7. Summary of any public comments and feedback on the statement of scope of the proposed rule that the agency received at any preliminary public hearing and comment period held under s. 227.136, Stat., and a description of how and to what extent the agency took those comments and that feedback into account in drafting the proposed rule. The office gave notice of a preliminary public hearing on a statement of scope for s. Ins 3.39 and 3.55, Wis. Adm. Code, relating to amending Medicare supplemental insurance and reporting requirements. The notice was published in the Wisconsin Administrative Register on July 30, 2018, in Register No. 751B. A public hearing was held on August 9, 2018 at 11:00 am. Notice as also published on the office’s website. The public could provide oral or written testimony and a public comment period was open until 4:00 pm on August 20, 2018.
Testimony was received by OCI that addressed areas of potential confusion between the NAIC model and the federal MACRA law. Specifically, testimony highlighted that the key decision point for what coverage a person who is Medicare eligible may receive through a Medicare supplemental product is tied to the date the individual first became eligible for Medicare. The testimony provided highlighted that although MACRA required insurers to not offer the Medicare Part B medical deductible rider to persons first eligible for Medicare on or after January 1, 2020, insurers could continue offering the rider to persons eligible for Medicare prior to January 1, 2020. Additionally, it was noted that given Medicare supplemental products are guaranteed renewable for life thus necessitating insurers to continue to renew the Medicare Part B medical deductible rider coverage. The office, in drafting the permanent rule, incorporated the suggestions raised in oral testimony into the drafted rule.
8. Comparison of similar rules in adjacent states as found by OCI:
Illinois: 50 Ill. Adm. Code 2008, Minimum Standards for Individual and Group Medicare Supplement Insurance. Effective November 26, 2018. Please note that as Wisconsin is a waived state for Medicare supplemental insurance there are no similar rules in adjacent states.
Iowa: IA ADC 191-37 (514D). Effective May 15, 2019 implementing MACRA. Please note that as Wisconsin is a waived state for Medicare supplemental insurance there are no similar rules in adjacent states.
Michigan: M.C.L.A 500.3801-3861. Effective March 20, 2019. Please note that as Wisconsin is a waived state for Medicare supplemental insurance there are no similar rules in adjacent states.
Minnesota: Minnesota Statutes s. 62A.3099 to 62A.44 are being revised by 2019 Legislative Bill HF2051 and SF2313. The proposed bills will implement the MACRA changes. Please note that as Wisconsin is a waived state for Medicare supplemental insurance there are no similar rules in adjacent states.
9. A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule and how any related findings support the regulatory approach chosen for the proposed rule:
OCI’s review of complaints, NAIC models, insurer’s financial information, and CMS data indicates that Medicare currently covers 60 million Americans, 1,143,459 of whom are Wisconsin residents as of 2018. An estimated 25 percent of Wisconsin Medicare beneficiaries are covered by Medicare supplement policies. Nationally, the per person personal health care spending for the 65 and older population was $18,988 in 2012.
Information collected by the OCI indicates that 48 insurance companies offer Medicare supplement, Medicare cost or Medicare select policies to Wisconsin consumers eligible for Medicare due to age or disability. In addition, there are 34 insurance companies that have Medicare supplement policyholders although the companies no longer actively market Medicare supplement coverage in Wisconsin. At year-end 2017, there were 289,662 Wisconsin Medicare beneficiaries with Medicare supplement policies.
10. Any analysis and supporting documentation that OCI used in support of OCI’s determination of the rule’s effect on small businesses under s. 227.114:
OCI reviewed financial statements and other reports filed by life, accident and health insurers and determined that none qualify as a small business. Wisconsin currently has 48 insurance companies actively marketing offering Medicare supplement, Medicare cost and Medicare select insurance policies and an additional 34 companies supporting guaranteed renewable policies although no longer actively marketing Medicare supplement policies.
11. See the attached Private Sector Fiscal Analysis.
The proposed rule will not significantly impact the private sector. Insurers offering Medicare supplement policies (Medicare supplement, Medicare cost, and Medicare select policies) may incur costs associated with developing new Medicare supplement policies and marketing materials, mailing riders and explanatory materials to existing policyholders. However, these costs are offset by the insurers’ ability to continue offering Medicare supplement policies to Wisconsin consumers. Further, removing the Medicare Part B medical deductible rider as an optional purchase to persons first eligible for Medicare on or after January 1, 2020, will not adversely impact consumers, agents or insurers as the typical premium for rider closely approximates the actual deductible amount that for 2019 will be $185.00.
12. A description of the Effect on Small Business:
The proposed rule will not significantly impact the private sector. Insurers offering Medicare supplement policies (Medicare supplement, Medicare cost, and Medicare select policies) may incur costs associated with developing new Medicare supplement policies and marketing materials, mailing riders and explanatory materials to existing policyholders. However, these costs are offset by the insurers’ ability to continue offering Medicare supplement policies to Wisconsin consumers. Further, removing the Medicare Part B medical deductible rider as an optional purchase for newly eligible persons on or after January 1, 2020, will not adversely impact consumers, agents, or insurers as the typical premium for Medicare Part B medical deductible riders closely approximated the actual deductible amount that for 2019 will be $185.00.
13. Agency contact person:
or by contacting Karyn Culver, Paralegal, at:
Phone: (608) 267-9586
Address: 125 South Webster St – 2nd Floor, Madison WI 53703-3474
Mail: PO Box 7873, Madison, WI 53707-7873
14. Place where comments are to be submitted and deadline for submission:
The deadline for submitting comments is 4:00 p.m. on May 21, 2019.
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 3.39 and 3.55, Wis. Adm. Code.
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 3.39 and 3.55, Wis. Adm. Code.
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Julie E. Walsh
The proposed rule changes are:
INS 3.13 (2) (j) Except as provided in s. Ins 3.39 (7) (d), (dm), and (dt), the provision or notice regarding the right to return the policy required by s. 632.73, Stats., shall comply with all of the following: 3. Provide an unrestricted right to return the policy, within 10 days from the date it is received by the policyholder, to the issuer at its home or branch office, if any, or to the agent through whom it was purchased; except it shall provide an unrestricted right to return the policy within 30 days of the date it is received by the policyholder in the case of a Medicare supplement policy subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (6), issued pursuant to a direct response solicitation. Provision shall not be made to require the policyholder to set out in writing the reasons for returning the policy, to require the policyholder to first consult with an agent of the issuer regarding the policy, or to limit the reasons for return. Note: Paragraph (j) was adopted to assist in the application of s. 204.31 (2) (a), Stats., to the review of accident and sickness policy and other contract forms. Those statutory requirements are presently included in s. 632.73, Stats. The original statute required that the provision of notice regarding the right to return the policy must be appropriately captioned or titled. Since the important rights given the insured are to examine the policy and to return the policy, the rule requires that the caption or title must refer to at least one of these rights—examine or return. Without such reference, the caption or title is not considered appropriate.
The original statute permitted the insured to return the policy for refund to the home office or branch office of the insurer or to the agency with whom it was purchased. In order to assure the refund is made promptly, some insurers prefer to instruct the insured to return the policy to a particular office or agent for a refund. Notices or provisions with such requirements will be approved on the basis that the insurer must recognize an insured’s right to receive a full refund if the policy is returned to any other office or agent mentioned in the statute.
Also, the statute permits the insured to return a policy for refund within 10 days from the date of receipt. Some insurers’ notices or provisions regarding such right, however, refer to delivery to the insured instead of receipt by the insured or do not specifically provide for the running of the 10 days from the date the insured receives the policy. Notices or provisions containing such wording will be approved on the basis that the insurer will not refuse refund if the insured returns the policy within 10 days from the date of receipt of the policy.
Sections 632.73 (2m) and 600.03 (35) (e), as created by Chapter 82, Laws of 1981, provide for the right of return provisions in certain certificates of group Medicare supplement policies. Therefore, for purposes of this subparagraph, the word policy includes a Medicare supplement certificate subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (6).
(7) (b) The notice required by sub. (6) for a Medicare supplement policy subject to s. Ins 3.39 (4), (4s) (4m), (4t), (5), (5m), (5t), and (7), shall include an introductory statement in substantially the following form: Your new policy provides _______ days within which you may decide without cost whether you desire to keep the policy.
INS 3.39 (1) (a) This section establishes requirements for health and other disability insurance policies primarily sold to Medicare eligible persons. Disclosure provisions are required for other disability policies sold to Medicare eligible person because such policies frequently are represented to, and purchased by, the Medicare eligible as supplements to Medicare products including Medicare Advantage and Medicare Prescription Drug plans.
(b) This section seeks to reduce abuses and confusion associated with the sale of disability insurance to Medicare eligible persons by providing for reasonable standards. The disclosure requirements and established benefit standards are intended to provide to Medicare eligible persons guidelines that they can use to compare disability insurance policies and certificates as described in s. Ins 6.75 (1) (c), and to aid them in the purchase of policies and certificates intended to supplement Medicare and Medicare Advantage plans policies that are suitable for their needs. This section is designed not only to improve the ability of the Medicare eligible consumer to make an informed choice when purchasing disability insurance, but also to assure the Medicare eligible persons of this state that the commissioner will not approve a policy or certificate as “Medicare supplement” or as a “Medicare replacement cost” unless it meets the requirements of this section.
SECTION 4. INS 3.39 (1) (c) is repealed.
SECTION 5. INS 3.39 (1) (d) is amended to read:
INS 3.39 (1) (d) Wisconsin statutes interpreted and implemented by this rule are ss. 185.983 (1m), 600.03, 601.01 (2), 601.42, 609.01 (1g) (b), 625.16, 628.34 (12), 628.38, 631.20 (2), 632.73 (2m), 632.76 (2) (b), 632.81, 632.895 (2), (3), (4) and (6) and (9), Stats.
SECTION 6. INS 3.39 (2) (a) (intro.), 1. and 3. are amended to read:
INS 3.39 (2) (a) Except as provided in pars. (d) and (e), this section applies to any group or individual Medicare supplement policy or certificate, or Medicare select policy or certificate as defined described in s. 600.03 (28r), Stats., or any Medicare replacement cost policy as defined described in s. 600.03 (28p) (a) and (c), Stats., including all of the following: 1. Any Medicare supplement policy, Medicare select policy, or Medicare replacement cost policy issued by a voluntary sickness care plan subject to ch. 185, Stats.;
2. Any certificate issued under a group Medicare supplement policy or group Medicare replacement select policy;.
3. Any individual or group policy sold in Wisconsin predominantly to individuals or groups of individuals who are 65 years of age or older which that offers hospital, medical, surgical, or other disability coverage, except for a policy which that offers solely nursing home, hospital confinement indemnity, or specified disease coverage; and.
SECTION 7. INS 3.39 (2) (a) 4. is repealed.
SECTION 8. INS 3.39 (2) (a) 5. and (b) are amended to read:
INS 3.39 (2) (a) 5. Any individual or group policy or certificate sold in Wisconsin to persons under 65 years of age and eligible for medicare Medicare by reason of disability which that offers hospital, medical, surgical or other disability coverage, except for a policy or certificate which that offers solely nursing home, hospital confinement indemnity or specified disease coverage.
(b) Except as provided in pars. (d) and (e), subs. (9) and (11) apply to any individual disability policy sold to a person eligible for Medicare which that is not a Medicare supplement, Medicare select, or a Medicare replacement cost policy as described in par. (a).
SECTION 9. INS 3.39 (2) (c) (intro.) and 2. are consolidated and renumbered INS 3.39 (2) (c) and, as renumbered, are amended to read:
INS 3.39 (2) (c) Except as provided in par. (e), sub. (10) applies to:
2. Any any individual or group hospital or medical policy which that continues with changed benefits after the insured becomes eligible for Medicare.
SECTION 10. INS 3.39 (2) (c) 1. is repealed.
SECTION 11. INS 3.39 (2) (d) (intro.) is amended to read:
INS 3.39 (2) (d) Except as provided in subs. (10) and (13), this section does not apply to any of the following:
SECTION 12. INS 3.39 (2) (d) 4. is repealed.
SECTION 13. INS 3.39 (2) (e) (intro.) and 1. are amended to read:
INS 3.39 (2) (e) This section does not apply to either of the following:
1. A policy providing solely accident, dental, vision, disability income, or credit disability income coverage; or.
SECTION 14. INS 3.39 (3) (c) (intro.) and 1., (ce), (e) and (f) are amended to read:
INS 3.39 (3) (c) “Applicant" means either of the following:
1. In the case of an individual Medicare supplement, Medicare select, or Medicare replacement cost policy, the person who seeks to contract for insurance benefits.
(ce) “Balance bill" means seeking: to bill, charge, or collect a deposit, remuneration or compensation from; to file or threaten to file with a credit reporting agency; or to have any recourse against an enrollee insured or any person acting on the enrollee’s insured’s behalf for health care costs for which the enrollee insured is not liable. The prohibition on recovery does not affect the liability of an enrollee insured for any deductibles, coinsurance or copayments, or for premiums owed under the policy or certificate.
(e) “CMS” means the Centers for Medicare & Medicaid Services within the U.S. department of health and human services.
(f) “Certificate" means, any in this section, a certificate delivered or issued for delivery in this state under a group Medicare supplement policy or under a Medicare select policy that is issued on a group basis, i.e. employer retiree group.
SECTION 15. INS 3.39 (3) (fm) is created to read: