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Montana Administrative Register Notice 6-203 No. 19   10/17/2013    
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BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE

MONTANA STATE AUDITOR

 

In the matter of the amendment of ARM 6.6.507B, 6.6.507C, 6.6.507D, 6.6.507E, 6.6.509, 6.6.511, and 6.6.511A pertaining to Medicare Supplements

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NOTICE OF AMENDMENT

 

           TO: All Concerned Persons

 

1. On July 25, 2013, the Commissioner of Securities and Insurance, Montana State Auditor, published MAR Notice No. 6-203 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 1228 of the 2013 Montana Administrative Register, Issue Number 14.

 

2. The department has amended the following rules as proposed: ARM 6.6.507B, 6.6.509, 6.6.511, and 6.6.511A.

 

3. The department has amended the following rules as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

 

           6.6.507C GUARANTEED ISSUE FOR ELIGIBLE PERSONS (1) through (2)(g) remain as proposed.

            (h) the individual, upon first becoming eligible for benefits under Medicare Part A and B enrolls is enrolled in the Qualified Medicare Beneficiary Program as defined in section 6408(d)(2) of the Federal Omnibus Budget Reconciliation Act of 1989, Public Law 101-239, or full Medicaid (ARM 37.83.802), and no longer qualifies due to income or eligibility changes;

            (i) through (3)(a)(iii) remain as proposed.

            (b) an individual described in (2)(b), (c), (e), (f), (h), or (i), or (j), whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated;

            (c) through (5)(c)(ii) remain as proposed.

            (d) an eligible person defined in (2)(f), (h), (i), or (j) is entitled to the issuance of any Medicare supplement policy offered by any issuer;

            (e) through (6)(b) remain as proposed.

 

            AUTH: 33-1-313, 33-22-904, 33-22-905, MCA

            IMP: 33-22-902, 33-22-904, 33-22-905, MCA

 

           6.6.507D BENEFIT STANDARDS FOR 2010 STANDARDIZED MEDICARE SUPPLEMENT BENEFIT PLAN POLICIES OR CERTIFICATES ISSUED FOR DELIVERY WITH AN EFFECTIVE DATE FOR COVERAGE ON OR AFTER JUNE 1, 2010 (1) through (4)(b)(iii) remain as proposed.

            (iv) coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement, less any applicable copayments for advanced imaging services and power-operated vehicles or scooters, as described in (7)(c) and (7)(e) for new Plan C and F policies, or certificates with an effective date on or after January 1, 2015;

            (v) and (vi) remain as proposed.

 

            AUTH: 33-1-313, 33-22-904, 33-22-905, MCA

            IMP: 33-15-303, 33-22-901, 33-22-902, 33-22-903, 33-22-904, 33-22-905, 33-22-909, 33-22-910, 33-22-911, 33-22-921, 33-22-922, 33-22-923, 33-22-924, MCA

 

           6.6.507E STANDARD MEDICARE SUPPLEMENT BENEFIT PLANS FOR 2010 STANDARDIZED MEDICARE SUPPLEMENT BENEFIT PLAN POLICIES OR CERTIFICATES ISSUED WITH AN EFFECTIVE DATE FOR COVERAGE ON OR AFTER JUNE 1, 2010 (1) through (7)(c)(i) remain as proposed.

            (ii) 100% of the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, and medically necessary emergency care in a foreign country as established in ARM 6.6.507D(4)(b)., with copayments in the following amounts for new policies and certificates with effective dates on or after January 1, 2015:

            (A) the lesser of $25 or the Medicare Part B coinsurance or copayment for each primary covered advanced imaging service; and

            (B) the lesser of $50 or the Medicare Part B coinsurance or copayment for the purchase of each covered power operated vehicle or scooter.

            (iii) for purposes of this subsection:

            (A) "advanced imaging service" means those Medicare Part B services, such as magnetic resonance imaging scans (MRIs), computerized tomography scans (CAT or CT scans) and positron emission tomography scans (PET scans), defined in separate guidance by the NAIC, in consultation with CMS, for purposes of establishing which covered services are subject to cost sharing. This definition may be updated periodically as needed; and

            (B) "power operated vehicle" or "scooter" means certain durable medical equipment defined in separate guidance by the NAIC, in consultation with CMS, for purposes of establishing which covered services are subject to cost sharing. This definition may be updated periodically as needed.

            (7)(d) through (7)(e)(i) remain as proposed.

            (ii) 100% of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign county, established in ARM 6.6.507D(4)(b)., with copayments in the following amounts for the new policies and certificates with effective dates on or after January 1, 2015:

            (A) the lesser of $25 or the Medicare Part B coinsurance or copayment for each primary covered advanced imaging service; and

            (B) the lesser of $50 or the Medicare Part B coinsurance or copayment for the purchase of each covered power-operated vehicle or scooter where the supplier accepts Medicare assignment for the claim.

            (iii) for purposes of this subsection:

            (A) "advanced imaging service" means those Medicare Part B services, such as magnetic resonance imaging scans (MRIs), computerized tomography scans (CAT or CT scans) and positron emission tomography scans (PET scans), defined in separate guidance by the NAIC, in consultation with CMS, for purposes of establishing which covered services are subject to cost-sharing. The definition may be updated periodically as needed; and

            (B) "power-operated vehicle" or "scooter" means certain durable medical equipment defined in separate guidance by the NAIC, in consultation with CMS, for purposes of establishing which covered services are subject to cost-sharing. This definition may be updated periodically as needed.

            (7)(f) through (7)(f)(i)(B) remain as proposed.

            (ii) The annual high deductible Plan F deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement regular Plan F policy, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1500 and shall be adjusted annually from 1999 by the Secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. Copays for advanced imaging services and power-operated vehicles applied under regular Plan F for new policies issued on or after January 1, 2015, are not applicable under Plan F With High Deductible.

(7)(g) through (11) remain as proposed.

 

            AUTH: 33-1-313, 33-22-904, 33-22-905, MCA

            IMP: 33-15-303, 33-22-901, 33-22-902, 33-22-903, 33-22-904, 33-22-905, 33-22-909, 33-22-910, 33-22-911, 33-22-921, 33-22-922, 33-22-923, 33-22-924, MCA

 

          4. On August 19, 2013, a public hearing was held on the proposed amendment of the above-stated rules in Helena. Comments were received by the August 27, 2013, deadline.

 

5. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

 

COMMENT 1:  The commenter was concerned that the existing guaranteed issue opportunity established by ARM 6.6.507C(2)(a) already covers the proposed open enrollment period.

 

RESPONSE 1: The commenter's assertion that the new language duplicates ARM 6.6.507C(2)(a) does not account for the fact that not every eligible person is a part of an employee welfare benefit plan. This is especially true of those on the MCHA Medicare carve-out plan. Moreover, there are many association groups, as well as individuals, who will be denied coverage if the department agreed with the comment. Accordingly, the department adopts the proposed rule.

 

COMMENT 2: The commenter noted that SB 223, in the 2013 legislature, which terminated the Montana Comprehensive Health Association (MCHA), did not include anything about guaranteed issue of Medigap policies. The commenter believed, therefore, that the CSI should not require providers to offer such coverage, as the regulations are unnecessary to address the closure of the MCHA program in light of other reforms that may present coverage opportunities for such enrollees. The commenter requested clarification of the CSI's concerns related to the need for an open enrollment period following termination of an individual health insurance policy or certificate for a person enrolled, or eligible for enrollment, in Medicare Part B. Finally, the commenter noted there may be alternate opportunities for consumers without specifying what those opportunities may be.

 

RESPONSE 2: The commenter is correct that the legislature did not include any language about guaranteed issue with its termination language. It is, however, the commissioner's statutory responsibility to protect insurance consumers (see generally 33-1-311(3), MCA). Furthermore, SB 223 did not address Medicare supplement insurance in any way, which would have fallen outside the scope of the legislation. The commissioner has authority to adopt rules to establish standards for policies that supplement Medicare under 33-2-904 and 33-22-905, MCA. In particular, the commissioner may adopt rules that set standards concerning eligibility (33-22-904(2)(b), MCA). The adoption of the proposed rules is consistent with this statutory authority.

 

With regard to the commenter's alternative opportunities comment, the CSI assumes the commenter is talking about the exchanges. However, persons in a Medicare carve-out, such as MCHA, are not eligible to enroll in the exchanges because they are Medicare eligible. Also, purchasing individual insurance is not appropriate for individuals who have Medicare as their primary insurance. Those individuals would be forced to pay for duplicative coverage. Absent the proposed rule, there would be no coverage available for these people.

 

COMMENT 3: The commenter expressed concerns that the changes to ARM 6.6.507C(j), which requires guaranteed issue for eligible persons by reason of disability or end-stage renal, would increase costs of current and eligible enrollees. The commenter cited a 2003 actuarial report on dates culled from 1996-2000 to support the commenter's position that persons eligible due to end-stage renal disease or disability cost twice as much as persons eligible by reason of age.

 

RESPONSE 3: The CSI understands that adding additional, high-risk persons to any insurance pool may drive up costs for all those involved with the pool. Absent these proposed changes, however, the transition plan for the MCHA will not be effective because of the alternative coverage available for these beneficiaries. Many other states require open enrollment opportunities for individuals who are eligible for Medicare by reason of disability. This is not an isolated circumstance that is foreign to the Medicare supplement industry.

 

COMMENT 4: The commenter was concerned that cost sharing for Medigap Plans C and F did not make the final version of the NAIC's model rule and should therefore be omitted from the CSI's rules.

 

RESPONSE 4: The CSI agrees with the commenter and the proposed language regarding cost sharing for advanced imaging services and power-operated vehicles/scooters is struck from ARM 6.6.507D and 6.6.507E.

 

COMMENT 5: The commenter noted that ARM 6.6.507C(3)(b) should also include (j) to accurately reflect the overall changes made. The commenter further noted that the language (3)(c) through (6)(b), which reads "remain the same" should be changed. The reason is that subsection (5) should indicate what products the new enrollees are eligible for. Finally, the commenter noted that ARM 6.6.507C(2)(h) should read "is enrolled" in as opposed to "enrolls" in.

 

RESPONSE 5: The CSI concurs and has added subsections (j) and (5)(f). Because the persons included within the new carve-out have never attempted to enroll, the panoply of options should be available to them. The CSI also agrees that changing the language to "is enrolled" more accurately reflects the law.

 

 

/s/Brett O'Neil                                                /s/Jesse Laslovich                                      

Brett O'Neil                                                    Jesse Laslovich

Rule Reviewer                                               Chief Legal Counsel

           

Certified to the Secretary of State October 7, 2013

 

 

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