I
103D CONGRESS
1ST SESSION
H. R. 2770
To amend title XVIII of the Social Security Act to permit medicare select
policies to be offered in all States, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 28, 1993
Mrs. JOHNSON of Connecticut (for herself and Mr. POMEROY) introduced the
following bill; which was referred to the Committee on Energy and Commerce
A BILL
To amend title XVIII of the Social Security Act to permit
medicare select policies to be offered in all States, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EXPANSION AND REVISION OF MEDICARE SE-
LECT POLICIES.
(a) PERMITTING MEDICARE SELECT POLICIES IN
ALL STATES.—
(1) IN
GENERAL.—Subsection (c) of section
4358 of the Omnibus Budget Reconciliation Act of
1990 (hereafter referred to as ‘‘OBRA–1990’’) is
hereby repealed.
(2) CONFORMING AMENDMENT.—Section 4358
of OBRA–1990 is amended by redesignating sub-
section (d) as subsection (c).
(b) REQUIREMENTS OF MEDICARE SELECT POLI-
CIES.—Section 1882(t)(1) of the Social Security Act (42
U.S.C. 1395ss(t)(1)) is amended to read as follows:
‘‘(1)(A) If a medicare supplemental policy meets the
1991 NAIC Model Regulation or 1991 Federal Regulation
and otherwise complies with the requirements of this sec-
tion except that—
‘‘(i) the benefits under such policy are re-
stricted to items and services furnished by certain
entities (or reduced benefits are provided when items
or services are furnished by other entities), and
‘‘(ii) in the case of a policy described in sub-
paragraph (C)(i)—
‘‘(I) the benefits under such policy are not
one of the groups or packages of benefits de-
scribed in subsection (p)(2)(A),
‘‘(II) except for nominal copayments im-
posed for services covered under part B of this
title, such benefits include at least the core
group of basic benefits described in subsection
(p)(2)(B), and
‘‘(III) an enrollee’s liability under such pol-
icy for physician’s services covered under part
B of this title is limited to the nominal
copayments described in subclause (II),
the policy shall nevertheless be treated as meeting those
standards if the policy meets the requirements of subpara-
graph (B).
‘‘(B) A policy meets the requirements of this sub-
paragraph if—
‘‘(i) full benefits are provided for items and
services furnished through a network of entities
which have entered into contracts or agreements
with the issuer of the policy,
‘‘(ii) full benefits are provided for items and
services furnished by other entities if the services are
medically necessary and immediately required be-
cause of an unforeseen illness, injury, or condition
and it is not reasonable given the circumstances to
obtain the services through the network,
‘‘(iii) the network offers sufficient access,
‘‘(iv) the issuer of the policy has arrangements
for an ongoing quality assurance program for items
and services furnished through the network,
‘‘(v)(I) the issuer of the policy provides to each
enrollee at the time of enrollment an explanation
of—
‘‘(aa) the restrictions on payment under
the policy for services furnished other than by
or through the network,
‘‘(bb) out of area coverage under the
policy,
‘‘(cc) the policy’s coverage of emergency
services and urgently needed care, and
‘‘(dd) the availability of a policy through
the entity that meets the 1991 Model NAIC
Regulation or 1991 Federal Regulation without
regard to this subsection and the premium
charged for such policy, and
‘‘(II) each enrollee prior to enrollment acknowl-
edges receipt of the explanation provided under
subclause (I), and
‘‘(vi) the issuer of the policy makes available to
individuals, in addition to the policy described in this
subsection, any policy (otherwise offered by the is-
suer to individuals in the State) that meets the 1991
Model NAIC Regulation or 1991 Federal Regulation
and other requirements of this section without re-
gard to this subsection.
‘‘(C)(i) A policy described in this subparagraph—
‘‘(I) is offered by an eligible organization (as
defined in section 1876(b)),
‘‘(II) is not a policy or plan providing benefits
pursuant to a contract under section 1876 or an ap-
proved demonstration project described in section
603(c) of the Social Security Amendments of 1983,
section 2355 of the Deficit Reduction Act of 1984,
or section 9412(b) of the Omnibus Budget Reconcili-
ation Act of 1986, and
‘‘(III) provides benefits which, when combined
with benefits which are available under this title, are
substantially similar to benefits under policies of-
fered to individuals who are not entitled to benefits
under this title.
‘‘(ii) In making a determination under subclause (III)
of clause (i) as to whether certain benefits are substan-
tially similar, there shall not be taken into account, except
in the case of preventive services, benefits provided under
policies offered to individuals who are not entitled to bene-
fits under this title which are in addition to the benefits
covered by this title and which are benefits an entity must
provide in order to meet the definition of an eligible orga-
nization under section 1876(b)(1).’’.
(c) RENEWABILITY
OF MEDICARE SELECT POLI-
CIES.—Section 1882(q)(1) of the Social Security Act (42
U.S.C. 1395ss(q)(1)) is amended—
(1) by striking ‘‘(1) Each’’ and inserting
‘‘(1)(A) Except as provided in subparagraph (B),
each’’;
(2) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B)(i) Except as provided in clause (ii), in the
case of a policy that meets the requirements of sub-
section (t), an issuer may cancel or nonrenew such
policy with respect to an individual who leaves the
service area of such policy.
‘‘(ii) If an individual described in clause (i)
moves to a geographic area where an issuer de-
scribed in clause (i), or where an affiliate of such is-
suer, is issuing medicare supplemental policies, such
individual must be permitted to enroll in any medi-
care supplemental policy offered by such issuer or
affiliate that provides benefits comparable to or less
than the benefits provided in the policy being can-
celed or nonrenewed. An individual whose coverage
is canceled or nonrenewed under this subparagraph
representation to the Secretary or has provided the Sec-
retary with false information regarding such policy, the
issuer is subject to a civil money penalty in an amount
not to exceed $100,000 for each such determination. The
provisions of section 1128A (other than the first sentence
of subsection (a) and other than subsection (b)) shall
apply to a civil money penalty under this subparagraph
in the same manner as such provisions apply to a penalty
or proceeding under section 1128A(a).’’.
SEC. 2. EFFECTIVE DATES.
(a) NAIC STANDARDS.—If, within 6 months after
the date of the enactment of this Act, the National Asso-
ciation of Insurance Commissioners (hereafter in this sub-
section referred to as the ‘‘NAIC’’) makes changes in the
1991 NAIC Model Regulation (as defined in section
1882(p)(1)(A) of the Social Security Act) to incorporate
the additional requirements imposed by the amendments
made by section 1, section 1882(g)(2)(A) of such Act shall
be applied in each State, effective for policies issued to
policyholders on and after the date specified in paragraph
(3), as if the reference to the Model Regulation adopted
on June 6, 1979, were a reference to the 1991 NAIC
Model Regulation (as so defined) as changed under this
paragraph (such changed Regulation referred to in this
subsection as the ‘‘1994 NAIC Model Regulation’’).
(b) SECRETARY STANDARDS.—If the NAIC does not
make changes in the 1991 NAIC Model Regulation (as
so defined) within the 6-month period specified in sub-
section (a), the Secretary of Health and Human Services
(hereafter in this subsection as the ‘‘Secretary’’) shall pro-
mulgate a regulation and section 1882(g)(2)(A) of the So-
cial Security Act shall be applied in each State, effective
for policies issued to policyholders on and after the date
specified in paragraph (3), as if the reference to the Model
Regulation adopted in June 6, 1979, were a reference to
the 1991 NAIC Model Regulation (as so defined) as
changed by the Secretary under this paragraph (such
changed Regulation referred to in this subsection as the
‘‘1994 Federal Regulation’’).
(c) DATE SPECIFIED.—
(1) IN GENERAL.—Subject to paragraph (2),
the date specified in this subsection for a State is
the earlier of—
(A) the date the State adopts the 1994
NAIC Model Regulation or the 1994 Federal
Regulation; or
(B) 1 year after the date the NAIC or the
Secretary first adopts such regulations.
(2) ADDITIONAL
LEGISLATIVE
ACTION
RE-
QUIRED.—In the case of a State which the Secretary
identifies, in consultation with the NAIC, as—
(A) requiring State legislation (other than
legislation appropriating funds) in order for
medicare supplemental policies to meet the
1994 NAIC Model Regulation or the 1994 Fed-
eral Regulation, but
(B) having a legislature which is not
scheduled to meet in 1995 in a legislative ses-
sion in which such legislation may be consid-
ered,
the date specified in this subsection is the first day
of the first calendar quarter beginning after the
close of the first legislative session of the State legis-
lature that begins on or after January 1, 1995. For
purposes of the previous sentence, in the case of a
State that has a 2-year legislative session, each year
of such session shall be deemed to be a separate reg-
ular session of the State legislature.
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