Bulletin 1998-16

Kansas Insurance Department

Kathleen Sebelius, Commissioner of Insurance

TO: All companies authorized to transact Medicare Supplement business in the state of Kansas

SUBJECT: Guarantee Issue Rights Pursuant to The Federal Balanced Budget Act of 1997 (P.L. 105-33) and Proposed Changes to K.A.R. 40-4-35.

DATE:November 10, 1998

The purpose of this bulletin is to advise all companies authorized to transact Medicare supplement business in the state of Kansas of the guarantee issue provisions in The Federal Balanced Budget Act of 1997.

With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described below that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition, and shall not impose an exclusion of benefits based on a pre-existing condition under such a Medicare supplement policy.

Disclosed below are the conditions that allow an individual the right to a guaranteed issue Medicare supplement policy. Eligible persons are those individuals highlighted below who apply to enroll under the policy not later than sixty-three (63) days after the date of the termination of enrollment described below and who submit evidence of the date of termination or disenrollment with the application for a Medicare supplement policy. The conditions for guaranteed issue and the eligible products are as follows:

Regardless of when State laws and regulations come into conformity with the Federal requirements, section 1882(s)(4) contains a Federal civil monetary penalty that can be imposed independently of any State enforcement mechanisms. It is essential for Medigap issuers to understand that the Federal guaranteed issue requirements added to section 1882(s) by the Balanced Budget Act, as well as the Federal civil money penalty enforcement authority in section 1882(s)(4), apply to all Medigap issuers as of the statutory effective date, July 1, 1998.

Any questions regarding this bulletin may be directed to the Kansas Insurance Department, Accident and Health Division, 420 SW 9th Street, Topeka, Kansas 66612, (785) 296-7850.