ss.
185.983 (1m),
600.03,
601.01 (2),
609.01 (1g) (b),
625.16,
628.34 (12),
628.38,
631.20 (2),
632.73 (2m),
632.76 (2) (b) and
632.81,
632.895 (6) and
(9), Wis. Stats.
Statutory authority
Explanation of agency authority
The statutes all relate to the commissioner's authority to promulgate rules regulating the business of insurance as it relates to Medicare supplement and Medicare replacement insurance products. Specifically, ss.
601.41,
625.16,
628.38,
632.73,
632.76, and
632.81, Wis. Stats., permit the commissioner to promulgate rules regulating various aspects of Medicare supplement and Medicare replacement products while s.
628.34, Wis. Stats., authorizes the commissioner to promulgate rules governing disclosure requirements and unfair marketing practices for disability policies, which includes Medicare supplement and Medicare replacement products.
Related statutes or rules
The Centers for Medicare & Medicaid Services (CMS) required the National Association of Insurance Commissioners (NAIC) to make conforming changes to the Medigap model regulation and delegated the function of implementing the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA, Public Law 110-175) to NAIC. CMS delegates enforcement of MIPPA and the underlying Medicare supplement and Medicare replacement insurance products to the states that have incorporated the NAIC Model Act into the state's insurance regulations. To date Wisconsin has passed several NAIC Model Acts through statute including the most recent modification to the NAIC Medigap Model. In Wisconsin Medicare supplement and Medicare replacement products are currently regulated through s.
Ins 3.39, Wis. Adm. Code, inclusive of the appendices. The proposed rule modifies and adds to s.
Ins 3.39, Wis. Adm. Code in order to comply with the MIPPA and the NAIC requirements, to the extent necessary, and updates the appendices to reflect those changes.
Plain language analysis and summary of the proposed rule
The proposed rule amends portions of the rule to more closely reflect the benefits provided by the NAIC Medicare Supplement Insurance Minimum Standards Model Act and reintroduces the use of high deductible Medicare supplement plans. Further, during prior rule-making the Board on Aging and Long-term Care requested broadening of the guarantee issue eligibility rights. The commissioner convened an advisory work group to assist in the review of existing guarantee issue rights and to determine whether revisions were warranted. The proposed rule includes two modifications to Ins. 3.39, Wis. Adm. Code, that arose from the recommendation of the advisory work group specific to guarantee issue rights.
Regarding modifications clarifying NAIC Model regulations relating to the two new plans that should lower premiums by requiring insureds to pay either 50% of hospital inpatient charges or copayments for office and emergency room visits. The proposed rule limits availability combinations of riders that can be used with the newer benefits as certain combinations would make any premium savings illusory. Specifically, issuers cannot issue both the Medicare Part A Deductible Rider and the Medicare 50% Part A Deductible Rider to the same insured for the same period of coverage. Similarly, issuers cannot issue both the Medicare Part B Deductible Rider and the Medicare Part B Copayments or Coinsurance Rider to the same insured for the same period of coverage.
The proposed rule further delineates that the Medicare Part B Copayment or Coinsurance Rider requires that the insured's copayment or coinsurance be the lesser of $20.00 per office visit or the Medicare Part B coinsurance amount, with emergency room visits covered at the lesser of $50.00 or the Medicare Part B coinsurance amount. The emergency room copayment or coinsurance amount shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.
In addition to corrections, the proposed rule reintroduces the high-deductible Medicare supplement plan previously sunset. The reintroduction is in response to repeated requests from the industry and supported by the Board on Aging and Long-term Care. This permits insureds flexibility to purchase a product best suited to medical and financial needs. The product complies with the NAIC Model regulation is proposed to have policy effective on June 1, 2010 to permit issuers time to develop and have policy forms and advertising material approved by the office. The proposed rule also modified Appendix 3 to reflect these changes.
The annual high deductible shall be $1,900.00 for 2010, and will be adjusted annually thereafter to reflect changes in the Consumer Price Index in the twelve-month period ending with August of the preceding year, rounded to the nearest multiple of $10.00. The annual high deductible consists of out-of-pocket expenses, other than premiums, listed above and is in addition to any other specific benefit deductibles. An issuer must continue to make available for purchase any policy form or certificate form issued after May 31, 2010 that has been approved by the commissioner. A policy or certificate form will not be considered to by available for purchase unless the issuer actively offered it for sale within the previous twelve months. This is changed from an issue date of August 1, 1992.
Finally, the proposed rule also expands the category of eligible persons who are guaranteed issuance of Medicare supplements or Medicare replacement policies to those whose payments for coverage substantially increase or to those whose plans terminate or cease to provide some or all such supplemental health benefits. The amount an individual pays for coverage under the plan is considered to substantially increase if the amount the individual pays for coverage under the plan increases by more than 25% from one 12-month period to the subsequent 12-month period, and the new payment for the employer-sponsored coverage is greater than the premium charged under the Medicare supplement plan for which the individual is applying. An issuer may require reasonable documentation to substantiate the increase of the cost of the coverage to the individual.
A second new guaranteed issue time period will arise when a hospitals leaves a Medicare Select network. The issuer shall notify the insured that a hospital is leaving the Medicare Select network and that there is no other hospital within a 30-minute or 30-mile radius of the policyholder. This will trigger a guarantee issue opportunity for the insured affected by the change in network to purchase a new Medicare supplemental policy without being newly underwritten by the issuer.
Comparison with federal regulations
The proposed rule amendments will bring the rule in closer compliance with the NAIC Model Act. There are no existing or proposed federal regulations relating to the proposed changes in guarantee issue eligibility.
Comparison of similar rules in adjacent states
Illinois
Illinois has adopted the NAIC Model regulation creating the new Medigap plans M and N, and to incorporate the hospice care benefit as well as the new and innovative benefit requirements as required by MIPPA. No other state has the guarantee issue provisions as revised or access requirements.
Iowa
Iowa makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Iowa has adopted the NAIC Model regulation as required. No other state has the guarantee issue provisions as revised or access requirements.
Michigan
Michigan makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Michigan has not yet passed legislation to create new Medigap plans M and N, and to incorporate the hospice care benefit as well as the new and innovative benefit requirements as required by MIPPA. No other state has the guarantee issue provisions as revised or access requirements.
Minnesota
Minnesota, like Wisconsin, received a waiver from the federal standardization regulations. Minnesota makes available to its Medicare beneficiaries two standardized policies (basic and extended basic). Minnesota has adopted the GINA requirements of the NAIC Model regulation but as a waived state will not promulgate the MIPPA changes. No other state has the guarantee issue provisions as revised or access requirements.
Summary of factual data and analytical methodologies
CMS data indicate that Medicare currently covers 40 million Americans, 814,183 of whom are Wisconsin residents as of 2004. An estimated 27 percent of Medicare beneficiaries are covered by Medigap policies.
Information collected by the OCI indicates that 75 insurance companies offer Medicare supplement, Medicare cost and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability. In addition, there are 25 insurance companies that have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin. At year end 2007, there were 247,142 Wisconsin Medicare beneficiaries with Medigap policies. The majority of these Wisconsin Medicare beneficiaries have Medigap policies that will be affected by the Medigap reforms under the MIPPA.
A 2000 report by CMS, Office of Research, Development, and Information, based on 2007 Medicare data indicates that Medicare paid 54-56% of the health care expenses of persons 65 or over, and private health insurance, including Medicare supplement policies paid 16% of these health care expenses. The report indicated that overall annual medical expenses in 2005 per Medicare beneficiary equaled $6,697.
Analysis and supporting documents used to determine rule's effect on small businesses
OCI reviewed financial statements and other reports filed by life, accident and health issuers and determined that none qualifies as a small business. Wisconsin currently has 75 insurance companies offering Medicare supplement, Medicare cost and Medicare select insurance plans. None of these issuers meets the definition of a small business under s.
227.114, Wis. Stats.
There may be limited effects on intermediaries, however the requirement will not be significant and will mainly be comprised of learning new products and options for seniors.
Small Business Impact
This rule does not impose any additional requirements on small businesses.
This rule does not have a significant impact on regulated small businesses as defined in s.
227.114 (1), Wis. Stats., including intermediaries. OCI maintains a database of all licensed issuers in Wisconsin. The database includes information submitted by the companies related to premium revenue and employment. In an examination of this database, OCI identified that 75 insurance companies offer Medicare supplement, Medicare cost and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability and none of those companies qualify by definition as a small business. In addition, 25 insurance companies have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin. Again, none of these 25 companies qualifies by definition as a small business. Although affected by this proposed rule change, intermediaries qualifying as small businesses may be affected but such effect will not be significant as previously described.
Pursuant to s.
227.114, Stats., the proposed rule may have an effect on small businesses. The initial regulatory flexibility analysis is as follows:
Initial regulatory flexibility analysis
Types of small businesses affected
Insurance intermediaries.
Description of reporting and bookkeeping procedures required
None beyond those currently required.
Description of professional skills required
None beyond those currently required.
Small business regulatory coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
eileen.mallow@wisconsin.gov
Fiscal Estimate
State fiscal effect
None.
Local government fiscal effect
None.
Long-range fiscal implications
None.
Private sector impact
The proposed rule will not significantly impact the private sector. Issuers offering Medigap policies (Medicare supplement, Medicare cost, and Medicare select policies) will incur costs associated with developing new Medigap policies and marketing materials, mailing riders and explanatory materials to existing policyholders and reprogramming claim processing systems. However, these costs are offset by the issuers' ability to continue offering Medigap policies to Wisconsin consumers and will not be significant. Intermediaries will need to use the newly developed forms and may incur nominal printing costs if the issuers do not provide forms to the agents, but such costs will not be significant.
Notice of Hearings
Natural Resources
Fish, Game, etc., Chs.
NR 1—
NOTICE IS HEREBY GIVEN that pursuant to ss.
29.0916 and
227.11, Stats., the Department of Natural Resources (DNR) will hold public hearings on the creation of Chapter
NR 52, Wis. Adm. Code, relating to public use of lands acquired under the Knowles-Nelson Stewardship Program.
Hearing Information
The hearings will begin at 6:30 p.m. on the following dates and locations:
October 14, Wednesday
DNR West Central Region Headquarters (Room 158/185)
1300 West Clairemont
Eau Claire, WI 54702
October 15, Thursday
Nicolet Area Technical College —
Learning Resources Center Theater
5364 College Drive
Rhinelander, WI 54501
October 20, Tuesday
Madison Area Technical College, Truax Campus
Student Lounge – 142C
3550 Anderson St.
Madison, WI 53704
October 21, Wednesday
Northeast Wisconsin Technical College
Room CB213 C&D
2740 W. Mason Street
Green Bay, 54307
October 22, Thursday
UW Washington County (Lecture Hall 201)
400 S University Drive
West Bend, WI 53095
A 30-minute informational briefing on the Knowles-Nelson Stewardship Program will precede the hearing (beginning at 6:00 p.m.). The hearings will begin at 6:30 p.m. with an overview of s.
23.0916, Stats., and an overview of the proposed rule. Public Comments will be accepted beginning at 7:00 p.m.
Pursuant to the Americans with Disabilities Act, reasonable accommodations, including the provision of informational material in an alternative format, will be provided for qualified individuals with disabilities upon request. Please contact Doug Haag at (608) 266-2136 or
DouglasJ.Haag@wisconsin.gov with specific information on your request at least 10 days before the date of the scheduled hearing.
Submission of Written Comments and Copies of Proposed Rule
The proposed rule and fiscal estimate may be reviewed and comments electronically submitted at the following Internet site:
http://adminrules.wisconsin.gov (search using keyword “NR 52"). Written comments on the proposed rule may also be submitted via U.S. mail to Mr. Douglas Haag, Bureau of Facilities and Lands, P.O. Box 7921, Madison, WI 53707 or by email to
DouglasJ.Haag@Wisconsin.gov. Comments may be submitted until October 30, 2009. Written comments whether submitted electronically or by U.S. mail will have the same weight and effect as oral statements presented at the public hearings. If you do not have Internet access, a personal copy of the proposed rule and fiscal estimate may be obtained from Mr. Haag at the address above or by calling (608) 266-2136.
