I

103D CONGRESS

1ST SESSION H. R. 1038

To direct the Secretary of Health and Human Services to provide Federal

minimum standards for health insurance for the elderly, and to amend

title XVIII of the Social Security Act for the purpose of directing

the Secretary to study methods of further improving the regulation

of health insurance for the elderly and to evaluate methods by which

the Medicare Program could more fully meet the health insurance needs

of the elderly.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 23, 1993

Mrs. BYRNE introduced the following bill; which was referred to the

Committee on Energy and Commerce

A BILL

To direct the Secretary of Health and Human Services to

provide Federal minimum standards for health insurance

for the elderly, and to amend title XVIII of the Social

Security Act for the purpose of directing the Secretary

to study methods of further improving the regulation

of health insurance for the elderly and to evaluate methods by which the Medicare Program could more fully

meet the health insurance needs of the elderly.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SHORT TITLE

2 SECTION 1. This Act may be cited as the ‘‘Senior Citi3 zens Health Insurance Standards Act of 1993’’.

4 FINDINGS AND PURPOSE

5 SEC. 2. The Congress finds that—

6 (1) health care costs are a major expense and

7 source of concern for the elderly;

8 (2) Medicare covers less than half of the health

9 care costs for the elderly;

10 (3) because of their condition and needs, many

11 elderly have to purchase private health insurance;

12 (4) the paucity of consumer information in the

13 field of health insurance for the elderly makes it al14 most impossible for those seeking such insurance to

15 make reasoned choices;

16 (5) many of the policies sold to supplement

17 Medicare coverage provide inadequate coverage and

18 low return to consumers;

19 (6) the many instances of abuse and deception

20 in the marketing of health insurance for the elderly,

21 which have been documented by recent congressional

22 hearings, constitute a national disgrace; and

23 (7) these instances of abuse, deception, inad24 equate coverage, and low return are now a national

25 problem and the Federal Government has a respon26 sibility to assist in the remedy.
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1 (b) It is, therefore, the purpose of this Act to direct

2 the Secretary to require Federal minimum standards for

3 the sale of health insurance for the elderly and to take

4 other action designed to provide future benefits to the el5 derly who need assistance in meeting their health insur6 ance needs.

7 MINIMUM STANDARDS

8 SEC. 3. (a) Each State shall, no later than two years

9 after the date of enactment of this Act, submit a plan to

10 the Secretary of Health and Human Services for the pur11 pose of specifying the minimum standards applicable to

12 health insurance for the elderly in such State. Such plan

13 shall specify minimum standards which—

14 (1) provide that at least 75 per centum of the

15 premiums collected from the sale of such health in16 surance be returned in the form of benefits provided

17 under such health insurance, as specified by the Sec18 retary in regulations;

19 (2) limit the exclusions of preexisting conditions

20 in accordance with regulations prescribed by the

21 Secretary;

22 (3) provide that policies of such health insur23 ance be written in simplified language which can be

24 understood by purchasers, as specified in regulations

25 prescribed by the Secretary;
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1 (4) prohibit the sale of such health insurance if

2 such health insurance duplicates the coverage pro3 vided under the Medicare Program, except that such

4 a sale may be made if the purchaser signs a written

5 statement expressing his knowledge of the duplica6 tive coverage, as specified in regulations prescribed

7 by the Secretary; and

8 (5) are in accordance with disclosure provisions,

9 specified in regulations, which the Secretary deter10 mines necessary to protect purchasers of such insur11 ance, including, but not limited to, provisions which

12 require a simplified written statement, to all pro13 spective purchasers, of—

14 (A) the percentage of premiums collected

15 for such health insurance which is returned in

16 the form of benefits;

17 (B) the name and address of the agent

18 who sold the policy and a toll free telephone

19 number of the insurance company;

20 (C) general information which briefly, sim21 ply, and adequately explains the premiums, ben22 efits, renewability, coverage, deductibles, coin23 surance charges, and other matters; and

24 (D) general information which briefly, sim25 ply, and adequately explains the specific mat-
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1 ters covered by the insurance which are not cov2 ered under the Medicare Program.

3 (b) The Secretary shall issue final regulations re4 ferred to in subsection (a) no later than one hundred and

5 eighty days after the date of enactment of this Act.

6 (c) The Secretary shall approve or disapprove any

7 plan submitted pursuant to subsection (a) no later than

8 ninety days after such submission.

9 (d)(1) In the case of any State whose plan is dis10 approved under subsection (c), the Secretary shall return

11 such plan to the State with a detailed explanation of the

12 reasons for such disapproval. The State may submit a new

13 plan within thirty days after receiving such explanation,

14 and the Secretary shall approve or disapprove such plan

15 no later than thirty days after such submission.

16 (2) If the Secretary disapproves a new plan submitted

17 in accordance with the second sentence of paragraph (1)

18 of this subsection, such disapproval shall be subject to ju19 dicial review in the United States court of appeals for the

20 circuit in which the State is located or in the United

21 States Court of Appeals for the District of Columbia Cir22 cuit. Any such review shall be instituted only by the State

23 involved and shall be commenced within sixty days after

24 the date on which the disapproval was issued. The provi-
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1 sions of subsection (f) shall apply and shall not be stayed

2 pending any such review.

3 (e)(1) The Secretary shall conduct oversight activities

4 in each State in which a plan is approved for the purpose

5 of assuring that such plan is carried out in each such

6 State. Each State shall submit an annual report to the

7 Secretary containing a detailed account of the operation

8 of the plan in the State during the previous year. Such

9 report shall be in such form and contain such information

10 as is specified by the Secretary in regulations.

11 (2) No change may be made in a plan by any State

12 unless approved by the Secretary before the effective date

13 of such change.

14 (3) In any case in which the Secretary finds that a

15 State, which has an approved plan, is not carrying out

16 such plan, the Secretary shall notify the State of such

17 finding and provide the State with detailed information

18 about the basis of such finding. The Secretary shall pro19 vide the State with an opportunity to correct any problems

20 specified by the Secretary or to present evidence that such

21 problems do not exist. After a reasonable time for allowing

22 for corrections of the problems or for submission of evi23 dence that such problems do not exist, the Secretary shall

24 make a final determination that an approved plan is or

25 is not being carried out in the State. If the Secretary de-
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1 termines that such a plan is not being carried out in the

2 State, the provisions of subsection (f) shall apply with re3 spect to the State. A final determination by the Secretary

4 that a State plan is not being carried out in any State

5 shall be subject to judicial review under the conditions de6 scribed in subsection (d)(2).

7 (f) In any case in which—

8 (1) a State does not submit a plan under sub9 section (a);

10 (2) the Secretary fails to approve a plan sub11 mitted by a State after giving such State an oppor12 tunity to submit a new plan under subsection (d); or

13 (3) the Secretary makes a final determination

14 under paragraph (3) of subsection (e) that an ap15 proved plan is not being carried out in such State;

16 the Secretary shall implement, as soon as practicable, a

17 plan in such State which carries out the minimum stand18 ards described in subsection (a) with respect to the sale

19 of health insurance for the elderly. The Secretary shall

20 implement such plan in such State until the Secretary de21 termines that such State will carry out the plan. The Sec22 retary may prescribe any regulations that are necessary

23 to implement and administer such plan in any State.

24 (g) Any provision of State law which would prevent

25 the establishment and implementation in that State of a
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1 plan implementing the minimum standards described in

2 subsection (a) is preempted by the provisions of this Act.

3 DEFINITIONS

4 SEC. 4. For purposes of section 3—

5 (1) the term ‘‘health insurance for the elderly’’

6 means health insurance (as specified in regulations

7 prescribed by the Secretary) sold to persons who, at

8 the time of such sale, are (A) aged sixty-five or

9 older, or (B) receiving benefits under the Medicare

10 Program;

11 (2) the term ‘‘Medicare Program’’ means the

12 health insurance program for the aged and disabled

13 established by title XVIII of the Social Security Act;

14 (3) the term ‘‘Secretary’’ means the Secretary

15 of Health and Human Services; and

16 (4) the term ‘‘State’’ means each of the fifty

17 States of the United States and the District of Co18 lumbia.

19 STUDIES

20 SEC. 5. Section 1875 of the Social Security Act is

21 amended by adding the following new subsections at the

22 end thereof:

23 ‘‘(c) The Secretary shall conduct a study for the pur24 pose of making recommendations to the Congress with re25 spect to a uniform approach to the regulation of all private

26 health insurance which is offered for sale to the aged and
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1 disabled. Such study shall include, but not be limited to,

2 an examination of the following matters—

3 ‘‘(1) minimum loss ratios;

4 ‘‘(2) uniform exclusions of pre-existing condi5 tions;

6 ‘‘(3) the various means of differentiating cat7 egories of coverage for purchasers of such health in8 surance;

9 ‘‘(4) the effectiveness of labels, numerical rat10 ings, or disclosure information in assisting the aged

11 and disabled to compare policies;

12 ‘‘(5) whether the sale of dread disease and

13 other indemnity policies should be banned or limited;

14 ‘‘(6) whether agents’ commissions for selling

15 such health insurance should be limited;

16 ‘‘(7) methods of eliminating misconduct by

17 agents in selling policies;

18 ‘‘(8) the need for and costs of individualized

19 health insurance counseling for the aged and dis20 abled;

21 ‘‘(9) whether claims handling requirements

22 should be imposed;

23 ‘‘(10) whether the sale of overlapping and/or

24 duplicative coverage should be banned; and
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1 ‘‘(11) whether policy standardization is nec2 essary to promote competition.

3 The Secretary shall, no later than two years after the date

4 of enactment of this subsection, transmit a report to the

5 Congress containing the findings and recommendations of

6 such study and proposed legislation concerning a com7 prehensive approach to the regulation of such health in8 surance.

9 ‘‘(d) The Secretary shall conduct a study for the pur10 pose of making recommendations to the Congress with re11 spect to the feasibility of health insurance coverage under

12 this title in addition to the coverage provided under parts

13 A and B. Such study shall include, but not be limited to,

14 an examination of the following matters—

15 ‘‘(1) the need for such additional coverage;

16 ‘‘(2) eligibility requirements;

17 ‘‘(3) alternative approaches to providing such

18 additional coverage;

19 ‘‘(4) cost estimates of the alternative ap20 proaches, taking into consideration the different co21 insurance and deductible requirements, coverage

22 provisions, and eligibility standards of each ap23 proach; and

24 ‘‘(5) alternative methods of financing such addi25 tional coverage.
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1 The Secretary shall, no later than two years after the date

2 of enactment of this subsection, transmit a report to the

3 Congress containing the findings and recommendations of

4 such study.’’.

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