CHAPTER 1652. MEDICARE SUPPLEMENT BENEFIT PLANS
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE I. SPECIALIZED COVERAGES
CHAPTER 1652. MEDICARE SUPPLEMENT BENEFIT PLANS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1652.001. DEFINITIONS. In this chapter:
(1) "Applicant" means:
(A) an individual who seeks to contract for insurance or other
health benefits under an individual Medicare supplement benefit
plan; or
(B) the proposed certificate holder of a group Medicare
supplement benefit plan.
(2) "Approved regulatory program" means a state regulatory
program that complies with the requirements of Section 1882,
Social Security Act (42 U.S.C. Section 1395ss).
(3) "Medicare" means the Health Insurance for the Aged Act (42
U.S.C. Section 1395 et seq.), as amended.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.002. MEDICARE SUPPLEMENT BENEFIT PLAN. (a) "Medicare
supplement benefit plan" means a group or individual policy of
accident and health insurance, a subscriber contract of a group
hospital service corporation operating under Chapter 842, or, to
the extent required by federal law, an evidence of coverage
issued by a health maintenance organization operating under
Chapter 843 that is advertised, marketed, or designed primarily
as a supplement to reimbursements under Medicare for the
hospital, medical, or surgical expenses of an individual eligible
for Medicare.
(b) A policy, contract, subscriber contract, or evidence of
coverage is not considered to be a Medicare supplement benefit
plan if it is:
(1) a policy, contract, subscriber contract, or evidence of
coverage of one or more employers or labor organizations, or of
the trustees of a fund established by one or more employers or
labor organizations, or a combination, for employees or former
employees, or a combination, or for members or former members, or
a combination, of the labor organizations;
(2) a policy or health care benefit plan, including a policy or
contract of group insurance, a group contract of a group hospital
service corporation operating under Chapter 842, or a group
evidence of coverage issued by a health maintenance organization
operating under Chapter 843 that is not marketed or held to be a
Medicare supplement benefit plan; or
(3) an individual or group evidence of coverage issued in
accordance with a contract under Section 1833 or 1876, Social
Security Act (42 U.S.C. Section 1395l or 1395mm), by a health
maintenance organization operating under Chapter 843.
(c) The commissioner by rule may modify the definition of
"Medicare supplement benefit plan" provided by Subsection (a) to
the extent necessary for this state to qualify as a state with an
approved regulatory program.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.003. APPLICABILITY OF CHAPTER. This chapter applies
to an individual or group Medicare supplement benefit plan
delivered or issued for delivery in this state and, regardless of
the place where the plan was delivered or issued for delivery, a
certificate that was issued under a group Medicare supplement
benefit plan and delivered or issued for delivery in this state,
if the plan or certificate is issued by:
(1) a capital stock insurance company, including a life, health
and accident, and general casualty insurance company;
(2) a mutual life insurance company;
(3) a mutual assessment life insurance company, including a
statewide mutual assessment company, local mutual aid
association, and burial association;
(4) a mutual or mutual assessment association of any kind,
including an association subject to Section 887.102;
(5) a mutual insurance company other than a life insurance
company;
(6) a mutual or natural premium life or casualty insurance
company;
(7) a fraternal benefit society;
(8) a Lloyd's plan;
(9) a reciprocal or interinsurance exchange;
(10) a nonprofit hospital, medical, or dental service
corporation, including a corporation operating under Chapter 842;
(11) a stipulated premium company;
(12) another insurer that by law is required to be authorized by
the department; or
(13) a health maintenance organization operating under Chapter
843, to the extent required by federal law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.004. CONSTRUCTION OF CHAPTER. (a) This chapter may
not be construed to enlarge the powers of an entity described by
Section 1652.003.
(b) This chapter controls to the extent of any conflict with
another provision of this code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.005. RULES NECESSARY FOR CERTIFICATION. In addition
to other rules required or authorized by this chapter, the
commissioner shall adopt reasonable rules necessary and proper to
carry out this chapter, including rules adopted in accordance
with federal law relating to the regulation of Medicare
supplement benefit plan coverage that are necessary for this
state to obtain or retain certification as a state with an
approved regulatory program.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
SUBCHAPTER B. BENEFITS
Sec. 1652.051. MINIMUM STANDARDS. (a) The commissioner shall
adopt reasonable rules to establish specific standards for
provisions in Medicare supplement benefit plans and standards for
facilitating comparisons of different Medicare supplement benefit
plans. The standards are in addition to and must be in accordance
with:
(1) applicable laws of this state, including Chapters 842 and
1201;
(2) applicable federal law, rules, regulations, and standards;
and
(3) any model rules and regulations required by federal law,
including Section 1882, Social Security Act (42 U.S.C. Section
1395ss).
(b) The standards may include provisions relating to:
(1) terms of renewability;
(2) initial and subsequent conditions of eligibility;
(3) nonduplication of coverage;
(4) probationary periods;
(5) benefit limitations, exceptions, and reductions;
(6) elimination periods;
(7) requirements for replacement;
(8) recurrent conditions;
(9) definitions of terms; and
(10) exclusions required by state or federal law.
(c) The commissioner may adopt reasonable rules that
specifically prohibit benefit plan provisions that:
(1) are not otherwise specifically authorized by statute; and
(2) the commissioner determines are unjust, unfair, or unfairly
discriminatory to a person who is covered or proposed for
coverage.
(d) Rules adopted under this section must include requirements
that are at least equal to those required by federal law, rules,
regulations, and standards, including Section 1882, Social
Security Act (42 U.S.C. Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.052. MINIMUM STANDARDS FOR BENEFITS AND CLAIM
PAYMENTS. (a) The commissioner shall adopt reasonable rules to
establish minimum standards for benefits and claim payments under
Medicare supplement benefit plans.
(b) The standards for benefits and claim payments must include
the requirements for certification of Medicare supplement benefit
plans prescribed by Section 1882, Social Security Act (42 U.S.C.
Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.053. DUPLICATE BENEFITS PROHIBITED. A Medicare
supplement benefit plan or certificate in force in this state may
not contain benefits that duplicate benefits provided by
Medicare.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.054. BASIC PLAN. An entity described by Section
1652.003 that offers for sale in this state a Medicare supplement
benefit plan must offer a basic Medicare supplement benefit plan
that:
(1) provides only those benefits common to all Medicare
supplement benefit plans; and
(2) meets but does not exceed the minimum standards of benefits
for Medicare supplement benefit plans adopted by the commissioner
and authorized by Section 1882, Social Security Act (42 U.S.C.
Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.055. ADDITIONAL BENEFITS. (a) In addition to the
basic Medicare supplement benefit plan described by Section
1652.054, an entity may offer additional Medicare supplement
benefit plans for sale in this state.
(b) The combination of benefits provided by an additional plan
must conform to one of the benefit packages adopted by the
commissioner and authorized by Section 1882, Social Security Act
(42 U.S.C. Section 1395ss).
(c) The commissioner by rule shall provide for the approval of
new or innovative benefits that may be provided in a plan other
than the basic plan and that otherwise comply with this
subchapter. The benefits must:
(1) be offered in a manner consistent with the goal of Medicare
supplement benefit plan simplification; and
(2) meet the requirements prescribed by Section 1882, Social
Security Act (42 U.S.C. Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.056. COVERAGE FOR MAMMOGRAPHY. (a) In this section,
"low-dose mammography" means the x-ray examination of the breast
using equipment dedicated specifically for mammography, including
the x-ray tube, filter, compression device, screens, films, and
cassettes, with an average radiation exposure delivery of less
than one rad mid-breast, with two views for each breast.
(b) Each Medicare supplement benefit plan must include coverage
for an annual screening by low-dose mammography for the presence
of occult breast cancer.
(c) The coverage for the annual screening may not be less
favorable than coverage for other radiological examinations and
must be subject to the same dollar limits, deductibles, and
coinsurance factors.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.057. WAIVER OF WAITING PERIOD. (a) An entity that
delivers or issues for delivery in this state a Medicare
supplement benefit plan or certificate that replaces a Medicare
supplement benefit plan or certificate shall give credit for the
satisfaction or partial satisfaction of any waiting period,
elimination period, or probationary period for a preexisting
condition that has been satisfied under the plan being replaced.
(b) A replacement plan that clearly provides a new or additional
benefit may include appropriate and clearly stated periods as a
condition for payment of the new or additional benefit.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.058. COVERAGE FOR PREEXISTING CONDITION. (a) A
Medicare supplement benefit plan may not contain a provision that
excludes coverage for a claim for losses incurred more than six
months after the effective date of coverage for a preexisting
condition.
(b) A Medicare supplement benefit plan may not define a
preexisting condition more restrictively than a condition for
which medical advice was given or treatment was recommended by or
received from a physician within six months before the effective
date of coverage.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
SUBCHAPTER C. LOSS RATIO STANDARDS
Sec. 1652.101. LOSS RATIO STANDARDS. (a) A Medicare supplement
benefit plan must return to a plan holder benefits that are
reasonable in relation to the premium charged.
(b) The commissioner shall adopt reasonable rules to establish
minimum loss ratio standards for Medicare supplement benefit
plans. The standards must be established:
(1) on the basis of incurred claims experience and earned
premiums for the entire period for which rates are computed to
provide coverage;
(2) in accordance with accepted actuarial principles and
practices; and
(3) to the extent necessary for the state to obtain or retain
certification as a state with an approved regulatory program.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.102. FILING REQUIREMENTS. (a) Annually, each entity
providing Medicare supplement benefit plans in this state shall
file with the department the entity's rates, rating schedule, and
supporting documentation demonstrating that:
(1) the entity is complying with the applicable loss ratio
standards of this state; and
(2) the actual and expected losses in relation to premiums
comply with the requirements of this subchapter and the rules
adopted by the commissioner.
(b) The documentation required by Subsection (a) must include a
report of the ratio of incurred losses to covered premiums for
the preceding calendar year, illustrated by calendar year of
issue.
(c) The commissioner may adopt rules relating to filing
requirements for rates, rating schedules, and loss ratios.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.103. REVIEW OF PREMIUM INCREASES. (a) The
commissioner by rule shall provide a process for reviewing and
approving or disapproving a proposed premium increase relating to
a Medicare supplement benefit plan.
(b) The rules must comply with federal law, including Section
1882, Social Security Act (42 U.S.C. Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.104. BENEFIT CHANGES. (a) Before the date on which a
Medicare benefit change required by federal law takes effect,
each entity providing in this state a Medicare supplement benefit
plan existing on the effective date of the change shall file with
the commissioner, in accordance with Chapter 1701:
(1) each appropriate premium adjustment necessary to produce the
loss ratios originally anticipated for the applicable plan,
accompanied by any supporting documents necessary to justify the
adjustment; and
(2) each appropriate rider, endorsement, or plan form necessary
to modify the coverage so as to eliminate benefit duplications
with Medicare.
(b) A rider, endorsement, or plan form required by Subsection
(a) must provide a clear description of the Medicare supplement
benefits provided by the plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.105. REPORTING LOSS RATIO INFORMATION TO SECRETARY OF
HEALTH AND HUMAN SERVICES. To the extent necessary for this
state to obtain or retain certification as a state with an
approved regulatory program, the department shall comply with
federal requirements relating to periodic reporting of loss ratio
information to the secretary of health and human services, based
on a uniform methodology, as authorized by federal law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
SUBCHAPTER D. CONSUMER INFORMATION AND NOTICE
Sec. 1652.151. RULES RELATING TO DISCLOSURE. The rules adopted
under Sections 1652.152, 1652.153, and 1652.154 must include
provisions and requirements that are at least equal to those
required by federal law, including the rules, regulations, and
standards adopted under Section 1882, Social Security Act (42
U.S.C. Section 1395ss).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.152. OUTLINE OF COVERAGE. (a) To provide for full
and fair disclosure in the sale of Medicare supplement benefit
plans, a Medicare supplement benefit plan or certificate may not
be delivered or issued for delivery in this state unless an
outline of coverage that complies with this section is delivered
to the applicant when the applicant applies for the coverage.
(b) The commissioner by rule shall prescribe the format and
content of the outline of coverage required by Subsection (a).
The rules must address the style, arrangement, and overall
appearance of the outline of coverage, including the size, color,
and prominence of type and the arrangement of text and captions.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.153. INFORMATIONAL BROCHURE. (a) The commissioner by
rule may prescribe a standard form and the contents of an
informational brochure intended to improve the ability of an
individual eligible for Medicare to understand Medicare and to
select the most appropriate Medicare supplement coverage.
(b) Except as provided by Subsection (c), the commissioner by
rule may require that the informational brochure be provided to
an individual eligible for Medicare concurrently with delivery of
the outline of coverage.
(c) If the plan is a direct response Medicare supplement benefit
plan, the commissioner by rule may require that the informational
brochure be provided on request to an individual eligible for
Medicare at any time not later than the time the plan is
delivered.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.154. NOTICE RELATING TO OTHER TYPES OF COVERAGE. (a)
The commissioner may adopt reasonable rules for captions or
notice requirements for each accident and health insurance
policy, subscriber contract, or evidence of coverage sold to an
individual eligible for Medicare that are determined to be in the
public interest and designed to inform the individual that a
particular coverage is not a Medicare supplement benefit plan.
This subsection does not apply to:
(1) a Medicare supplement benefit plan;
(2) a disability income policy;
(3) a basic, catastrophic, or major medical expense policy;
(4) a single premium nonrenewable policy; or
(5) another policy, contract, or subscriber contract described
by Section 1652.002(b)(1) or (2).
(b) The commissioner may adopt reasonable rules to govern the
full and fair disclosure of information relating to replacing an
accident and health insurance policy, a subscriber contract, or a
certificate by an individual eligible for Medicare.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.155. RIGHT TO RETURN FOR REFUND; NOTICE. (a) If an
applicant is not satisfied for any reason after examining a
Medicare supplement benefit plan document or certificate, the
applicant is entitled to receive a refund of the premium if the
applicant returns the document or certificate not later than the
30th day after the date it is delivered.
(b) The entity issuing the plan or certificate shall refund the
premium directly to the applicant in a timely manner.
(c) A Medicare supplement benefit plan or certificate must have
a notice stating the substance prescribed by Subsection (a)
prominently printed on the first page of or attached to the plan
or certificate.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.156. ADVERTISING FILING REQUIREMENTS. (a) The
commissioner shall adopt reasonable rules to require each entity
described by Section 1652.003 to file with the department a copy
of any advertisement relating to Medicare supplement benefit
plans that the entity intends to use in this state. The rules
must require that the entity file the copy not later than the
60th day before the date of intended use.
(b) At the expiration of the 60-day period provided by
Subsection (a), an advertisement filed in accordance with that
subsection is considered acceptable, unless before the end of
that 60-day period the department notifies the entity of the
advertisement's nonacceptance.
(c) An entity may not use an advertisement for Medicare
supplement benefit plans that does not comply with state law,
including department rules and Section 541.084.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
475, Sec. 3, eff. September 1, 2007.
SUBCHAPTER E. AGENTS
Sec. 1652.201. INFORMATION PROVIDED TO AGENTS. (a) An entity
that offers a Medicare supplement benefit plan for sale in this
state shall provide to each agent authorized to sell that plan
information relating to:
(1) Medicare;
(2) the Medicare supplement benefit plans offered by that
entity; and
(3) the agent's ethical obligations to clients.
(b) The commissioner by rule may prescribe the information that
must be provided under this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
Sec. 1652.202. PERMITTED COMPENSATION ARRANGEMENTS. (a) The
commissioner by rule shall limit the commission or other
compensation that may be paid to an agent for the sale of a
Medicare supplement benefit plan or certificate, including a
replacement plan or certificate.
(b) The rules must conform to, but may not be more restrictive
than, the requirements of federal law necessary for this state to
obtain or retain certification as a state with an approved
regulatory program.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 4, eff. April 1,
2005.
SUBCHAPTER F. OUTPATIENT PRESCRIPTION DRUGS
Sec. 1652.251. OUTPATIENT PRESCRIPTION DRUG BENEFIT PLANS. (a)
An entity described by Section 1652.003 that issues a Medicare
supplement benefit plan in this state may offer a group or
individual policyholder:
(1) an outpatient prescription drug benefit plan authorized
under 42 U.S.C. Section 1395ss; or
(2) a new or innovative outpatient prescription drug benefit
plan filed with and approved by the commissioner under Section
1652.055.
(b) The commissioner shall approve or disapprove an outpatient
drug benefit plan described by Subsection (a) that is filed for
approval under Section 1652.055 not later than the 60th day after
the date the entity files the plan with the department. A drug
benefit plan that has not been approved or disapproved by the
commissioner before the 61st day after the date the plan is filed
with the department is considered approved on that day.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.075(a), eff. September 1, 2005.
Sec. 1652.252. PRESCRIPTION DRUG DISCOUNT PROGRAMS. (a) In
this section, "prescription drug discount program" means any
program that entitles a participant to purchase prescription
drugs or other medical supplies and services from vendors at a
discount under an agreement made with a participating pharmacy.
(b) An entity described by Section 1652.003 may offer
participation in a prescription drug discount program in
connection with the solicitation of an application for issuance
of a Medicare supplement benefit plan.
(c) An offer of participation in a prescription drug discount
program described by this section is not a violation of Chapter
541 or any other law prohibiting the offer of rebates in the
solicitation of insurance policies.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.075(a), eff. September 1, 2005.