This bulletin applies to all health insurers that offer Medicare supplement and Medicare replacement coverage.
Overview
The Medicare Prescription Drugs, Improvement, and Modernization Act of 2003 (MMA) required that the National Association of Insurance Commissioners (NAIC) adopt model language for implementing the MMA. The NAIC Medicare Supplement Insurance Minimum Standards Model Act was adopted September 8, 2004. Wisconsin has adopted the provisions of the NAIC Model Regulations to the extent they apply to Wisconsin Medicare supplement and Medicare replacement policies.
The intent of this bulletin is to provide basic information to Medicare supplement, Medicare select, and Medicare cost (Medigap) insurers of the changes to Wisconsin's Medicare supplement rule, s. Ins 3.39, Wis. Adm. Code.
Wisconsin is one of three states that received a waiver of the federal standardization requirements required by the Omnibus Budget Reconciliation Act (OBRA) of 1990 that required all new Medicare supplement policies sold to comply with standardized benefit packages. Wisconsin as a waived state offers to Medicare beneficiaries Medicare supplement, Medicare select, and Medicare cost policies with core benefits and optional riders. Wisconsin does not offer the standardized Medicare supplement Plans A - L.
The major changes to Wisconsin's Medicare supplement rule include amendments that:
- Create two new cost-sharing Medicare supplement plans,
- Create two new cost-sharing Medicare select plans,
- Eliminate outpatient prescription drug coverage under Medicare supplement, Medicare select, and Medicare cost policies after December 31, 2005,
- Prohibit the sale of outpatient prescription drug coverage under Medicare supplement, Medicare select, and Medicare cost policies after December 31, 2005,
- Allow individuals to renew and maintain the outpatient prescription drug coverage in their existing Medicare supplement and Medicare replacement policies, if they choose not to apply for Medicare Part D coverage,
- Prohibit insurers from marketing after January 1, 2006 existing high deductible policies, but allows for renewal of these policies,
- Change Medicare+Choice to Medicare Advantage, and
- Make other changes to the proposed rule to clarify and comply with the NAIC model regulation.
The following is a brief description of the major changes to Wisconsin's Medicare supplement rule.
Section Ins 3.39 (3), Wis. Adm. Code, regarding definitions
Renumbers the definitions in the rule and adds terms, including Advertisement, Benefit period, CMS, Hospital, Insolvency, Medicare Advantage plan, MMA, and PACE. It amends the definition of "Secretary."
Section Ins 3.39 (4) (a), Wis. Adm. Code, regarding policy and certificate requirements
s. Ins 3.39 (4) (a) 6, Wis. Adm. Code, requires that the Medigap policy or certificate provide that termination of the policy or certificate shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss.
s. Ins 3.39 (4) (a) 12, Wis. Adm. Code, clarifies that Medicare supplement and Medicare replacement policies or certificates are required to contain a provision describing grievance rights under s. 632.83, Stats.
s. Ins 3.39 (4) (a) 18 r. b, Wis. Adm. Code, clarifies that for the Medigap policy that was suspended at the request of the policyholder who was entitled to medical assistance, the Medigap policy or certificate shall provide for resumption of coverage that was in effect before the date of suspension. However, if the suspended Medigap policy provided coverage for outpatient prescription drugs, reinstitution of the policy 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.
Section Ins 3.39 (4) (a) 20 and 21, Wis. Adm. Code, regarding benefits for outpatient prescription drugs
s. Ins 3.39 (4) (a) 20, Wis. Adm. Code, was created to provide that Medigap policies with benefits for outpatient prescription drugs in existence prior to January 1, 2006, shall be renewed for current policyholders at their option if these policyholders do not enroll in Medicare Part D. Medigap policies with benefits for outpatient prescription drugs shall not be issued after December 31, 2005. After December 31, 2005, Medigap policies with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless the policies are modified to eliminate coverage of the outpatient prescription drug expenses incurred after the effect date of coverage under Medicare Part D and the premiums are adjusted appropriately to reflect elimination of the coverage.
s. Ins 3.39 (4) (a) 21, Wis. Adm. Code, was created to provide that if Medicare supplement or Medicare cost policies eliminate outpatient prescription drug benefits as a result of requirements imposed by the MMA, the modified policies shall be deemed to satisfy the guaranteed renewal requirements of subd. 5.
Section Ins 3.39 (4m), Wis. Adm. Code, regarding open enrollment
s. Ins 3.39 (4m) (b), Wis. Adm. Code, clarifies that preexisting condition limitations do not apply to a qualified applicant who submits an application prior to or during the six-month period beginning with the first month in which an individual first enrolled under Medicare Part B or the month in which an individual turns age 65 for any individual who first enrolled in Medicare Part B when under age 65, and who as of the date of application had a continuous period of creditable coverage of at least six months. For a qualified applicant with a continuous period of creditable coverage of less than six months, the insurer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. Preexisting condition limitations also do not apply to an individual eligible for guaranteed issue under sub. (34).
Section Ins 3.39 (5) (c), Wis. Adm. Code, regarding required coverages
s. Ins 3.39 (5) (c) 6, Wis. Adm. Code, clarifies that the skilled nursing care mandate under s. 632.895 (3), Wis. Stat., shall be in addition to the required coverage under Medicare Part A, and payment of the Medicare Part A copayment for Medicare eligible skilled nursing care shall not count as satisfying the coverage requirement of at least 30 days of non-Medicare eligible skilled nursing care under s. 632.895 (3), Wis. Stat.
s. Ins 3.39 (5) (c) 12, Wis. Adm. Code, clarifies that upon exhaustion of all Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of all Medicare Part A expenses for hospitalization not covered by Medicare to the extent the hospital is permitted to charge by federal law and regulation and subject to the Medicare reimbursement rate.
s. Ins 3.39 (5) (c) 13, Wis. Adm. Code, requires prior to January 1, 2006, payment in full for all usual and customary expenses for treatment of diabetes required by s. 632.895 (6), Wis. Stat. After December 31, 2005, payment shall be in accordance with s. 632.895 (6), Wis. Stat., including non-prescription equipment and supplies for the treatment of diabetes, but not including any other outpatient prescription medications. Issuers are not required to duplicate expenses paid by Medicare.
s. Ins 3.39 (5) (c) 14, Wis. Adm. Code, requires coverage for preventive care services not covered by Medicare and as determined to be medically appropriate by an attending physician. These benefits shall be included in the basic policy. Reimbursement shall be for the actual charges up to 100% of the Medicare approved amount for each service, as if Medicare were to cover the service, as identified in the American Medical Association Current Procedural Terminology (AMA CPT) codes, to a minimum of $120 annually. This benefit shall not include payment for any procedure covered by Medicare.
s. Ins 3.39 (5) (c) 15, Wis. Adm. Code, provides that the state-mandated catastrophic prescription drug benefit may be included in only those Medigap policies issued before January 1, 2006.
Section Ins 3.39 (5) (i), Wis. Adm. Code, regarding permissible additional coverage
s. Ins 3.39 (5) (i) (intro.), Wis. Adm. Code, provides that for basic Medicare supplement coverage, issuers shall ensure that the permissible additional coverage offered as separate riders is compliant with the MMA.
s. Ins 3.39 (5) (I) 7, Wis. Adm. Code, provides that the optional outpatient prescription drug rider may only be offered for issuance or sale until January 1, 2006, in accordance with the MMA.
Section Ins 3.39 (5) (k) and (m), Wis. Adm. Code, regarding high deductible plans
Provides that policies that were categorized and approved as high deductible and high deductible drug plans under s. Ins 3.39 (5) (k) and (m), Wis. Adm. Code, may be issued only prior to December 31, 2005, or renewed thereafter in accordance with sub. (29) (b) 1. The high deductible drug plan may only be renewed in accordance with sub. (4) (a) 20.
Section Ins 3.39 (5) (n) and (o), and (30) (q) and (r), Wis. Adm. Code, create Medicare 50% and 25% cost-sharing plans and Medicare select 50% and 25% cost-sharing plans
s. Ins 3.39 (5) (n) 2 and 3, (o) 2 and 3, (30) (q) 2 and 3, and (r) 2 and 3, Wis. Adm. Code, provide coverage of 100% of the Medicare Part A hospital coinsurance amount for each day used from 61st through the 90th day and for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
s. Ins 3.39 (5) (n) 4, (o) 4, (30) (q) 4, and (r) 4, Wis. Adm. Code, provide that upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
s. Ins 3.39 (5) (n) 5, (o) 5, (30) (q) 5, and (r) 5, Wis. Adm. Code, provide coverage for 50% or 75% of the Medicare Part A inpatient hospital deductible until the out-of-pocket limitation is met.
s. Ins 3.39 (5) (n) 6, (o) 6, (30) (q) 6, and (r) 6, Wis. Adm. Code, provide coverage for 50% or 75% 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.
s. Ins 3.39 (5) (n) 7 and 8, (o) 7 and 8, (30) (q) 7 and 8, and (r) 7 and 8, Wis. Adm. Code, provide coverage for 50% or 75% cost sharing for hospice care and the first three pints of blood until the out-of-pocket limitation is met.
s. Ins 3.39 (5) (n) 9, (o) 9, (30) (q) 9, and (r) 9, Wis. Adm. Code, provide coverage for 50% or 75% of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Medicare Part B deductible until the out-of-pocket limitation is met.
s. Ins 3.39 (5) (n) 10, (o) 10, (30) (q) 10, and (r) 10, Wis. Adm. Code, provide coverage of 100% of the cost sharing for the benefits [Wisconsin mandates] described in pars. (c) 1, 5, 6, 8, 13, 16, and 17, and (I) 2, to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder pays the Medicare Parts A and B deductibles and meets the out-of-pocket limitation described under subd. 12.
s. Ins 3.39 (5) (n) 11, (o) 11, (30) (q) 11, and (r) 11, Wis. Adm. Code, provide coverage of 100% of the cost-sharing for Medicare Part B preventive services after the policyholder pays the Medicare Part B deductible.
s. Ins 3.39 (5) (n) 12, (o) 12, (30) (q) 12, and (r) 12, Wis. Adm. Code, provide coverage of 100% of all cost-sharing under Medicare Part A or Part 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 ($4,000 for 50% cost-sharing plans or $2,000 for 25% cost-sharing plans) in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary.
Section Ins 3.39 (30), Wis. Adm. Code, regarding Medicare select policies
s. Ins 3.39 (30) (i) 3, Wis. Adm. Code, provides that expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in Medicare select 50% and 25% cost-sharing plans.
s. Ins 3.39 (30) (p) 8, Wis. Adm. Code, provides that the mandatory catastrophic prescription drug coverage may only be included in Medicare select policies issued before January 1, 2006.
s. Ins 3.39 (30) (s), Wis. Adm. Code, provides that the permissible additional outpatient prescription drug rider may be offered by issuance or sale until January 1, 2006.
Section Ins 3.39 (7), Wis. Adm. Code, regarding Medicare cost policies
s. Ins 3.39 (7) (a), Wis. Adm. Code, is recreated to allow insurers that market Medicare cost policies to offer basic Medicare cost coverage after January 1, 2005. The CMS has indicated that Medicare cost insurers provide basic Medicare cost policies that supplement only those benefits covered by Medicare, not benefits mandated under Wisconsin insurance law.
s. Ins 3.39 (7) (b), Wis. Adm. Code, provides that basic Medicare policies and enhanced Medicare cost policies provide disenrollment rights.
s. Ins 3.39 (7) (c), Wis. Adm. Code, provides that enhanced Medicare cost policies shall contain Wisconsin mandated benefits as described in sub. (5) (c), the riders described in sub. (5) (i) and other coverages as authorized by CMS.
s. Ins 3.39 (7) (d), Wis. Adm. Code, provides that the marketing of Medicare cost policies shall comply with the requirements of Medicare supplement policies contained in subs. (15), (21), (24) and (25). The outline of coverage listed in Appendix 1 and the replacement form specified in Appendix 5 shall be modified to accurately reflect the benefit, exclusions, and other requirements that differ from Medicare supplement policies.
Section Ins 3.39 (14) (a), Wis. Adm. Code, regarding other requirements
Allows insurers to offer a Medicare supplement policy, a Medicare select policy, a Medicare cost, and a group Medicare supplement policy with any accompanying riders.
Section Ins 3.39 ( 22) (i), Wis. Adm. Code, regarding required disclosure provisions
Provides that issuers shall comply with any notice requirements of the MMA.
Section Ins 3.39 (23) (a), Wis. Adm. Code, regarding requirements for application forms and replacement coverage
s. Ins 3.39 (23) (a) 4, Wis. Adm. Code, provides for an amended statement in the application form or a supplementary form that if after purchasing a policy, the insured becomes eligible for Medicaid, the insured may suspend Medigap coverage for 24 months. The suspended policy or if no longer available, a substantially equivalent policy may be reinstituted if requested within 90 days of losing Medicaid eligibility. If the suspended policy provided coverage for outpatient prescription drugs and the insured enrolled in Medicare Part D while the policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage.
s. Ins 3.39 (23) (a) 5, Wis. Adm. Code, is created to provide notice in the application that if an individual is enrolled in a Medigap policy by reason of disability and later becomes covered by an employer or union-based group health plan, the Medigap policy may be suspended. If the individual later loses the group health plan, the suspended Medigap policy, or if it is no longer available, a substantially equivalent policy will be reinstituted if requested within 90 days of losing the group health plan. If the Medigap policy provided coverage for outpatient prescription drugs and the individual enrolled in Medicare Part D while the policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage.
s. Ins 3.39 (23) (a) 6, Wis. Adm. Code, is renumbered and includes and introduction and revised questions in the application form or a supplementary form in order to determine eligibility for guaranteed issue.
Section Ins 3.39 (29), Wis. Adm. Code, regarding filing and approval requirements
s. Ins 3.39 (29) (b) (intro.), Wis. Adm. Code, provides that issuers shall file with the commissioner any new riders or amendments to policy or certificate forms to delete coverage for outpatient prescription drugs as required by the MMA.
s. Ins 3.39 (29) (b) 1.., Wis. Adm. Code, provides that beginning January 1, 2007, issuers shall replace existing amended policies and riders for current and renewing enrollees with filed and approved policy or certificate forms that are compliant with the MMA. An issuer shall, beginning January 1, 2007, use filed and approved policy or certificate forms that are compliant with the MMA for all new business.
Section Ins 3.39 (34), Wis. Adm. Code, regarding guaranteed issue for eligible persons
s. Ins 3.39 (34) (a) 1, Wis. Adm. Code, adds language that provides that guaranteed issue eligible persons include those individuals who, where applicable, submit evidence of enrollment in Medicare Part D.
s. Ins 3.39 (34) (b) 1r., Wis. Adm. Code, provides that guaranteed issue rights apply to individuals covered by employee welfare benefit plans who terminate this coverage to enroll in a Medicare Advantage plan, but disenroll from the Medicare Advantage plan within 12 months of enrollment. These individuals are eligible for a Medicare supplement policy along with any riders available or a Medicare select policy, except the outpatient prescription drug rider. [s. Ins 3.39 (34) (e) 1., Wis. Adm. Code]
s. Ins 3.39 (34) (b) 7, Wis. Adm. Code, provides that eligible individuals include those who enroll in Medicare Part D during the initial enrollment period and at the time were enrolled under a Medigap policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medigap policy and submits evidence of enrollment in Medicare Part D along with the application for a policy. These individuals are eligible for a Medicare supplement or Medicare select policy available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with the outpatient prescription drug coverage. [s. Ins 3.39 (34) (e) 4., Wis. Adm. Code]
s. Ins 3.39 (34) (b) 8, Wis. Adm. Code, provides that eligible individuals include those eligible for benefits under Medicare Parts A and B and covered under the medical assistance program who subsequently lose eligibility in the medical assistance program. These individuals are eligible for a Medicare supplement policy, along with any riders available or a Medicare select policy. [s. Ins 3.39 (34) (e) 3., Wis. Adm. Code]
s. Ins 3.39 (34) (c) 1, Wis. Adm. Code, clarifies that the guaranteed issue time period applies to an individual enrolled under a employee welfare benefit plan that is primary to Medicare and the plan terminates or ceases to provide some or all health benefits to the individual because the individual leaves the plan.
s. Ins 3.39 (34) (c) 1. a, Wis. Adm. Code, clarifies that if a notice of termination or cessation of some or all supplemental health benefits is not received, the guaranteed issue time period begins the date the individual receives notice that a claim has been denied because of a termination or cession.
s. Ins 3.39 (34) (c) 2, Wis. Adm. Code, provides that the guaranteed issue time period applies to an individual eligible for benefits under Medicare Parts A and B and covered under the medical assistance program who subsequently loses eligibility in the medical assistance program.
s. Ins 3.39 (34) (c) 4, Wis. Adm. Code, provides that for an individual covered by an employee welfare benefit plan who terminates coverage under the plan to enroll in a Medicare Advantage plan as described in par. (b) 1r., and who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date.
s. Ins 3.39 (34) (c) 5, Wis. Adm. Code, provides that for an eligible individual who enrolls in Medicare Part D during the initial open enrollment period, the guaranteed issue time period begins on the date the individual receives notice pursuant to Section 1882 (v) (2) (B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Medicare Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.
s. Ins 3.39 (34) (e) 4 and 5, Wis. Adm. Code, clarify that products to which an eligible person is entitled include Medicare cost policies along with any enhancements and riders that are offered and are available for issuance to new enrollees by the same issuer that issued the individual's Medicare cost policy, and identifies the eligible persons.
s. Ins 3.39 (34) (e) 6, Wis. Adm. Code, provides that in reference to the products to which eligible persons are entitled, the outpatient prescription drug rider may only be issued through December 31, 2005.
Section Ins 3.39 Appendix, Wis. Adm. Code
Appendix 1 provides that issuers shall use the outline of coverage specific to the plan being presented from among Outlines of Coverage A through D.
- Outline of Coverage A - Outline of Medicare Supplement Insurance
- Outline of Coverage B - Outline of Medicare Supplement 50% & 25% Cost-Sharing Plans
- Outline of Coverage C - Outline of Medicare Cost Insurance
- Outline of Coverage D - Outline of Medicare Select Insurance and Medicare Select 50% & 25% Cost-Sharing Plans
Appendix 3, regarding filing requirements, amends the transmittal form for submitting Advertisements.
Appendix 4, regarding notice of change for outline of coverage, amends the notice so insurers can provide information regarding required changes to existing Medigap policies.
Appendix 5, regarding notice to applicants regarding replacement of Medicare supplement insurance, amends notice to clarify that notice applies to Medicare cost, Medicare select, Medicare Advantage, or existing accident and sickness insurance. The notice is also amended to correspond with the NAIC model.
Appendix 6, regarding Medicare supplement refund calculation form, amends the form to correspond with the NAIC model.
Appendix 8, regarding disclosure statements, amends statements to correspond with those in the NAIC model.
Explanation of Other Amendments to s. Ins 3.39, Wis. Adm. Code
- Renumbers s. Ins 3.39 (30) (q) and (r) to (s) and (t); Wis. Adm. Code and s. Ins 3.39 (34) (c) 5 to 6, Wis. Adm. Code.
- Clarifies that the amendments to s. Ins 3.39 (4) (a) 1, (4m), (22), (23), Wis. Adm. Code, regarding prior approval, open enrollment, disclosure provisions, application forms and replacement coverage requirements, apply to Medicare select policies.
- Clarifies that the amendments to s. Ins 3.39 (4) (a) 1, 6 and 12, (4m), (15), (16), (21), (22), (23), (25), (26), (27) & (34), Wis. Adm. Code, regarding prior approval, termination, grievance rights, open enrollment, filing requirements for advertisements, loss ratio, commission limitations, disclosure provisions, application forms and replacement coverage requirements, excessive insurance, reporting of multiple policies, waiting period in replacement policies, and guaranteed issue apply to Medicare cost coverage.
- Amends rule to capitalize "Medicare" and to change to lower case reference to Medicare "supplement," "cost," and "select."
- Repeals s. Ins 3.39 (33), Wis. Adm. Code.
- Changes Medicare+Choice to Medicare Advantage.
Explanation of Changes to Wisconsin Mandates in Wisconsin Medigap Policies
Wisconsin's diabetes mandate, s. 632.895 (6), Wis. Stat., regarding coverage of equipment and supplies for the treatment of diabetes applies to Medigap policies and requires that policies provide coverage of prescription medications, insulin, and equipment and supplies for treatment of diabetes. The provisions of the MMA provide that Medigap policies issued beginning January 1, 2006, may not cover prescription drugs. The MMA defines covered Part D drugs as including insulin and medical supplies associated with the injection of insulin. Medigap policies issued prior to January 1, 2006, may continue to provide coverage of prescription medication, insulin, and equipment and supplies for treatment of diabetes for those individuals who do not enroll in a Medicare Part D prescription drug plan (PDP). Medigap policies issued beginning January 1, 2006, may not include this coverage. The MMA provides that medical supplies for injection of insulin include syringes, needles, alcohol swabs, and gauze shall be covered under Part D. Medical supplies do not include test strips and lancets, as these supplies are covered under Medicare Part B, and therefore may not be covered under Part D.
Wisconsin's home health care mandate, s. 632.895 (2), Wis. Stat., requires policies to provide coverage for the usual and customary fees for home care if the policy provides coverage of expenses incurred for inpatient hospital care. Such coverage may include medical supplies, drugs, and medications to the extent such items would be covered under the policy if the insured had been hospitalized. Insurers have been required to pay for prescription medications, if necessary under the plan of care for home care. Existing Medigap policies may continue to provide coverage of outpatient prescription drugs for those individuals who do not enroll in a Medicare Part D PDP. Medigap policies issued beginning January 1, 2006, and Medigap policies covering individuals enrolled in Medicare Part D may not cover prescription drugs included in the plan of care for home care.
Explanation of Guaranteed Issue and Open Enrollment Rights
The amendments to the rule expand guaranteed issue rights to those individuals who are covered under a Medigap policy with outpatient prescription drug coverage, who enroll in Medicare Part D PDPs. These individuals have the right to a Medigap policy without prescription drug coverage issued by the same insurer that issued the Medigap policy with the drug coverage.
Guaranteed issue rights apply to individuals covered by employee welfare benefit plans who terminate this coverage to enroll in a Medicare Advantage plan, but disenroll from the Medicare Advantage plan within 12 months of enrollment. Guaranteed issue rights also apply to individuals eligible for benefits under Medicare Parts A and B and covered under the medical assistance program who subsequently lose eligibility in the medical assistance program. These individuals are eligible for Medicare supplement and Medicare select policies, along with any riders available, except the optional outpatient prescription drug rider.
The open enrollment requirements under Wisconsin's Medicare supplement rule provide that individuals who apply for Medigap policies are eligible for a six-month open enrollment period beginning with the first month in which individuals first enroll for benefits under Medicare Part B. Individuals who are eligible for Medicare because of disability and who enroll in Medicare Part A and Part B are eligible for a six-month special enrollment period beginning with the first month in which an individual first enrolled for benefits under Medicare Part D. Pre-existing condition limitations under Medicare supplement policies only apply to individuals who have not had a continuous period of creditable coverage of at least six months prior to the date of application.
Policy Form and Rate Review
The OCI issued a prior Bulletin, dated June 28, 2005, regarding the approval requirements for exclusionary riders or policies submitted to comply with s. Ins 3.39, Wis. Adm. Code, and the requirements/provisions of the MMA. The June 28, 2005, Bulletin is available at:
http://oci.wi.gov/bulletin/0605med.htm.
The requirements for application forms and replacement coverage, s. Ins 3.39 (23) (a), Wis. Adm. Code, have been amended to comply with the NAIC model regulation. The statements that are required in the application form or a supplementary form provide that if the suspended Medigap coverage that is being reinstated because the individual is no longer entitled to Medicaid included outpatient prescription drug coverage, the reinstituted policy will no longer cover outpatient prescription drugs if the individual enrolled in Medicare Part D during suspension. The statements also provide that if the suspended Medigap coverage that is being reinstated because the individual loses employer or union-based group health plan coverage included outpatient prescription drug coverage, the reinstituted policy will no long cover outpatient prescription drugs if the individual enrolled in Medicare Part D during suspension. The questions that are required in the application form or a supplementary form also have been amended.
An updated version of the OCI's Medicare supplement policy form checklist is available on our Web site at:
http://oci.wi.gov/company/forms-policy.htm. An explanation of the form filing process and documents required is available on our Web site at:
http://oci.wi.gov//company/forms-policy.htm. Wisconsin accepts both SERFF and SIRCON electronic form filings.
Marketing Requirements
All Medicare supplement policies and Medicare replacement policies issued to Wisconsin policyholders after September 1, 1994, include a mandated catastrophic drug benefit. In addition, some policies issued beginning January 1, 1992, include the optional outpatient prescription drug rider. Wisconsin also has a diabetes mandate requiring coverage of equipment and supplies for the treatment of diabetes, which includes coverage of prescription medication, insulin, and supplies for injection of insulin.
Wisconsin will allow insurers to issue riders that remove outpatient prescription benefits from existing policies issued to individuals who chose to cancel their drug coverage and apply for Medicare Part D coverage. Wisconsin insureds who wish to maintain existing coverage and who do not apply for Medicare Part D coverage may continue their catastrophic drug benefit and outpatient prescription drug rider.
Wisconsin will allow insurers to continue marketing existing approved Medicare supplement policies with a rider excluding outpatient prescription drug coverage until January 2007. This will allow insurance companies the time necessary to obtain approval of their Medicare supplement policy forms that are developed specifically for Wisconsin policyholders.
Beginning January 1, 2006, insurers may only issue Medigap coverage without prescription drug coverage. OCI will allow insurers to market through December 31, 2006 existing approved policies with exclusionary riders that remove prescription drug coverage from these policies. Beginning January 1, 2007, insurers may only issue and market approved Medigap policy forms that do not include outpatient prescription drug coverage.
Wisconsin requires that all Medicare supplement advertisement be filed with the OCI prior to use. This includes materials used by the insurer and by agents. Insurers should not use in Wisconsin those advertisements that reference Medicare supplement Plan A to L categories. The transmittal form for submitting Medigap advertisements is available at:
http://oci.wi.gov/company/forms-policy.htm.
Effective Date
This bulletin is effective July 1, 2005, the effective date of the amendments to s. Ins 3.39, Wis. Adm. Code. The amendments to s. Ins 3.39, Wis. Adm. Code, explained in this Bulletin apply to all Medicare supplement, Medicare cost, and Medicare select policies marketed, issued or in effect beginning January 1, 2006.
Contact Information:
Questions regarding information contained in this Bulletin should be directed to Diane Dambach at:
diane.dambach@wisconsin.gov. Questions regarding form filing transmittals and advertisement transmittals should be directed to Linda Low at:
linda.low@wisconsin.gov. Questions regarding rate filings should be directed to Jamie Key at: jamie.key@wisconsin.gov.