[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 198 Introduced in Senate (IS)]

  1st Session
                                 S. 198

  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 SENATE OF THE UNITED STATES

             January 11 (legislative day, January 10), 1995

Mr. Chafee (for himself, Mrs. Feinstein, Mrs. Hutchison, Mr. Kohl, and 
  Mr. Dorgan) 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 permit medicare 
  select policies to be offered in all States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXPANSION AND REVISION OF MEDICARE SELECT 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 (42 U.S.C. 1320c-3 
        note) is hereby repealed.
            (2) Conforming amendment.--Section 4358 of such Act (42 
        U.S.C. 1320c-3 note) is amended by redesignating subsection (d) 
        as subsection (c).
    (b) Requirements of Medicare Select Policies.--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 section except that--
            ``(i) the benefits under such policy are restricted 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 subparagraph 
        (C)(i)--
                    ``(I) the benefits under such policy are not one of 
                the groups or packages of benefits described in 
                subsection (p)(2)(A),
                    ``(II) except for nominal copayments imposed for 
                services covered under part B of this title, such 
                benefits include at least the core group of basic 
                benefits described in subsection (p)(2)(B), and
                    ``(III) an enrollee's liability under such policy 
                for physician's services covered under part B of this 
                title is limited to the nominal copayments described in 
                subclause (II),
the policy shall nevertheless be treated as meeting those standards if 
the policy meets the requirements of subparagraph (B).
    ``(B) A policy meets the requirements of this subparagraph if--
            ``(i) full benefits are provided for items and services 
        furnished through a network of entities which have entered into 
        contracts or agreements with the issuer of the policy;
            ``(ii) full benefits are provided for items and services 
        furnished by other entities if the services are medically 
        necessary and immediately required because of an unforeseen 
        illness, injury, or condition and it is not reasonable given 
        the circumstances to obtain the services through the network;
            ``(iii) the network offers sufficient access;
            ``(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 acknowledges 
        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 issuer to 
        individuals in the State) that meets the 1991 Model NAIC 
        Regulation or 1991 Federal Regulation and other requirements of 
        this section without regard 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 section 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 offered 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 substantially 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 benefits 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 
organization 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 policy 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 services and 
        urgently needed care.
            ``(iv) The availability of a policy through the entity that 
        meets the 1991 Model NAIC Regulation or 1991 Federal Regulation 
        without regard to this subsection and the premium charged for 
        such policy.''.
    (c) Renewability of Medicare Select Policies.--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 subparagraph:
            ``(B)(i) Except as provided in clause (ii), in the case of 
        a policy that meets the requirements of subsection (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 the issuer described in clause (i), or 
        where an affiliate of such issuer, is issuing medicare 
        supplemental policies, such individual must be permitted to 
        enroll in any medicare supplemental policy offered by such 
        issuer or affiliate that provides benefits comparable to or 
        less than the benefits provided in the policy being canceled 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), respectively;
            (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 inserting 
        ``this subparagraph''; and
            (5) by adding at the end the following new subparagraph:
    ``(B) If the Secretary determines that an issuer of a policy 
approved under paragraph (1) has made a misrepresentation to the 
Secretary or has provided the Secretary 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 Association of Insurance 
Commissioners (in this subsection referred 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 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 subsection (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 Security 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 Regulation'').
    (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
                    (B) 1 year after the date the NAIC or the Secretary 
                first adopts such regulations.
            (2) Additional legislative action required.--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 Federal Regulation, but
                    (B) having a legislature which is not scheduled to 
                meet in 1995 in a legislative session in which such 
                legislation may be considered,
        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 legislature 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 
        regular session of the State legislature.
                                 <all>