OLR Bill Analysis

HB 5259

AN ACT CONCERNING REFUNDS OF PREPAID PREMIUMS MADE BY SENIOR CITIZENS TO HEALTH INSURANCE PROVIDERS FOR MEDICARE SUPPLEMENT POLICIES.

SUMMARY:

This bill requires insurers, HMOs, or other entities that issue, continue, or renew Medicare supplement policies or certificates to refund to people who cancel their Medicare supplement policies any premium they prepaid for coverage that will not be used because of the cancellation.

EFFECTIVE DATE: October 1, 2007

BACKGROUND

Medicare Supplement

A Medicare supplement policy (also referred to as “Medigap”) is a health insurance policy that covers some of the health care costs that Medicare does not cover. States retain regulatory authority over policies that meet minimum standards set forth in federal law and by the National Association of Insurance Commissioners.

There are 12 standard Medicare supplement policies called plans “A” through “L. ” Plan A covers only basic benefits and plans B through J offer additional benefits. Plans K and L include reduced first dollar coverage. One covers 50% of Medicare Parts A and B cost-sharing amounts and limits out-of-pocket expenses to $ 4,000, subject to an annual inflationary adjustment. The other covers 75% of the cost-sharing and limit out-of-pocket expenses to $ 2,000.

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable

Yea

19

Nay

0

(03/13/2007)