation
• A spouse's coverage may not terminate solely because the insured's coverage ends, except in cases involving nonpayment of premium

Additional protections related to continuation and replacement of Medicare Supplement coverage include the following:

• If a group Medicare Supplement policy is terminated by the group policyholder and not replaced, the insurer must offer individual Medicare Supplement coverage to all certificate holders
• If an individual ends membership in a group covered under a Medicare Supplement policy, the insurer must provide the individual with the option to either convert to an individual Medicare Supplement policy or continue existing coverage
• If a group Medicare Supplement policy is replaced by another group Medicare Supplement policy purchased by the same policyholder, the replacing insurer must make coverage available to all persons insured under the previous policy on the date the prior coverage terminated
• The replacement coverage may not impose pre-existing condition exclusions for conditions that were covered under the policy being replaced

Termination of a Medicare Supplement policy or certificate does not eliminate benefits for a continuous loss that began while the policy was active. However, continuation of benefits beyond the termination date may be conditioned on one of the following:

• The insured remaining continuously and totally disabled, subject to the policy's benefit period; or
• Exhaustion of the policy's maximum benefit amount

Note: Receipt of Medicare Part D prescription drug benefits is not taken into account when determining whether a continuous loss exists.

Reasonable Benefits in Relation to Premiums Charged

Medicare Supplement policies must provide benefits that are reasonably related to the premiums charged to policyholders. The Superintendent establishes minimum loss ratio standards using incurred claims experience and earned premiums in accordance with accepted actuarial principles and practices.

Suspension of Coverage

A Medicare Supplement policy must permit the policyholder to suspend both coverage benefits and premium payments for up to 24 months if the policyholder becomes eligible for medical assistance. The policyholder must request the suspension within 90 days after becoming eligible for the assistance program.

If a policyholder becomes ineligible for medical assistance during the suspension period, the Medicare Supplement policy must be automatically reinstated, provided the policyholder notifies the insurer within 90 days after the assistance ends and pays any required premium. The reinstated coverage becomes effective on the date the medical assistance eligibility ended.

Reinstatement of Coverage

• The reinstated policy may not include any waiting period for pre-existing conditions
• Coverage restored under the policy must be substantially equivalent to the coverage in effect prior to the suspension
• Premium classifications must be restored on terms at least as favorable as those that would have applied had the policy never been suspended

Any rider or endorsement added to a Medicare Supplement policy after the original issue date, upon reinstatement, or at renewal that reduces or removes benefits or coverage must be accepted in writing by the insured. Written acceptance is not required if the insurer:

• Has a written request from the insured authorizing the change
• Exercises a specifically reserved right under the Medicare Supplement policy, other than a right to reduce or eliminate benefits or coverage
• Must reduce or eliminate benefits to prevent duplication of Medicare benefits

Minimum Benefit Standards

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) created new requirements for Medicare Supplement policies issued or delivered to individuals who became newly eligible for Medicare on or after January 1, 2020.

Medicare Supplement Plan A provides the basic core benefits and is limited to the following coverages:

• Coverage of Medicare Part A eligible hospital expenses not paid by Medicare for days 61 through 90 of a Medicare benefit period
• Coverage of Medicare Part A eligible hospital expenses for each Medicare lifetime inpatient reserve day used that is not covered by Medicare
• After all Medicare inpatient hospital coverage, including lifetime reserve days, has been exhausted, coverage of 100% of Medicare Part A eligible hospitalization expenses at the applicable Prospective Payment System (PPS) rate or other approved Medicare payment standard, subject to a lifetime maximum of 365 additional days
• Coverage under Medicare Parts A and B for the reasonable cost of the first 3 pints of blood
• Coverage of Medicare Part B coinsurance for Medicare-eligible expenses, regardless of hospital confinement, subject to the Medicare Part B deductible
• Coverage of all Medicare Part A hospice care and respite care cost-sharing amounts

Effective January 1, 2020, Medicare Supplement plans sold to individuals who are newly eligible for Medicare may no longer include coverage for the Medicare Part B deductible. Consequently, only Plans A, B, D, G, High Deductible G, K, L, M, and N are available to newly eligible beneficiaries. Individuals who purchased, or were eligible to purchase, Medicare Supplement Plans C or F before January 1, 2020 are permitted to retain their existing coverage under those plans.

Plan Benefits	A	B	D	G	K	L	M	N	C*	F*
Part A Coinsurance	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓
Hospital Costs (Up to 365 days)	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓
Part B Coinsurance or Copay	✓	✓	✓	✓	50%	75%	✓	✓	✓	✓
Blood (1st 3 pints)	✓	✓	✓	✓	50%	75%	✓	✓	✓	✓
Part A Hospice Care Coinsurance or Copay	✓	✓	✓	✓	50%	75%	✓	✓	✓	✓
Skilled Nursing Coinsurance			✓	✓	50%	75%	✓	✓	✓	✓
Part A Deductible		✓	✓	✓	50%	75%	50%	✓	✓	✓
Part B Deductible									✓	✓
Part B Excess Charges				✓						✓
Foreign Travel Emergency (Up to Plan Limits)			✓	✓			✓	✓	✓	✓

• Plans C and F are available only to individuals first eligible for Medicare before 2020.

Prohibitions Against Genetic Information

Genetic Information: Information concerning an individual's genetic tests, the genetic tests of family members, and the manifestation of diseases or disorders among family members. Genetic information also includes requests for, or receipt of, genetic services, as well as participation in clinical research involving genetic services. For a pregnant individual, genetic information includes the genetic information of the fetus. When reproductive technology is used, it also includes the genetic information of any embryo legally possessed by the individual or a family member.

The term does not include information related to an individual's age or gender.

Genetic Services: Genetic testing, genetic counseling — including the obtaining, interpretation, or evaluation of genetic information — and genetic education services.

Genetic Test: An analysis of human DNA, RNA, chromosomes, proteins, or metabolites used to identify genotypes, mutations, or chromosomal alterations.

A Medicare Supplement policy may not be denied, restricted, or rated based solely on an individual's genetic information.

Insurers may not request or require an individual or a family member to undergo a genetic test. However, insurers are permitted to obtain and use the results of a genetic test when making a payment determination in accordance with HIPAA requirements. In such cases, only the minimum amount of information necessary to fulfill the intended purpose may be requested.

Insurers may request, but may not require, an insured to undergo a genetic test if all of the following conditions are satisfied:

• The request is made in connection with research that complies with human subject protection requirements
• The insurer clearly states that participation in the genetic test is voluntary and that refusal to participate will not affect enrollment status, premiums, or contribution amounts

An insurer may not request, require, or purchase genetic information for underwriting purposes.

Marketing materials include any type of communication that provides information to current or prospective enrollees.

An issuer, either directly or through its producers, is required to:

• Establish marketing procedures to ensure that policy comparisons made by agents or producers are fair and accurate
• Implement marketing practices designed to prevent the sale or issuance of excessive insurance coverage
• Prominently display the following notice on the first page of the policy: “Notice to buyer: This policy may not cover all of your medical expenses.”
• Ask and make every reasonable effort to determine whether a prospective applicant or enrollee already has sickness and accident insurance coverage, including the type and amount of that coverage

The following acts and practices are prohibited:

• Twisting — Knowingly making misleading statements or comparisons regarding insurance policies or insurers in order to persuade an individual to terminate, surrender, lapse, borrow against, or replace an existing policy with coverage from another insurer
• High Pressure Tactics — Using marketing methods that pressure an individual into purchasing insurance through actual or implied force, fear, threats, or undue influence. Examples include soliciting individuals in common areas such as parking lots, sidewalks, hallways, lobbies, and through telephone solicitation
• Cold Lead Advertising — Using any marketing method that does not clearly and conspicuously disclose that the purpose of the communication is the solicitation of insurance and that contact will be made by an insurance producer or insurance company. Examples include door-to-door solicitation and leaving flyers, leaflets, or door hangers at residences or on vehicles

Marketing and advertising materials may not create the impression that a Medicare Supplement policy is affiliated with, sponsored by, or connected to the federal government or any federal agency. All solicitation, advertising, and marketing materials must include the following disclaimer, or substantially similar language: “Not connected with or endorsed by the U.S. government or the federal Medicare program.”

Agents or brokers may not use titles such as “counselor,” “advisor,” or similar designations when dealing with associations or groups of Medicare-eligible individuals in a way that conceals the fact that they are acting as insurance agents or brokers soliciting insurance products.

Marketing materials may not encourage or attempt to persuade an applicant or prospective applicant to sign any blank application, form, or other document.

In addition to any other applicable penalties, the Superintendent may issue an order requiring an issuer that violates these regulations to stop marketing any Medicare Supplement policy or certificate in this state that is directly or indirectly connected to the violation.

Advertisements

Each insurer is required to maintain a complete file of all printed, published, or prepared advertisements at its principal or home office for a period of 4 years.

As part of its annual report, each insurer must certify that all advertisements used during the preceding year complied with applicable insurance laws and regulations. Advertisements must be truthful and may not be misleading, either directly or by implication. The content and format of policy advertisements must be sufficiently clear and complete to prevent deception.

All advertisements must clearly identify the insurer by name. If a specific individual policy is being advertised, the policy must also be identified by its form number or by another appropriate description.

An advertisement intended to be viewed or heard outside the jurisdiction in which the insurer is licensed may not imply that the insurer is licensed beyond the limits of that jurisdiction.

No advertisement may state or imply that a policy or an insurer’s financial condition has been approved or endorsed by a governmental agency or program unless such approval is actually true.

An advertisement may not contain unfair, misleading, or incomplete comparisons of another insurer’s policies or benefits, and may not disparage a competitor’s policies, services, business practices, or methods of operation.

An advertisement may not state or imply that only a limited number of policies will be sold, or that sales of a particular policy will end at a specified time due to special advantages offered by the policy, unless such statements are factually accurate.

Testimonials used in advertisements must:

• Be authentic and truthful
• Reflect the author’s current opinion or experience
• Relate directly to the policy being advertised
• Be reproduced accurately and without misleading alterations

Advertisements for benefits payable only upon confinement in a hospital or similar facility may not use terms such as “tax free,” “extra cash,” “extra income,” “extra pay,” or similar language that could mislead consumers into believing they can financially profit from hospitalization.

An advertisement for a policy that covers only one disease or a limited list of specified diseases may not suggest or imply coverage beyond the actual terms and limitations of the policy.

An advertisement for a policy that provides benefits only for specified illnesses, such as cancer, or only for specified accidents, such as automobile accidents, must clearly disclose the limited scope of coverage in prominent type. The disclosure must use language substantially similar to the following: “THIS IS A LIMITED POLICY.”

If an advertisement constitutes an invitation to contract and references a benefit amount, the period during which benefits are payable, the cost of the policy, a specific policy benefit, or the type of loss covered, the advertisement must also clearly disclose any exceptions, reductions, or limitations that affect the policy’s basic provisions.

Advertisements may not suggest or imply that prospective purchasers will become part of a group entitled to special rates or privileges typically associated with group insurance coverage.

A copy of every Medicare Supplement advertisement, whether in written or electronic form, must be submitted to the Superintendent for review and approval. If the advertisement is not disapproved within 30 days after filing, it will be considered approved.

If a celebrity’s image or voice is used in an advertisement, the advertisement must disclose that the celebrity was compensated for endorsing or promoting the policy.

In radio and television advertisements, the disclosure must be spoken by the celebrity. In print advertisements, the disclosure must appear in at least 12-point type and be enclosed within a black-lined box.

Solicitation of Medicare Supplements

It is considered an unfair or deceptive act to create the impression that a Medicare Supplement insurance program offered by a company or agent is affiliated with, endorsed by, or sponsored by the federal government, the Social Security Administration, the Centers for Medicare & Medicaid Services (CMS), or the Department of Health and Human Services (HHS). All solicitation, advertising, and marketing materials used within the state must include the following disclaimer, or substantially similar language: “Not connected with or endorsed by the U.S. government or the federal Medicare program.”

The following unsolicited contacts with Medicare-eligible individuals are prohibited:

• Door-to-door solicitation, including leaving materials such as leaflets, flyers, or door hangers at a residence, or placing flyers or leaflets on a person’s vehicle
• Approaching prospective applicants in common areas such as parking lots, hallways, lobbies, sidewalks, or similar locations
• Telephonic or electronic solicitation, including voicemail messages, text messages, or direct social media messages

The restrictions on unsolicited marketing do not apply to mass communication advertising, such as direct mail campaigns, or to unsolicited contacts with prospective applicants when the entity or insurance agent already has an established business relationship with the individual, regardless of the communication method used. The following acts are also prohibited:

• An agent representing themselves as a “counselor,” “advisor,” or using a similar title for an association or group of Medicare-eligible individuals in a manner that obscures the agent’s actual role in soliciting or selling insurance
• Inducing or attempting to induce an applicant or prospective applicant to sign any blank form, application, or other document

The following information must be clearly disclosed by the agent both verbally and in writing:

• That the individual conducting the solicitation or sale is an insurance agent
• That the solicitation or sale is being made on behalf of one or more insurance companies, which must be specifically identified to the Medicare-eligible individual
• That the Medicare-eligible individual may verify the required information by contacting the Ohio Department of Insurance
• That the Medicare-eligible individual may contact the agent at the address and telephone number provided by the agent
• That the Medicare-eligible individual may contact the insurance company or companies on whose behalf the solicitation or sale is being made using the address and telephone number provided by the agent
• That neither the agent nor the insurance company is connected with, affiliated with, or sponsored by the federal or state government, the Social Security Administration, the Centers for Medicare & Medicaid Services (CMS), or the Department of Health and Human Services (HHS)
• That, if the Medicare-eligible individual purchases a Medicare Supplement policy, they have the option to pay premiums directly to the insurance company
• Any inaccurate, misleading, or deceptive description of the benefits provided under either the Medicare program or the Medicare Supplement policy being offered for sale
• Any attempt by an insurance company or agent to arrange a solicitation or sales interview by suggesting or implying that the company or agent has been authorized by the federal government, the Medicare program, or the Social Security Administration to contact the applicant or prospective applicant for the purpose of reviewing, changing, or discussing existing insurance coverage. This prohibition also applies to any statement or action implying that the company or agent has access to official records of the federal government, the Medicare program, or the Social Security Administration relating to the applicant’s insurance coverage
• The use of any title, initials, or trade name by an agent that suggests or implies affiliation with, sponsorship by, or authorization from the federal government, the Medicare program, or the Social Security Administration. This restriction also applies to trade names used by individual agents

Right to Return (Free Look)

Medicare Supplement policies and certificates must provide a 30-day free-look period during which the policy may be returned for a full refund of premium. Notice of this right must be prominently displayed on or attached to the first page of the policy. The insured may return the policy for any reason if dissatisfied, and the insurer must provide any applicable refund directly to the applicant within a reasonable time.

Buyer's Guide

A Buyer’s Guide, titled “Guide to Health Insurance for People with Medicare,” must be provided at the time of application. The guide must be presented whenever an application is taken for a health insurance policy, regardless of whether the policy is advertised, solicited, or issued as a Medicare Supplement policy.

Direct response issuers must provide the Buyer’s Guide to the applicant upon request, but no later than the time the policy is delivered.

Permitted Compensation Arrangements

The maximum commission payable during the first policy year may not exceed 200% of the commission paid for renewals in the second year. Renewal commissions for all subsequent years must be equal to the second-year renewal commission and must continue for a minimum of 5 renewal years.

Notice of Change

An issuer must provide notice to policyholders of any modifications to Medicare Supplement policies no later than 30 days before the annual effective date of changes to Medicare benefits.

The notice must include a description of the revisions made to the Medicare program as well as an explanation of each modification made to the Medicare Supplement policy.

Each policyholder must be notified of the timing of any premium adjustment resulting from changes to Medicare.

Notices may not include, or be accompanied by, any form of solicitation or marketing material.

Outline of Coverage

An outline of coverage must be provided to the applicant at the time of application. The outline of coverage must include the following:

• A description of the policy’s principal benefits and coverages
• A statement describing the renewal provisions, including any reserved right of the issuer to change premiums, as well as disclosure of any automatic premium increases based on the age of the policyholder or certificate holder
• A statement explaining that the outline of coverage is only a summary of the policy issued or applied for, and that the actual policy should be reviewed to determine the governing contractual provisions

Replacement

Application forms will include questions designed to determine whether the Medicare Supplement policy being solicited will replace existing Medicare Supplement coverage, Medicare Advantage, Medicaid coverage, or another health insurance policy.

A Medicare Supplement policy that replaces a similar existing policy must waive any pre-existing condition limitations, waiting periods, elimination periods, or probationary periods to the extent those requirements were already satisfied under the original policy. If the original policy was in force for at least 6 months, the replacement policy may not impose any pre-existing condition limitations or waiting, elimination, or probationary periods.

When it is determined that a sale will involve the replacement of existing Medicare Supplement coverage, the applicant must be provided with a notice regarding the replacement before the policy is delivered. The notice must be signed by both the applicant and the agent, and each party must receive a copy. In direct response sales, the notice must be provided at the time the policy is issued.

Multiple Policies

On or before March 1 of each year, an issuer must report to the Superintendent the following information for each individual resident of this state who has more than one Medicare Supplement policy or certificate in force with the issuer. The information must be grouped by policyholder and include:

• Policy or certificate number
• Date of issuance
• Whether the coverage is a Medicare Select policy

A Medicare Select policy is a type of Medicare Supplement policy or certificate that includes restricted network provisions. A restricted network provision is any policy provision that makes payment of benefits, in whole or in part, dependent upon the use of network providers.

Issuers of Medicare Select policies must file a proposed plan of operation with the Superintendent. The plan of operation must include the following:

• Evidence demonstrating that all covered services subject to restricted network provisions are available and reasonably accessible through network providers
• A statement or map clearly describing the policy’s service area
• A description of the grievance procedures that will be used
• A description of the quality assurance program
• A list and description of network providers, organized by specialty

A Medicare Select insurer must file any proposed changes to its plan of operation with the Superintendent before implementing those changes, except for changes involving the list of network providers. Proposed changes will be considered approved after 30 days unless the Superintendent specifically disapproves them.

A Medicare Select policy or certificate may not limit or deny payment for covered services received from a non-network provider if:

• The services are needed to treat symptoms requiring emergency care or are immediately necessary due to an unforeseen illness, injury, or medical condition; and
• It would not be reasonable to obtain the services through a network provider

A Medicare Select policy or certificate must provide full payment for covered services when those services are not available through network providers.

A Medicare Select insurer must provide each applicant with full and fair disclosure of the provisions, restrictions, and limitations of the Medicare Select policy or certificate. The disclosure must include at least the following:

• An outline of coverage sufficient to allow the applicant to compare the coverage and premiums of the proposed Medicare Select policy or certificate with other Medicare Supplement or Medicare Select policies
• A description of the network providers, including primary care physicians, specialists, hospitals, and other participating providers
• A description of the restricted network provisions, including how coinsurance and deductibles are paid when non-network providers are used
• A description of coverage for emergency care, urgently needed care, and services received outside the service area
• A description of any limitations regarding referrals to network providers or other providers
• A description of the policyholder’s right to purchase any other Medicare Supplement policy or certificate offered by the insurer

Before a Medicare Select policy or certificate may be sold, the applicant must sign and date a statement acknowledging receipt of the required disclosure information.

A Medicare Select issuer must establish and maintain procedures for receiving complaints and resolving written grievances submitted by subscribers. These procedures must be designed to encourage mutually agreeable resolutions and may include the use of arbitration procedures.

An individual currently covered under a Medicare Select policy may purchase a Medicare Supplement policy from the same insurer that provides comparable or lesser benefits and does not include restricted network provisions. If the Medicare Select policy has been in force for at least 6 months, the insurer may not require evidence of insurability for the new Medicare Supplement policy.

Medicare Select policies and certificates must include provisions for continuation of coverage if the Secretary of Health and Human Services determines that the Medicare Select program should be discontinued because of the program’s failure or a substantial amendment to the program.

Connector Models

The Medicare Connector is a service available to Medicare-eligible participants of the Ohio Public Employees Retirement System (OPERS) who are enrolled in Medicare Parts A and B. Medicare Connectors assist participants in finding and enrolling in individual Medicare plans that supplement Original Medicare coverage. They also answer questions regarding current medical or prescription drug plans, coordinate three-way calls with insurance carriers to review billing information, assist with setting up online accounts, and explain the reimbursement request process.

Once a consumer enrolls in a medical plan through the Medicare Connector, a monthly allowance is deposited into a Health Reimbursement Arrangement (HRA). The amount of the allowance is based on the insured’s years of qualifying service and the age at which they first enrolled in the Ohio Public Employees Retirement System (OPERS) health care plan. Included within the allowance is a $2.33 monthly administrative fee deducted from the HRA balance. OPERS provides the HRA allowance on a tax-free basis because the arrangement is a tax-advantaged plan that reimburses only qualified medical expenses. Retirees must first pay eligible expenses out of pocket and then submit a request for reimbursement through the HRA plan.