I
105TH CONGRESS
1ST SESSION
H. R. 625
To amend title XVIII of the Social Security Act to provide additional
consumer protections for Medicare supplemental insurance.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 6, 1997
Mrs. JOHNSON of Connecticut (for herself, Mr. DINGELL, Mr. GREENWOOD,
Mr. STARK, Mr. SHAW, Mr. CARDIN, Mr. SAXTON, Mr. PALLONE, Mr.
DEFAZIO, Mr. MCDERMOTT, Mr. KLECZKA, Mr. RAHALL, Mr. ACKER-
MAN, Mr. HILLIARD, Mr. COBURN, Ms. PELOSI, Mr. BORSKI, Mr. EN-
SIGN, Mr. LEACH, Mr. DEUTSCH, Mr. GORDON, Mr. WAXMAN, Mrs.
THURMAN, Mr. MILLER of California, Ms. SLAUGHTER, Mr. OLVER, Mr.
DELLUMS, Ms. LOFGREN, Mr. SHAYS, Mr. FOGLIETTA, Mr. NEY, Mr.
NADLER, Mrs. CLAYTON, Mr. TOWNS, Mr. SAWYER, Mr. KLINK, Mr.
RUSH, Mr. STUPAK, Mr. LAFALCE, Mr. FRANK of Massachusetts, Ms.
ESHOO, Mr. BROWN of Ohio, Mr. GREEN, Ms. FURSE, Mr. ENGEL, Mr.
MARKEY, Mr. STRICKLAND, Mr. FROST, Mr. BOUCHER, Ms. DEGETTE,
and Mr. MANTON) 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 determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to provide
additional consumer protections for Medicare supple-
mental insurance.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medigap Amendments
of 1997’’.
SEC. 2. MEDIGAP AMENDMENTS.
(a) GUARANTEEING ISSUE WITHOUT PREEXISTING
CONDITIONS
FOR CONTINUOUSLY COVERED INDIVID-
UALS.—Section 1882(s) of the Social Security Act (42
U.S.C. 1395ss(s)) is amended—
(1) in paragraph (3), by striking ‘‘paragraphs
(1) and (2)’’ and inserting ‘‘this subsection’’,
(2) by redesignating paragraph (3) as para-
graph (4), and
(3) by inserting after paragraph (2) the follow-
ing new paragraph:
‘‘(3)(A) The issuer of a Medicare supplemental pol-
icy—
‘‘(i) may not deny or condition the issuance or
effectiveness of a Medicare supplemental policy de-
scribed in subparagraph (C);
‘‘(ii) may not discriminate in the pricing of the
policy on the basis of the individual’s health status,
medical condition (including both physical and men-
tal illnesses), claims experience, receipt of health
care, medical history, genetic information, evidence
of insurability (including conditions arising out of
acts of domestic violence), or disability; and
‘‘(iii) may not impose an exclusion of benefits
based on a pre-existing condition,
in the case of an individual described in subparagraph (B)
who seeks to enroll under the policy not later than 63 days
after the date of the termination of enrollment described
in such subparagraph.
‘‘(B) An individual described in this subparagraph is
an individual described in any of the following clauses:
‘‘(i) The individual is enrolled with an eligible
organization under a contract under section 1876 or
with an organization under an agreement under sec-
tion 1833(a)(1)(A) and such enrollment ceases ei-
ther because the individual moves outside the service
area of the organization under the contract or agree-
ment or because of the termination or nonrenewal of
the contract or agreement.
‘‘(ii) The individual is enrolled with an organi-
zation under a policy described in subsection (t) and
such enrollment ceases either because the individual
moves outside the service area of the organization
under the policy, because of the bankruptcy or insol-
vency of the insurer, or because the insurer closes
the block of business to new enrollment.
‘‘(iii) The individual is covered under a Medi-
care supplemental policy and such coverage is termi-
nated because of the bankruptcy or insolvency of the
insurer issuing the policy, because the insurer closes
the block of business to new enrollment, or because
the individual changes residence so that the individ-
ual no longer resides in a State in which the issuer
of the policy is licensed.
‘‘(iv) The individual is enrolled under an em-
ployee welfare benefit plan that provides health ben-
efits that supplement the benefits under this title
and the plan terminates or ceases to provide (or sig-
nificantly reduces) such supplemental health benefits
to the individual.
‘‘(v)(I) The individual is enrolled with an eligi-
ble organization under a contract under section
1876 or with an organization under an agreement
under section 1833(a)(1)(A) and such enrollment is
terminated by the enrollee during the first 12
months of such enrollment, but only if the individual
never was previously enrolled with an eligible organi-
zation under a contract under section 1876 or with
an organization under an agreement under section
1833(a)(1)(A).
‘‘(II) The individual is enrolled under a policy
described in subsection (t) and such enrollment is
terminated during the first 12 months of such en-
rollment, but only if the individual never was pre-
viously enrolled under such a policy under such sub-
section.
‘‘(C)(i) Subject to clause (ii), a Medicare supple-
mental policy described in this subparagraph, with respect
to an individual described in subparagraph (B), is a policy
the benefits under which are comparable or lesser in rela-
tion to the benefits under the enrollment described in sub-
paragraph (B) (or, in the case of an individual described
in clause (ii), under the most recent Medicare supple-
mental policy described in clause (ii)(II)).
‘‘(ii) An individual described in this clause is an indi-
vidual who—
‘‘(I) is described in subparagraph (B)(v), and
‘‘(II) was enrolled in a Medicare supplemental
policy within the 63 day period before the enrollment
described in such subparagraph.
‘‘(iii) As a condition for approval of a State regu-
latory program under subsection (b)(1) and for purposes
of applying clause (i) to policies to be issued in the State,
the regulatory program shall provide for the method of
determining whether policy benefits are comparable or
lesser in relation to other benefits. With respect to a State
without such an approved program, the Secretary shall es-
tablish such method.
‘‘(D) At the time of an event described in subpara-
graph (B) because of which an individual ceases enroll-
ment or loses coverage or benefits under a contract or
agreement, policy, or plan, the organization that offers the
contract or agreement, the insurer offering the policy, or
the administrator of the plan, respectively, shall notify the
individual of the rights of the individual, and obligations
of issuers of Medicare supplemental policies, under sub-
paragraph (A).’’.
(b) LIMITATION ON IMPOSITION OF PREEXISTING
CONDITION EXCLUSION DURING INITIAL OPEN ENROLL-
MENT PERIOD.—Section 1882(s)(2)(B) of such Act (42
U.S.C. 1395ss(s)(2)(B)) is amended to read as follows:
‘‘(B) In the case of a policy issued during the 6-
month period described in subparagraph (A), the policy
may not exclude benefits based on a pre-existing condi-
tion.’’.
(c) CLARIFYING THE NONDISCRIMINATION REQUIRE-
MENTS DURING
THE 6-MONTH INITIAL ENROLLMENT
PERIOD.—Section 1882(s)(2)(A) of such Act (42 U.S.C.
1395ss(s)(2)(A)) is amended to read as follows:
‘‘(2)(A)(i) In the case of an individual described in
clause (ii), the issuer of a Medicare supplemental policy—
‘‘(I) may not deny or condition the issuance or
effectiveness of a Medicare supplemental policy, and
‘‘(II) may not discriminate in the pricing of the
policy on the basis of the individual’s health status,
medical condition (including both physical and men-
tal illnesses), claims experience, receipt of health
care, medical history, genetic information, evidence
of insurability (including conditions arising out of
acts of domestic violence), or disability.
‘‘(ii) An individual described in this clause is an indi-
vidual for whom an application is submitted before the end
of the 6-month period beginning with the first month as
of the first day on which the individual is 65 years of age
or older and is enrolled for benefits under part B.’’.
(d) EXTENDING 6-MONTH INITIAL ENROLLMENT
PERIOD TO NON-ELDERLY MEDICARE BENEFICIARIES.—
Section 1882(s)(2)(A)(ii) of such Act (42 U.S.C.
1395ss(s)(2)(A)), as amended by subsection (c), is amend-
ed by striking ‘‘is submitted’’ and all that follows and in-
serting the following: ‘‘is submitted—
‘‘(I) before the end of the 6-month period be-
ginning with the first month as of the first day on
the results of consumer satisfaction surveys on
such contracts and policies, as described in sub-
section (a)(2), and such additional information
as the Secretary may prescribe.
(B) INFORMATION STANDARDS.—The Sec-
retary shall develop standards and criteria to
ensure that the information provided to Medi-
care beneficiaries under a grant under this sec-
tion is complete, accurate, and uniform.
(C) REVIEW OF INFORMATION.—The Sec-
retary may prescribe the procedures and condi-
tions under which an organization that has ob-
tained a grant under this section may furnish
information obtained under the grant to Medi-
care beneficiaries. Such information shall be
submitted to the Secretary at least 45 days be-
fore the date the information is first furnished
to such beneficiaries.
(4) CONSULTATION
WITH
OTHER
ORGANIZA-
TIONS AND PROVIDERS.—An organization which re-
ceives a grant under paragraph (1) shall consult
with private insurers, managed care plan providers
and other health care providers, and public and pri-
vate purchasers of health care benefits in order to
provide the information described in paragraph (1).