Requires insurers offering renewal of certain Medicare supplemental insurance policies or providing notification of a change in premiums of such policies to notify policyholders of the availability of policies offered by such insurer with similar benefits at a comparable premium or the ability of such policyholder to purchase a different policy without the pre-existing condition waiting period; applies to policies for which such insurers no longer accept new contracts but continue to renew for existing policyholders.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5445
SPONSOR: Cook (MS) TITLE OF BILL:
An act to amend the insurance law, in relation to providing disclosure
to medicare supplemental insurance policy holders regarding the rights
of such holders at the time of a rate change
PURPOSE OR GENERAL IDEA OF BILL:
The bill would help senior citizens maintain their Medicare Supplemental
health insurance coverage.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 would add a new § 3218-a to require commercial insurers, that
are seeking to raise premiums or change benefits on products no longer
being sold to new policyholders, to notify seniors when comparable poli-
cies are available for lower premiums, and also provide disclosure to
the effect that switching policies may not require a pre-existing condi-
tion waiting period.
§ 2 adds a new § 4328 to require said disclosure by not-for-profit
insurance corporations and 1-INIOs.
§ 3 would establish the effective date of January first next succeeding
the date on which it shall have become law and shall apply to all poli-
cies issued, renewed, modified or altered on or after such date.
JUSTIFICATION:
The term "closed block" refers to a situation that results when an
insurer continues to allow individuals to renew their insurance poli-
cies, that no longer offers the policies to new customers. In health
insurance, closed blocks inevitably lead to escalating prices, as the
number of claims increases with the age of the policyholders and there
are no younger, healthier customers buying the policies and balancing
out the claims experience. Sometimes, consumers are unaware that they
have the option of leaving the closed block and shopping around for a
new policy.
That was the case this year, when an upstate insurer sent out renewal
notices to Medicare Supplement customers with older policies in a closed
block for a 160% increase in premiums. These customers had no way of
knowing that newer policies with almost exactly the same benefits were
available at a lower premium than they were currently paying - and with-
out a 160% increase -- from the very same company. This bill would
require insurers issuing these closed block renewal notices, or notify-
ing customers of premium or benefit changes, to provide written disclo-
sure to customers of their ability to switch plans without a preexisting
condition waiting period so long as they have been continuously covered
for at least six months and the availability of products with Similar
benefits at lower rates from the same or other insurers.
LEGISLATIVE HISTORY:
Previously introduced. A. 4399 - 2021/22 - A.8578 - 2019/20
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on January first next succeeding the date on
which it shall have become law and shall apply to all policies issued,
renewed, modified or altered on or after such date.
STATE OF NEW YORK
________________________________________________________________________
5445
2023-2024 Regular Sessions
IN ASSEMBLY
March 10, 2023
___________
Introduced by M. of A. COOK, WEPRIN, REYES -- Multi-Sponsored by -- M.
of A. GLICK, PEOPLES-STOKES -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to providing disclosure
to medicare supplemental insurance policy holders regarding the rights
of such holders at the time of a rate change
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 3218-a
2 to read as follows:
3 § 3218-a. Required disclosure to Medicare supplemental insurance poli-
4 cy holders. (a) Every insurer offering a renewal of a contract to a
5 closed block member, or notifying such closed block member of a proposed
6 or approved change in the premiums or the benefits under such contract,
7 shall notify such member in writing, in a form approved by the super-
8 intendent, of: (1) the ability of such member to purchase a different
9 policy without undergoing a pre-existing condition waiting period
10 providing there was continuous coverage the previous six months; and (2)
11 the availability of any policy or contract offered by such insurer
12 providing similar benefits at a lower premium, and a toll-free telephone
13 number and internet website where such member may find information
14 regarding policies providing similar benefits offered by another insur-
15 er, a corporation organized pursuant to article forty-three of this
16 chapter, or an organization certified pursuant to article forty-four of
17 the public health law.
18 (b) For the purposes of this section, "closed block member" shall mean
19 the holder of a contract of Medicare supplemental insurance issued by an
20 insurer pursuant to a form for which such insurer no longer solicits or
21 accepts new policyholders, but continues to offer renewal contracts to
22 existing policyholders under such form.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08253-01-3
A. 5445 2
1 § 2. The insurance law is amended by adding a new section 4331 to read
2 as follows:
3 § 4331. Required disclosure to Medicare supplemental insurance policy
4 holders. (a) Every corporation offering a renewal of a contract to a
5 closed block member, or notifying such closed block member of a proposed
6 or approved change in the premiums or the benefits under such contract,
7 shall notify such member in writing, in a form approved by the super-
8 intendent, of: (1) the ability of such member to purchase a different
9 contract without undergoing a pre-existing condition waiting period
10 providing there was continuous coverage the previous six months; and (2)
11 the availability of any policy or contract offered by such corporation
12 providing similar benefits at a lower premium, and a toll-free telephone
13 number and internet website where such member may find information
14 regarding contracts providing similar benefits offered by another insur-
15 er, a corporation organized pursuant to this article, or an organization
16 certified pursuant to article forty-four of the public health law.
17 (b) For the purposes of this section, "closed block member" shall mean
18 the holder of a contract of Medicare supplemental insurance issued by a
19 corporation pursuant to a form for which such corporation no longer
20 solicits or accepts new subscribers, but continues to offer renewal
21 contracts to existing subscribers under such form.
22 § 3. This act shall take effect on January first next succeeding the
23 date on which it shall have become a law and shall apply to all policies
24 issued, renewed, modified or altered on or after such date.
