AB 1543

Bill Subjects

Abstract

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) , provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires plans and insurers that issue Medicare supplement contracts or policies, as defined, to comply with specified requirements. The federal Medicare Improvements for Patients and Providers Act of 2008 requires states to adopt, by September 24, 2009, certain modernization changes to Medicare supplement policies made in a specified model law developed by the National Association of Insurance Commissioners. In addition, the federal Genetic Information Nondiscrimination Act of 2008, prohibits an issuer of a Medicare supplemental policy from denying or conditioning the issuance or effectiveness of the policy, and from discriminating in the pricing of the policy, on the basis of genetic information, as specified. The act further prohibits an issuer of a Medicare supplemental policy from, among other things, requesting or requiring an individual or a family member of that individual to undergo a genetic test, as specified. The act requires states to make changes needed to conform to these requirements by July 1, 2009. This bill would make those conforming changes and would adopt the modernization changes made in the model law developed by the National Association of Insurance Commissioners. Existing law entitles individuals to an annual open enrollment period, commencing with the individual's birthday, during which time the individual may purchase any Medicare supplement contract or policy that offers benefits equal to or lesser than those provided by the previous coverage, as specified. This bill would identify the Medicare supplement plans, based on the modernization changes described above, that provide equal coverage for purposes of this provision. Existing law provides that a person is eligible for the guaranteed issue of a Medicare supplement contract or policy if the person is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan either terminates or ceases to provide all of those supplemental health benefits. This bill would provide that a person is eligible for the guaranteed issue of a Medicare supplement contract or policy if the person is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare and either the plan terminates or ceases to provide all of those supplemental health benefits or the employer no longer provides the individual with insurance that covers all of the payment for the 20% coinsurance. Existing law prohibits an issuer from denying or conditioning the issuance of a Medicare supplement contract or policy because of, among other things, the health status of the applicant during certain open enrollment periods, as specified. Existing law prohibits an issuer from requiring or requesting health information from an applicant who is guaranteed Medicare supplement coverage and from requiring or requesting that applicant to sign a form required by the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) . Existing law requires the application form to include a statement that the applicant is not required to provide health information or sign a form required by HIPAA during a period of guaranteed issuance. This bill would prohibit an issuer from requiring, requesting, or obtaining health information from an applicant who is guaranteed issuance of, or open enrollment for, Medicare supplement coverage, except as specified, and would require the application form to include a statement that the applicant is not required to provide health information during a period where guaranteed issue or open enrollment applies. Existing law provides that an individual enrolled in Medicare Part B is entitled to open enrollment for Medicare supplement coverage upon being notified that he or she is no longer eligible for benefits under the Medi-Cal program. This bill would also make an individual enrolled in Medicare Part B entitled to open enrollment if he or she is only eligible for Medi-Cal benefits with a share of cost and he or she certifies, at the time of application, that he or she has not met the share of cost. Because a willful violation of the bill's requirements with respect to health care service plans would be a crime, the bill would impose a state-mandated local program. This bill would make other conforming, technical, and related changes. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as an urgency statute.