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104TH CONGRESS
1ST SESSION
H. R. 483
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
JANUARY 11, 1995
Mrs. JOHNSON of Connecticut (for herself, Mr. POMEROY, Mr. THOMAS, Mr.
GOSS, Mr. SHAYS, Mr. KOLBE, Mr. ROYCE, Mr. ARCHER, Mr. STUMP,
Mr. BOEHLERT, Mr. HOUGHTON, Mr. PETRI, Mr. MILLER of Florida,
Mr. ROHRABACHER, Mr. BARRETT of Wisconsin, Mrs. MEEK of Florida,
Ms. WOOLSEY, Mr. MANZULLO, Mr. OBERSTAR, Mr. FORBES, Mr. BER-
MAN, Mr. TALENT, Mr. WALSH, Mr. BROWN of California, Mr. MINGE,
Mr. DOOLEY, Mr. PETERSON of Florida, Mr. PORTER, Mr. YOUNG of
Alaska, Mr. MARTINEZ, Mr. KLECZKA, Mr. ZIMMER, Mr. BAKER of Cali-
fornia, Mr. HOBSON, Mr. FRANK of Massachusetts, Mr. MOORHEAD, Mr.
FOX, Mr. FARR, and Mr. GREENWOOD) introduced the following bill;
which was referred to the Committee on Commerce and, in addition, to
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
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,
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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1990 is hereby repealed.
(2) CONFORMING AMENDMENT.—Section 4358
of such Act is amended by redesignating subsection
(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),
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‘‘(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
the matters described in subparagraph (D), 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 providing benefits pursuant
to a contract under section 1876 or an approved
demonstration project described in section 603(c) of
the Social Security Amendments of 1983, section
2355 of the Deficit Reduction Act of 1984, or sec-
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tion 9412(b) of the Omnibus Budget Reconciliation
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).
‘‘(D) The matters described in this subparagraph,
with respect to a policy, are as follows:
‘‘(i) The restrictions on payment under the pol-
icy for services furnished other than by or through
the network.
‘‘(ii) Out of area coverage under the policy.
‘‘(iii) The policy’s coverage of emergency serv-
ices and urgently needed care.
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‘‘(iv) The availability of a policy through the en-
tity that meets the 1991 Model NAIC Regulation or
1991 Federal Regulation without regard to this sub-
section and the premium charged for such policy.’’.
(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
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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
shall, as part of the notice of termination or
nonrenewal, be notified of the right to enroll in other
medicare supplemental policies offered by the issuer
or its affiliates.
‘‘(iii) For purposes of this subparagraph, the
term ‘affiliate’ shall have the meaning given such
term by the 1991 NAIC Model Regulation.’’.
(d) CIVIL MONEY PENALTY.—Section 1882(t)(2) of
the Social Security Act (42 U.S.C. 1395ss(t)(2)) is
amended—
(1) by striking ‘‘(2)’’ and inserting ‘‘(2)(A)’’;
(2) by redesignating subparagraphs (A), (B),
(C), and (D) as clauses (i), (ii), (iii), and (iv), re-
spectively;
(3) in clause (iv), as so redesignated—
(A) by striking ‘‘paragraph (1)(E)(i)’’ and
inserting ‘‘paragraph (1)(B)(v)(I), and
(B) by striking ‘‘paragraph (1)(E)(ii)’’ and
inserting ‘‘paragraph (1)(B)(v)(II)’’;
(4) by striking ‘‘the previous sentence’’ and in-
serting ‘‘this subparagraph’’; and
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(5) by adding at the end the following new sub-
paragraph:
‘‘(B) If the Secretary determines that an issuer of
a policy approved under paragraph (1) has made a mis-
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 (in this subsection re-
ferred 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
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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 ‘‘1995 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
(in this subsection as the ‘‘Secretary’’) shall promulgate
a regulation and section 1882(g)(2)(A) of the Social Secu-
rity 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 ‘‘1995 Federal Regu-
lation’’).
(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 1995
NAIC Model Regulation or the 1995 Federal
Regulation; or
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(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
1995 NAIC Model Regulation or the 1995 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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