Summary: S.2640 — 101st Congress (1989-1990)All Information (Except Text)

There is one summary for S.2640. Bill summaries are authored by CRS.

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Introduced in Senate (05/16/1990)

Medigap Fraud and Abuse Prevention Act of 1990 - Amends title XVIII (Medicare) of the Social Security Act to require that Medicare supplemental policy issuers: (1) cover a core group of basic benefits and, if they offer other benefits, issue a policy covering only such basic benefits; (2) provide prospective purchasers of a policy with a summary information sheet describing policy benefits and the ratio of benefits to premiums; (3) guarantee the renewability of policies; (4) offer each group policyholder terminating their coverage or group membership the right to continued coverage under an individual policy (the policyholder ending his or her group membership may also opt for continued coverage under the group policy) or, if the old group policy is replaced by a new group policy, the right to coverage under a new group policy without exclusion for preexisting conditions; and (5) suspend policy benefits and premiums upon the policyholder's indication that he or she is entitled to Medicaid (title XIX of the Social Security Act) benefits.

Requires the National Association of Insurance Commissioners (NAIC) or, upon the NAIC's default, the Secretary of Health and Human Services to promulgate simplification standards which set the core group of basic benefits policies must provide, limit the additional benefit packages that may be provided, and establish a uniform language and format to be used with respect to policy benefits. Prohibits the sale of policies which do not meet such standards, though permits approved waivers of such standards to test new or innovative benefits. Directs the NAIC to educate Medicare beneficiaries on the simplification standards.

Gives State Insurance Commissioners the right to approve or disapprove policies mailed into their State from another jurisdiction.

Increases the civil monetary penalty for knowingly selling a policy which duplicates health benefits to which an individual is already entitled. Prohibits a policy issuer from selling a policy without: (1) obtaining a written statement of the buyer indicating any Medicare supplemental policies or Medicaid coverage the buyer may have; and (2) notifying the buyer of the possibility and effect of his or her coverage under the Medicaid program and the address and telephone number of any State Medicare supplemental policy counseling program and the State Medicaid office. Prohibits the issuer from selling a policy to a person who indicates that he or she is covered by the Medicaid program or has a duplicative Medicare supplemental policy. Penalizes individuals who sell a policy in violation of such requirements. Stiffens other Medicare supplemental policy fraud penalties.

Increases the percentage of premiums which must be returned to policyholders as benefits. Establishes a process whereby States must approve premium increases prior to their implementation. Requires public hearings for any premium increase request exceeding twice the percentage increase in the medical care component of the consumer price index.

Limits Medicare supplemental policy sales commissions.

Authorizes appropriations or a matching grant program to assist States in establishing counseling programs to aid Medicare-eligible individuals in choosing Medicare supplemental policies.

Prohibits such policies from denying a claim for losses incurred more than six months from the effective date of coverage for a preexisting condition.