NAC687B.255. Elicitation and dissemination of information regarding existing coverage and its replacement; inclusion of certain statements and questions in application.

     1. An application for a policy to supplement Medicare must include questions designed to elicit information about whether, as of the date of the application, the applicant currently has another policy to supplement Medicare, Medicare Advantage, Medicaid coverage, or another health insurance policy or certificate in force or whether the policy to supplement Medicare or the certificate is intended to replace any other policy or certificate presently in force. A supplementary application or other form containing such questions and statements may be used if it is signed by the applicant and the issuer or its agent.

     2. An application must contain the following statements and questions:

     (a) You do not need more than one policy to supplement Medicare.

     (b) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.

     (c) You may be eligible for benefits under Medicaid and may not need a policy to supplement Medicare.

     (d) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your policy to supplement Medicare may, if requested, be suspended during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days after becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended policy to supplement Medicare or, if that is no longer available, a substantially equivalent policy will be reinstituted if requested within 90 days after loss of eligibility. If the policy to supplement Medicare provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

     (e) If you are eligible for, and have enrolled in a policy to supplement Medicare by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your policy to supplement Medicare can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your policy to supplement Medicare under these circumstances, and later lose your employer or union-based group health plan, your suspended policy to supplement Medicare or, if that is no longer available, a substantially equivalent policy will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the policy to supplement Medicare provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

     (f) Counseling services may be available in your state to provide advice concerning your purchase of a policy to supplement Medicare and concerning medical assistance available through the state Medicaid program, including benefits available to qualified Medicare beneficiaries, as that term is defined in 42 U.S.C. § 1396d(p)(1), and to specified low-income Medicare beneficiaries, as described in 42 U.S.C. § 1396a(a)(10)(E)(iii).

     (g) If you lost or are losing your health insurance coverage and received a notice from your prior insurer saying that you were eligible for guaranteed issue of a policy to supplement Medicare, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our policies to supplement Medicare. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS.

     (h) [Please mark Yes or No below with an “X”]

     To the best of your knowledge,

          (1)     (a)     Did you turn age 65 in the last 6 months?

Yes _____ No _____

                   (b)          Did you enroll in Medicare Part B in the last 6 months?

Yes _____ No _____

                   (c)     If yes, what is the effective date? ___________________________________

          (2)     Are you covered for medical assistance through the state Medicaid program?

[NOTE TO APPLICANT: If you are participating in a “Spend-Down Program” and have not met your “Share of Cost,” please answer NO to this question.]

Yes _____ No _____

If yes,

                   (a)     Will Medicaid pay your premiums for this policy to supplement Medicare?

Yes _____ No _____

                   (b)          Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium?

Yes _____ No _____

          (3)     (a)     If you had coverage from any Medicare plan other than the original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “End” blank.

Start ___/___/___ End ___/___/___

                   (b)          If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new policy to supplement Medicare?

Yes _____ No _____

                   (c)     Was this your first time in this type of Medicare plan?

Yes _____ No _____

                   (d)          Did you drop a policy to supplement Medicare to enroll in the Medicare plan?

Yes _____ No _____

          (4)     (a)     Do you have another policy to supplement Medicare in force?

Yes _____ No _____

                   (b)          If so, with what company, and what plan do you have [optional for Direct Mailers]?

                                                                                                                                                           

                   (c)     If so, do you intend to replace your current policy to supplement Medicare with this policy?

Yes _____ No _____

          (5)     Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union or individual plan)

Yes _____ No _____

                   (a)     If so, with what company and what kind of policy?

                                                                                                                                                           

                                                                                                                                                           

                                                                                                                                                           

                                                                                                                                                           

                   (b)          What are your dates of coverage under the policy?

Start ___/___/___ End ___/___/___

(If you are still covered under the other policy, leave “End” blank.)

     3. An issuer shall provide to the applicant a list of any other policies of health insurance he or she has sold to the applicant. The list must include policies sold to the applicant which are in force at the time of the application and policies sold to the applicant in the previous 5 years which are no longer in force.

     4. If the issuer is a direct response issuer, a copy of the application or supplemental form, signed by the applicant and acknowledged by the issuer, must be returned to the applicant by the issuer upon delivery of the policy to supplement Medicare.

     5. Upon determining that the sale will involve the replacement of coverage to supplement Medicare, the issuer or its agent shall, before issuing or delivering the policy to supplement Medicare or the certificate, furnish the applicant with a notice regarding the replacement of coverage to supplement Medicare. One copy of the notice, signed by the applicant and the agent, must be provided to the applicant and another copy, signed by the applicant, must be retained by the issuer.

     6. A direct response issuer shall deliver the notice required by subsection 5 to the applicant at the time of the issuance of the policy to supplement Medicare.

     7. The notice required by subsection 5:

     (a) Must be in a form prescribed by the Division;

     (b) Must be in not less than 12-point type; and

     (c) Except as otherwise provided in subsection 8, must be in substantially the following form:

NOTICE TO APPLICANT REGARDING REPLACEMENT

OF INSURANCE TO SUPPLEMENT MEDICARE

OR MEDICARE ADVANTAGE

(Insurance company’s name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to terminate existing insurance to supplement Medicare or Medicare Advantage and replace it with a policy to be issued by (company name) Insurance Company. Your new policy will provide 30 days within which you may decide, without cost, whether you desire to keep the policy.

You should review this new coverage carefully. Compare it with all coverage for accidents and sickness you now have. If, after due consideration, you find that the purchase of this coverage to supplement Medicare is a wise decision, you should terminate your present policy to supplement Medicare or Medicare Advantage. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.

STATEMENT TO APPLICATION BY ISSUER, AGENT (BROKER OR OTHER REPRESENTATIVE):

I have reviewed the coverage provided by your current policies of medical or health insurance. This policy to supplement Medicare will not duplicate your existing policy to supplement Medicare or, if applicable, Medicare Advantage because you intend to terminate your existing policy to supplement Medicare or leave your Medicare Advantage plan. The replacement policy is being purchased for the following reason(s) (check one):

                                     Additional benefits.

                                     No change in benefits, but lower premiums.

                                     Fewer benefits and lower premiums.

                                     My plan has outpatient prescription drug coverage, and I am enrolling in Medicare Part D.

                                     Disenrollment from a Medicare Advantage plan. Please explain reason for disenrollment. [optional only for Direct Mailers]

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

                                     Other (please specify).

Note: If the issuer of the policy to supplement Medicare being applied for does not, or is otherwise prohibited from, imposing preexisting condition limitations, please skip to the next statement below. Any health condition which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in the denial of a claim for benefits or a delay in the payment of a claim under the new policy, whereas a similar claim might be payable under your present policy.

     State law provides that your replacement policy or certificate may not contain any new preexisting condition, waiting period, elimination period or probationary period. The issuer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy.

     If you still wish to terminate your present policy and replace it with new coverage, be certain to answer truthfully and completely all questions on the application concerning your medical and health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. (If the policy or certificate is guaranteed issue, this paragraph need not appear.)

     Do not cancel your present policy until you have received your new policy and are sure that you want to keep it.

...................................................................

(Signature of Agent, Broker or Other Representative)*

...................................................................

[Typed Name and Address of Issuer, Agent or Broker]

...................................................................

(Applicant’s Signature)

...................................................................

(Date)

*Signature not required for direct response sales.

     8. The provisions of the replacement notice applicable to preexisting conditions may be deleted by an issuer if the replacement does not involve the application of a new limitation on a preexisting condition.

     (Added to NAC by Comm’r of Insurance, 2-21-89, eff. 3-15-89; A 5-27-92; 7-16-92, eff. 7-30-92; 8-2-94; 5-13-96; A by Div. of Insurance by R078-05, 11-17-2005, eff. 9-8-2005 for Plans K and L, and 1-1-2006 for Medicare Part D Prescription Drug Benefit; A by Comm’r of Insurance by R049-09, 10-27-2009)