Common use of House Bill Clause in Contracts

House Bill. The provision would prohibit, effective January 1, 2006, the issuance of new Medigap policies with prescription drug coverage. The prohibition would not apply to policies replacing another policy with drug coverage. Beneficiaries could keep their existing policies. Further, it would not apply to policies meeting new standards, as outlined below. The provision would guarantee issuance of a substitute Medigap policy for persons, enrolling in Part D, who at the time of such enrollment were enrolled in and terminated enrollment in a Medigap policy H, I, or J. The guaranteed enrollment would be for any of the Plans A through Plan G. The guarantee would apply for enrollments occurring in the new Medigap plan within 63 days of termination of enrollment in a Medigap drug Plan H, I, or J. The insurer could not impose an exclusion based on a pre-existing condition for such individuals. Further, the insurer would be prohibited from discriminating in the pricing of such policy on the basis of the individual’s health status, claims experience, receipt of health care or medical condition. The provision would provide for the development by the NAIC of two new standardized Medigap plans and would outline the standards for these policies. The first new policy would have the following benefits (notwithstanding other provisions of law relating to core benefits): 1) coverage of 50% of the cost-sharing otherwise applicable (except coverage of 100% cost-sharing applicable for preventive benefits); 2) no coverage of the Part B deductible; 3) coverage of all hospital coinsurance for long stays (as in current core package); and 4) a limitation on annual out-of-pocket costs of $4,000 in 2006 (increased in future years by an appropriate inflation adjustment as specified by the Secretary). The second new policy would have the same benefit structure as the first new policy, except that: 1) coverage would be provided for 75%, rather than 50%, of cost-sharing otherwise applicable; and 2) the limitation on out-of-pocket costs would be $2,000, rather than $4,000. Both policies could provide for coverage of Part D cost-sharing; however, neither policy could cover the Part D deductible. Senate Bill Effective January 1, 2006, Medigap drug policies could not be sold, issued or renewed for Part D enrollees. Persons who had such policies could obtain Medigap coverage without drug benefits. Beneficiaries who sought to enroll during the Part D open enrollment period established for current beneficiaries would be guaranteed issuance of such non-drug policies (without an exclusion based on preexisting conditions). Medigap issuers would be required to notify individuals of these changes 60 days prior to the Part D open enrollment period. Medigap insurers could not be required to participate as an eligible entity under the new Part D.