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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 meth-
ods by which the Medicare Program could more fully
meet the health insurance needs of the elderly.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SHORT TITLE
SECTION 1. This Act may be cited as the ‘‘Senior Citi-
zens Health Insurance Standards Act of 1993’’.
FINDINGS AND PURPOSE
SEC. 2. The Congress finds that—
(1) health care costs are a major expense and
source of concern for the elderly;
(2) Medicare covers less than half of the health
care costs for the elderly;
(3) because of their condition and needs, many
elderly have to purchase private health insurance;
(4) the paucity of consumer information in the
field of health insurance for the elderly makes it al-
most impossible for those seeking such insurance to
make reasoned choices;
(5) many of the policies sold to supplement
Medicare coverage provide inadequate coverage and
low return to consumers;
(6) the many instances of abuse and deception
in the marketing of health insurance for the elderly,
which have been documented by recent congressional
hearings, constitute a national disgrace; and
(7) these instances of abuse, deception, inad-
equate coverage, and low return are now a national
problem and the Federal Government has a respon-
sibility to assist in the remedy.
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(b) It is, therefore, the purpose of this Act to direct
the Secretary to require Federal minimum standards for
the sale of health insurance for the elderly and to take
other action designed to provide future benefits to the el-
derly who need assistance in meeting their health insur-
ance needs.
MINIMUM STANDARDS
SEC. 3. (a) Each State shall, no later than two years
after the date of enactment of this Act, submit a plan to
the Secretary of Health and Human Services for the pur-
pose of specifying the minimum standards applicable to
health insurance for the elderly in such State. Such plan
shall specify minimum standards which—
(1) provide that at least 75 per centum of the
premiums collected from the sale of such health in-
surance be returned in the form of benefits provided
under such health insurance, as specified by the Sec-
retary in regulations;
(2) limit the exclusions of preexisting conditions
in accordance with regulations prescribed by the
Secretary;
(3) provide that policies of such health insur-
ance be written in simplified language which can be
understood by purchasers, as specified in regulations
prescribed by the Secretary;
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(4) prohibit the sale of such health insurance if
such health insurance duplicates the coverage pro-
vided under the Medicare Program, except that such
a sale may be made if the purchaser signs a written
statement expressing his knowledge of the duplica-
tive coverage, as specified in regulations prescribed
by the Secretary; and
(5) are in accordance with disclosure provisions,
specified in regulations, which the Secretary deter-
mines necessary to protect purchasers of such insur-
ance, including, but not limited to, provisions which
require a simplified written statement, to all pro-
spective purchasers, of—
(A) the percentage of premiums collected
for such health insurance which is returned in
the form of benefits;
(B) the name and address of the agent
who sold the policy and a toll free telephone
number of the insurance company;
(C) general information which briefly, sim-
ply, and adequately explains the premiums, ben-
efits, renewability, coverage, deductibles, coin-
surance charges, and other matters; and
(D) general information which briefly, sim-
ply, and adequately explains the specific mat-
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ters covered by the insurance which are not cov-
ered under the Medicare Program.
(b) The Secretary shall issue final regulations re-
ferred to in subsection (a) no later than one hundred and
eighty days after the date of enactment of this Act.
(c) The Secretary shall approve or disapprove any
plan submitted pursuant to subsection (a) no later than
ninety days after such submission.
(d)(1) In the case of any State whose plan is dis-
approved under subsection (c), the Secretary shall return
such plan to the State with a detailed explanation of the
reasons for such disapproval. The State may submit a new
plan within thirty days after receiving such explanation,
and the Secretary shall approve or disapprove such plan
no later than thirty days after such submission.
(2) If the Secretary disapproves a new plan submitted
in accordance with the second sentence of paragraph (1)
of this subsection, such disapproval shall be subject to ju-
dicial review in the United States court of appeals for the
circuit in which the State is located or in the United
States Court of Appeals for the District of Columbia Cir-
cuit. Any such review shall be instituted only by the State
involved and shall be commenced within sixty days after
the date on which the disapproval was issued. The provi-
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sions of subsection (f) shall apply and shall not be stayed
pending any such review.
(e)(1) The Secretary shall conduct oversight activities
in each State in which a plan is approved for the purpose
of assuring that such plan is carried out in each such
State. Each State shall submit an annual report to the
Secretary containing a detailed account of the operation
of the plan in the State during the previous year. Such
report shall be in such form and contain such information
as is specified by the Secretary in regulations.
(2) No change may be made in a plan by any State
unless approved by the Secretary before the effective date
of such change.
(3) In any case in which the Secretary finds that a
State, which has an approved plan, is not carrying out
such plan, the Secretary shall notify the State of such
finding and provide the State with detailed information
about the basis of such finding. The Secretary shall pro-
vide the State with an opportunity to correct any problems
specified by the Secretary or to present evidence that such
problems do not exist. After a reasonable time for allowing
for corrections of the problems or for submission of evi-
dence that such problems do not exist, the Secretary shall
make a final determination that an approved plan is or
is not being carried out in the State. If the Secretary de-
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termines that such a plan is not being carried out in the
State, the provisions of subsection (f) shall apply with re-
spect to the State. A final determination by the Secretary
that a State plan is not being carried out in any State
shall be subject to judicial review under the conditions de-
scribed in subsection (d)(2).
(f) In any case in which—
(1) a State does not submit a plan under sub-
section (a);
(2) the Secretary fails to approve a plan sub-
mitted by a State after giving such State an oppor-
tunity to submit a new plan under subsection (d); or
(3) the Secretary makes a final determination
under paragraph (3) of subsection (e) that an ap-
proved plan is not being carried out in such State;
the Secretary shall implement, as soon as practicable, a
plan in such State which carries out the minimum stand-
ards described in subsection (a) with respect to the sale
of health insurance for the elderly. The Secretary shall
implement such plan in such State until the Secretary de-
termines that such State will carry out the plan. The Sec-
retary may prescribe any regulations that are necessary
to implement and administer such plan in any State.
(g) Any provision of State law which would prevent
the establishment and implementation in that State of a
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plan implementing the minimum standards described in
subsection (a) is preempted by the provisions of this Act.
DEFINITIONS
SEC. 4. For purposes of section 3—
(1) the term ‘‘health insurance for the elderly’’
means health insurance (as specified in regulations
prescribed by the Secretary) sold to persons who, at
the time of such sale, are (A) aged sixty-five or
older, or (B) receiving benefits under the Medicare
Program;
(2) the term ‘‘Medicare Program’’ means the
health insurance program for the aged and disabled
established by title XVIII of the Social Security Act;
(3) the term ‘‘Secretary’’ means the Secretary
of Health and Human Services; and
(4) the term ‘‘State’’ means each of the fifty
States of the United States and the District of Co-
lumbia.
STUDIES
SEC. 5. Section 1875 of the Social Security Act is
amended by adding the following new subsections at the
end thereof:
‘‘(c) The Secretary shall conduct a study for the pur-
pose of making recommendations to the Congress with re-
spect to a uniform approach to the regulation of all private
health insurance which is offered for sale to the aged and
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disabled. Such study shall include, but not be limited to,
an examination of the following matters—
‘‘(1) minimum loss ratios;
‘‘(2) uniform exclusions of pre-existing condi-
tions;
‘‘(3) the various means of differentiating cat-
egories of coverage for purchasers of such health in-
surance;
‘‘(4) the effectiveness of labels, numerical rat-
ings, or disclosure information in assisting the aged
and disabled to compare policies;
‘‘(5) whether the sale of dread disease and
other indemnity policies should be banned or limited;
‘‘(6) whether agents’ commissions for selling
such health insurance should be limited;
‘‘(7) methods of eliminating misconduct by
agents in selling policies;
‘‘(8) the need for and costs of individualized
health insurance counseling for the aged and dis-
abled;
‘‘(9) whether claims handling requirements
should be imposed;
‘‘(10) whether the sale of overlapping and/or
duplicative coverage should be banned; and
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‘‘(11) whether policy standardization is nec-
essary to promote competition.
The Secretary shall, no later than two years after the date
of enactment of this subsection, transmit a report to the
Congress containing the findings and recommendations of
such study and proposed legislation concerning a com-
prehensive approach to the regulation of such health in-
surance.
‘‘(d) The Secretary shall conduct a study for the pur-
pose of making recommendations to the Congress with re-
spect to the feasibility of health insurance coverage under
this title in addition to the coverage provided under parts
A and B. Such study shall include, but not be limited to,
an examination of the following matters—
‘‘(1) the need for such additional coverage;
‘‘(2) eligibility requirements;
‘‘(3) alternative approaches to providing such
additional coverage;
‘‘(4) cost estimates of the alternative ap-
proaches, taking into consideration the different co-
insurance and deductible requirements, coverage
provisions, and eligibility standards of each ap-
proach; and
‘‘(5) alternative methods of financing such addi-
tional coverage.
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The Secretary shall, no later than two years after the date
of enactment of this subsection, transmit a report to the
Congress containing the findings and recommendations of
such study.’’.
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