Medicare supplement benefit coverage.

Existing federal law provides for the Medicare Program, which is a public health insurance program for persons 65 years of age and older and specified persons with disabilities who are under 65 years of age. Under the Medicare Program, eligible persons receive various health care services, including medically necessary services and supplies and preventive services. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a violation of the act a crime. Existing law provides for the licensure and regulation of health insurers by the Insurance Commissioner. Under existing law, a health plan or health insurer that issues a Medicare supplement contract or policy, as defined, is required to comply with requirements, in addition to those generally imposed on health care service plan contracts and health insurance policies. Existing law authorizes a health plan or health insurer with the prior approval of the department or commissioner, respectively, to offer a Medicare supplement contract or policy with new or innovative benefits, in addition to the standardized benefits provided in a contract or policy that otherwise complies with the applicable standards. Existing law imposes an annual open enrollment period of a minimum of 30 days to purchase a Medicare supplement contract or policy, and requires a health plan or health insurer to notify an enrollee or policyholder of specified rights prior to the open enrollment period. This bill would exclude outpatient prescription drug benefits as a new or innovative benefit. The bill, commencing July 1, 2020, would require the portion of the premium attributed to the new or innovative benefits to be identified as a separate line item on the payment invoice or bill. The bill would require the Department of Managed Health Care and the Department of Insurance to collaborate with specified individuals and entities, including consumer group representatives, to develop and implement various policies and procedures related to the new requirements, such as standardizing the new or innovative benefits approved for sale. The bill would authorize the Director of the Department of Managed Health Care and the Insurance Commissioner to issue, on or before July 1, 2020, guidance on these requirements, and would require the guidance to be effective only through December 31, 2022, or until the director and the commissioner promulgate regulations. The bill would extend the annual open enrollment period to a minimum of 60 days to purchase a Medicare supplement contract or policy, would require a health plan or health insurer to notify an enrollee or policyholder of specified rights on any notice related to a benefit modification or premium adjustment, and would exclude new or innovative benefits from the determination of whether benefits are equal to or lesser than those provided by the previous coverage. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.