II 116th CONGRESS 1st Session S. 2428 IN THE SENATE OF THE UNITED STATES August 1, 2019 Mr. Brown (for himself and Ms. Klobuchar ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to provide for certain reforms with respect to Medicare supplemental health insurance policies, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Medigap Consumer Protection Act of 2019 . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Guaranteed issue. Sec. 3. Limitations on pricing discrimination. Sec. 4. Clarification regarding standardized Medigap plans. Sec. 5. Improving information available to Medicare beneficiaries. Sec. 6. Broker conflicts of interest. Sec. 7. Protecting against high out-of-pocket expenditures for Medicare fee-for-service benefits. Sec. 8. Study and report on variations among Medigap plans. 2. Guaranteed issue (a) Guaranteed issue of Medigap policies to all Medigap-Eligible Medicare beneficiaries (1) In general Section 1882(s) of the Social Security Act ( 42 U.S.C. 1395ss(s) ) is amended— (A) in paragraph (2)(A), by striking 65 years of age or older and is enrolled for benefits under part B and inserting entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B ; (B) in paragraph (2)(D), by striking who is 65 years of age or older as of the date of issuance and ; (C) in paragraph (3)(B)(ii), by striking is 65 years of age or older and ; and (D) in paragraph (3)(B)(vi), by striking at age 65 . (2) Effective date; phase-In authority (A) Effective date Subject to subparagraph (B), the amendments made by paragraph (1) shall apply to Medicare supplemental policies effective on or after January 1, 2023. (B) Phase-In authority (i) In general Subject to clause (ii), the Secretary of Health and Human Services may phase-in the implementation of the amendments made under paragraph (1) (with such phase-in beginning on or after January 1, 2023) in such manner as the Secretary determines appropriate in order to minimize any adverse impact on individuals enrolled under a Medicare supplemental policy. (ii) Phase-In period may not exceed 5 years The Secretary of Health and Human Services shall ensure that the amendments made by paragraph (1) are fully implemented by not later than January 1, 2028. (3) Additional enrollment period for certain individuals (A) One-time enrollment period (i) In general In the case of an individual described in subparagraph (B), the Secretary of Health and Human Services shall establish a one-time enrollment period during which such an individual may enroll in any Medicare supplemental policy of the individual’s choosing. (ii) Period The enrollment period established under clause (i) shall begin on the date on which the phase-in period under paragraph (2) is completed and end 6 months after such date. (B) Individual described An individual described in this paragraph is an individual who— (i) is entitled to hospital insurance benefits under part A under section 226(b) or section 226A of the Social Security Act ( 42 U.S.C. 426(b) ; 426–1); (ii) is enrolled for benefits under part B of such Act ( 42 U.S.C. 1395j et seq.); and (iii) would not, but for the provisions of and amendments made by paragraphs (1) and (2), be eligible for the guaranteed issue of a Medicare supplemental policy under paragraph (2) or (3) of section 1882(s) of such Act ( 42 U.S.C. 1395ss(s) ). (b) Guaranteed issue of Medigap policies for Medicare Advantage and Medicaid enrollees, certain veterans, and other individuals determined appropriate by the Secretary; Treatment of individuals with COBRA (1) In general Section 1882(s)(3) of the Social Security Act ( 42 U.S.C. 1395ss(s)(3) ) is amended— (A) in subparagraph (B), by adding at the end the following new clauses: (vii) The individual was enrolled in a Medicare Advantage plan under part C for not less than 12 months and subsequently disenrolled from such plan and elects to receive benefits under this title through the original Medicare fee-for-service program under parts A and B. (viii) The individual— (I) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B; and (II) either— (aa) is eligible for medical assistance under a State plan or waiver under title XIX based on a reduction of income of the individual based on costs incurred for medical or other remedial care and was enrolled in such plan or waiver; or (bb) was otherwise eligible for medical assistance under a State plan or waiver under title XIX and subsequently lost eligibility for such medical assistance. (ix) The individual— (I) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B; (II) is a covered beneficiary (as that term is defined in section 1072(5) of title 10, United States Code), entitled to medical and dental care under chapter 55 of that title, who was receiving medical care at a facility of the uniformed services through such entitlement; and (III) no longer receives such care at such facility because— (aa) such facility has been closed; (bb) such facility no longer offers such care; (cc) the individual no longer meets the requirements for eligibility for such care; or (dd) the individual moved away from the facility. (x) The individual meets such other requirements that the Secretary, through notice and comment rulemaking, determines appropriate. ; (B) by striking subparagraph (C)(iii) and inserting the following: (iii) Subject to subsection (v)(1), for purposes of an individual described in clause (vi), (vii), (viii), (ix), or (x) of subparagraph (B), a Medicare supplemental policy described in this subparagraph shall include any Medicare supplemental policy. ; and (C) in subparagraph (E)— (i) in clause (iv), by striking and at the end; (ii) in clause (v), by striking the period at the end and inserting a semicolon; and (iii) by adding at the end the following new clauses— (vi) in the case of an individual described in subparagraph (B)(vii), the annual, coordinated election period (as defined in section 1851(e)(3)(B)) or a continuous open enrollment period (as defined in section 1851(e)(2)) during which the individual disenrolls from a Medicare Advantage plan under part C; (vii) in the case of an individual described in subparagraph (B)(viii) who is eligible for medical assistance under a State plan or waiver under title XIX for a reason described in item (aa), such period as is specified by the Secretary; (viii) in the case of an individual described in subparagraph (B)(viii) who is eligible for medical assistance under a State plan or waiver under title XIX for a reason described in item (bb), the period beginning on the date that the individual receives a notice of cessation of such individual’s eligibility for medical assistance under the State plan or waiver under title XIX and ending on the date that is six months after the individual receives such notice; (ix) in the case of an individual described in subparagraph (B)(ix), during the 63 days after the individual is no longer eligible to receive the care from the facility described in such subparagraph; (x) in the case of an individual described in subparagraph (B)(x), such period as is specified by the Secretary; and . (2) Treatment of individuals with COBRA (A) In general Section 1882(s)(3) of the Social Security Act ( 42 U.S.C. 1395ss(s)(3) ), as amended by subsection (a) and paragraph (1), is further amended— (i) in subparagraph (B)(i) by inserting or, in the case of an individual enrolled in such an employee welfare benefit plan pursuant to a COBRA continuation provision (as defined in section 2791(d)(4) of the Public Health Service Act), that the individual disenrolls from such plan and enrolls under part B before the period at the end; and (ii) in subparagraph (E), as amended by paragraph (1), by adding at the end the following new clause: (viii) in the case of an individual described in subparagraph (B)(i) who enrolled in an employee welfare benefit plan described in such subparagraph pursuant to a COBRA continuation provision (as defined in section 2791(d)(4) of the Public Health Service Act) and who disenrolls from such plan and enrolls under part B, the period beginning on the date that is 60 days before the effective date of such disenrollment and ending on the date that is 63 days after such effective date. . (B) Technical correction Section 1882(s)(2)(D) of the Social Security Act ( 42 U.S.C. 1395ss(s)(2)(D) ) is amended— (i) by striking 2701(c) and inserting 2704(c) ; and (ii) by striking 2701(a)(3) and inserting 2704(a)(3) . (3) Effective date The amendments made by paragraphs (1) and (2)(A) shall apply to Medicare supplemental policies effective on or after January 1, 2023. (c) MedPAC studies and reports (1) Annual open enrollment (A) Study The Medicare Payment Advisory Commission (in this section referred to as the Commission ) shall conduct a study on providing an open enrollment period for Medicare supplemental policies (under section 1882 of the Social Security Act ( 42 U.S.C. 1395ss )) under which an individual could enroll in such a policy with guaranteed issue protections. Such study shall include an analysis of— (i) the impact of the birthday rule in California and Oregon, where an individual can enroll with such protections in a new policy with the same or lesser benefits within 30 days of their birthday; (ii) the impact of such birthday rule if such rule permitted the individual to enroll with such protections in any policy; and (iii) other areas determined appropriate by the Commission. (B) Report Not later than 2 years after the date of the enactment of this Act, the Commission shall submit to Congress a report on the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Commission determines appropriate. (2) Equitable relief (A) Study The Medicare Payment Advisory Commission (in this section referred to as the Commission ) shall conduct a study on the Secretary of Health and Human Services granting equitable relief for enrollment in a Medicare supplemental policy (under section 1882 of the Social Security Act ( 42 U.S.C. 1395ss )) in a similar manner as the Secretary grants such relief for enrollment under part B of the Medicare program. (B) Report Not later than 2 years after the date of the enactment of this Act, the Commission shall submit to Congress a report on the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Commission determines appropriate. (d) Outreach plan (1) In general The Secretary of Health and Human Services shall develop an outreach plan to notify individuals (including individuals described in clause (viii) of section 1882(s)(3)(B) of the Social Security Act ( 42 U.S.C. 1395ss(s)(3)(B) ), as added by subsection (b)(1)) that may be affected by the provisions of, and amendments made by, this section regarding such provisions and amendments. (2) Consultation In implementing the outreach plan developed under paragraph (1), the Secretary of Health and Human Services shall consult with consumer advocates, brokers, insurers, the National Association of Insurance Commissioners, and State Health Insurance Assistance Programs. 3. Limitations on pricing discrimination (a) In general Section 1882 of the Social Security Act ( 42 U.S.C. 1395ss ) is amended by adding at the end the following new subsection: (aa) Development of new standards relating to pricing discrimination (1) In general The Secretary shall request the National Association of Insurance Commissioners to review and revise the standards for all benefit packages under subsection (p)(1), including the core benefit package, in order to provide coverage consistent with paragraph (2). Such revisions shall be made consistent with the rules applicable under subsection (p)(1)(E) (with the reference to the 1991 NAIC Model Regulation deemed a reference to the NAIC Model Regulation as most recently updated by the National Association of Insurance Commissioners to reflect previous changes in law and the reference to date of enactment of this subsection deemed a reference to the date of enactment of this subsection). (2) Changes in cost-sharing described Under the revised standards, coverage shall not be available under a Medicare supplemental insurance policy unless the issuer of the policy, in addition to conforming to the other applicable requirements of this section— (A) does not discriminate in the pricing of the policy because of the age or health status of the individual to whom the policy is issued; (B) does not, to an extent that jeopardizes the access to such policy for individuals who are eligible to participate in the program under this title because the individuals are individuals described in paragraph (2) or (3) of section 1811, discriminate in the pricing of the policy because the individual to whom the policy is issued is so eligible to participate in such program because the individual is an individual so described in such a paragraph; and (C) does not establish premiums applicable under such policy on a basis that would apply to a portion of, but not the entirety of, a metropolitan statistical area. (3) Application date The revised standards shall apply to benefit packages sold, issued, or renewed under this section to an individual who first become entitled to benefits under part A or first enrolls in part B on or after January 1, 2023. . (b) Conforming amendment Section 1882(o)(1) of the Social Security Act ( 42 U.S.C. 1395ss(o)(1) ) is amended by striking , and (y) and inserting (y), and (aa) . 4. Clarification regarding standardized Medigap plans Section 1882 of the Social Security Act ( 42 U.S.C. 1395ss ), as amended by section (3), is amended by adding at the end the following new subsection: (bb) Limitation on additional benefits A standard benefit package established under this section may not include benefits that are in addition to the standard benefits under the package. An issuer of a Medicare supplemental policy may offer such additional standardized benefits through a separate rider. . 5. Improving information available to Medicare beneficiaries (a) Clarifying beneficiary options on the Medicare plan finder website Section 1804 of the Social Security Act ( 42 U.S.C. 1395b–2 ) is amended by adding at the end the following new subsections: (e) In the case that the Secretary provides for a Medicare plan finder Internet website of the Centers for Medicare & Medicaid Services (or a successor website), the Secretary shall, with respect to such website and in accordance with subsection (f)— (1) consult with at least one independent entity that represents consumers in the development of such website; (2) make available on such website— (A) access to provider networks in order to provide to individuals entitled to benefits under part A or enrolled under part B information to assist such individuals in understanding the restrictions on providers and potential costs entailed by their decisions regarding enrollment under parts A and B, under part C, and in Medicare supplemental policies under section 1882; (B) a review of out-of-pocket expenditures, including deductibles, copayments, coinsurance, monthly premiums, and estimated annual out-of-pocket costs, displayed overall and by components, based on the best available information as determined by the Secretary and based on the individual's specific health status; (C) during the period prior to January 1, 2023, information regarding the rules that, in each State, pertain to guaranteed issue of Medicare supplemental health insurance policies prior to implementation of the provisions of the Medigap Consumer Protection Act of 2019 and, in the case that a State has no such rules pertaining to guaranteed issue of such policies, clear language explaining the implications of such lack of rules for individuals with pre-existing conditions; and (D) clear information on local resources for individuals, such as information on their State Health Insurance Assistance Program (SHIP); (3) not later than January 1, 2021, and periodically thereafter, perform a review of such website in order to ensure that such website makes available to individuals entitled to benefits under part A or enrolled under part B the information that the Secretary determines is necessary for such individuals to make informed choices regarding their options under the program under this title; and (4) not later than 12 months after the last day of each period for the request for information under subsection (f), update such website, taking into consideration the information collected pursuant to such subsection, to clarify the presentation of consumer options for Medicare supplemental health insurance policy options, including by presenting such information in a manner calculated to be understood by the average consumer and in a manner that— (A) improves consumer access to information regarding the applicable premiums under such policy options as of the date on which such website is so updated; (B) facilitates consumers’ ability to compare and sort policy options and premium information across plan offerings in a given location; (C) clarifies and explains differences in policy value; (D) rates and explains the financial stability of issuers of such policies; (E) provides data on the inflation rate of different policies; (F) provides information regarding the guaranteed issue requirements that apply to Medicare supplemental health insurance policies under section 1882(s); and (G) includes such general information as is determined by the Secretary to be necessary for individuals entitled to benefits under part A or enrolled under part B to understand costs under MA plans available pursuant to part C and prescription drug plans available pursuant to part D. (f) Not later than 6 months after the date of the enactment of this subsection and beginning on December 7 of each year thereafter, the Secretary of Health and Human Services shall provide an opportunity for public comment during which the Secretary requests information, including recommendations, from stakeholders regarding potential improvements to the presentation of Medicare supplemental health insurance policy options under section 1882 on the Medicare plan finder Internet website of the Centers for Medicare & Medicaid Services (or a successor website). (g) With respect to any information that the Secretary makes available on the Medicare plan finder Internet website of the Centers for Medicare & Medicaid Services (or a successor website) pursuant to subsection (e), the Secretary shall, prior to making such information available— (1) provide, in consultation with the National Association of Insurance Commissioners, an opportunity for consumer testing of such information; (2) share the results of such consumer testing of such information with interested stakeholders; and (3) provide a 60-day public comment period with respect to such information. . (b) Improved information on Medigap As the Secretary of Health and Human Services works to update the materials provided to Medicare beneficiaries regarding the Medicare program and Medicare supplemental policies based on the provisions of, and amendments made by, this Act, the Secretary shall consult with at least one independent entity that represents consumers. (c) Equal treatment between information on the Medicare fee-for-Service program and the Medicare Advantage program The Secretary of Health and Human Services shall ensure that— (1) any information distributed or otherwise made available to the public and related to the Medicare program does not display a bias towards the Medicare Advantage program over the original Medicare fee-for-service program, or vice versa; and (2) the volume of such information is equally weighted between such programs. 6. Broker conflicts of interest Section 1128G of the Social Security Act ( 42 U.S.C. 1320a–7h ) is amended— (1) in subsection (c)(1)(A), by striking 2011, and inserting 2011 (or, with respect to information required to be submitted under subsection (f)(1), not later than 6 months after the date of the enactment of such subsection), ; and (2) by adding at the end the following new subsection: (f) Application to Medigap insurance brokers (1) In general Beginning not later than 12 months after the date of enactment of this subsection, each issuer of a Medicare supplemental health insurance policy shall annually submit to the Secretary a report regarding payments or other transfers of value made during the previous year to agents, brokers, and other third parties representing such policy. Each such report shall include the following information, with respect to such a payment or other transfer of value: (A) The name of the recipient of the payment or other transfer of value. (B) The business address of the recipient. (C) The amount of the payment or other transfer of value. (D) The dates on which the payment or transfer of value was provided. (E) A description of the form of the payment or transfer of value. (F) Any other categories of information the Secretary determines appropriate. (2) Application of transparency system The provisions of subsections (b) through (d) shall apply to an issuer described in paragraph (1), information required to be reported under such paragraph, and agents, brokers, and other third parties described in such paragraph in the same manner and to the same extent as such provisions apply to an applicable manufacturer, information required to be reported under subsection (a), and a covered recipient. . 7. Protecting against high out-of-pocket expenditures for Medicare fee-for-service benefits Title XVIII of the Social Security Act ( 42 U.S.C. 1395 et seq.) is amended by adding at the end the following new section: 1899C. Protection against high out-of-pocket expenditures (a) In general Notwithstanding any other provision of this title, in the case of an individual entitled to, or enrolled for, benefits under part A or enrolled in part B, if the amount of the out-of-pocket cost-sharing of such individual for a year (beginning with 2022) equals or exceeds the annual out-of-pocket limit under subsection (b) for that year— (1) the amount otherwise payable under part A and the total amount of expenses incurred by the individual which would (except for this section) constitute incurred expenses for which benefits are payable under part B, shall be 100 percent of such amount for the remainder of that year; and (2) the individual shall not be responsible for out-of-pocket cost-sharing incurred during the remainder of that year. (b) Annual out-of-Pocket limit (1) In general The amount of the annual out-of-pocket limit under this subsection shall be— (A) for 2022, $5,500; or (B) for a subsequent year, the amount specified in this subsection for the preceding year increased or decreased by the percentage change in the Consumer Price Index for All Urban Consumers for the 12-month period ending with June of such preceding year. (2) Rounding If any amount determined under paragraph (1)(B) is not a multiple of $5, such amount shall be rounded to the nearest multiple of $5. (c) Out-of-Pocket cost-Sharing defined (1) In general Subject to paragraphs (2) and (3), in this section, the term out-of-pocket cost-sharing means, with respect to an individual, the amount of the expenses incurred by the individual that are attributable to— (A) deductibles, coinsurance and copayments applicable under part A or B; or (B) for items and services that would have otherwise been covered under part A or B but for the exhaustion of those benefits. (2) Certain costs not included (A) Non-covered items and services Expenses incurred for items and services which are not covered under part A or B shall not be considered incurred expenses for purposes of determining out-of-pocket cost-sharing under paragraph (1). (B) Items and services not furnished on an assignment-related basis If an item or service is furnished to an individual under this title and is not furnished on an assignment-related basis, any additional expenses the individual incurs above the amount the individual would have incurred if the item or service was furnished on an assignment-related basis shall not be considered incurred expenses for purposes of determining out-of-pocket cost-sharing under paragraph (1). (3) Source of payment For purposes of paragraph (1), the Secretary shall consider expenses to be incurred by the individual without regard to whether the individual or another person, including a State program, an employer, a Medicare supplemental policy, or other third-party coverage, has paid for such expenses. (d) Announcement of the annual out-of-Pocket limit The Secretary shall (beginning in 2021) announce (in a manner intended to provide notice to all interested parties) the annual out-of-pocket limit under this section that will be applicable for the succeeding year. . 8. Study and report on variations among Medigap plans (a) Study The Comptroller General of the United States (in this section referred to as the Comptroller General ) shall conduct a study on the variations among Medicare supplemental policies under section 1882 of the Social Security Act ( 42 U.S.C. 1395ss ). Such study shall include an analysis of the following: (1) How the variations among such policies impacts Medicare beneficiaries’ choices. (2) Ways to improve standardization and tools to help Medicare beneficiaries make informed choices with respect to such policies. (3) Other items determined appropriate by the Comptroller General. (b) Report Not later than 2 years after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report on the study conducted under subsection (a), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate.