[Congressional Record Volume 143, Number 2 (Thursday, January 9, 1997)]
[Extensions of Remarks]
[Page E80]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  CAVEAT EMPTOR: LAW AGAINST SALE OF DUPLICATE INSURANCE POLICIES TO 
                            SENIORS WEAKENED

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Thursday, January 9, 1997

  Mr. STARK. Mr. Speaker, just a word of warning to seniors: The law 
protecting against the sale of worthless, duplicative insurance 
policies which do not pay out benefits was weakened last year in the 
Kassebaum-Kennedy bill.
  The following memo from the Institute on Law and Rights of Older 
Adults makes the deception clear. Congress legislated that 2 + 2 = 3 in 
saying that policies which ``coordinate'' with Medicare and don't have 
to pay out benefits are not ``duplicate'' policies.

        Protections Against Sale of Duplicate Policies Weakened

       The Health Insurance Portability and Accountability Act of 
     1996 contains a provision that further weakens protections 
     against selling health insurance policies to Medicare 
     beneficiaries which provide benefits that duplicate their 
     existing coverage. The new law changes the disclosure 
     statement given to Medicare beneficiaries which was developed 
     to warn them against purchasing a health insurance policy 
     that duplicates Medicare coverage. The current statement: 
     ``Important Notice to Persons on Medicare--This Insurance 
     Duplicates Some Medicare Benefits,'' has been changed to: 
     ``Some health care services paid for by Medicare may also 
     trigger the payment of benefits under this policy.''
       This change, along with federal legislation passed in 1994 
     which allows insurance companies to offer policies containing 
     benefits which duplicate private health benefits held by a 
     Medicare beneficiary as long as the policy pays without 
     regard to the other health benefits, may result in 
     beneficiaries' being sold policies that duplicate Medicare 
     and their private coverage and thus are of little value. Note 
     that selling a new Medigap policy to someone who already has 
     a Medigap policy is still against the law unless the person 
     plans to drop the previously held Medigap policy. While the 
     practice of insurance companies' selling policies (other than 
     Medigap) to Medicare beneficiaries which pay benefits without 
     regard to their other health coverage is allowed, the 
     policies must include the following, ``This policy must pay 
     benefits without regard to other health benefit coverage to 
     which you may be entitled under Medicare or other 
     insurance.''
       The new law clarifies that a policy providing long-term 
     care benefits (defined as nursing home and non-institutional 
     coverage, nursing home only or home care only) which 
     coordinates benefits with Medicare or other private health 
     insurance policies (coordinates means that the long-term care 
     policy pays secondary benefits or does not pay benefits for 
     services covered under Medicare or other health insurance 
     coverage) is not considered duplicate coverage. Additionally, 
     long-term care policies must now include the statement, 
     ``Federal law requires us to inform you that in certain 
     situations this insurance may pay for some benefits also 
     covered by Medicare.''

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