SEC. 271. DUPLICATION AND COORDINATION OF MEDICARE-RELATED PLANS.
Title[ Title II\Subtitle G Contents
Subtitle G--Duplication and Coordination of Medicare-Related Plans
(a) Treatment of Certain Health Insurance Policies as
Nonduplicative.--Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is
amended--
(1) in clause (iii), by striking ``clause (i)'' and
inserting ``clause (i)(II)''; and
(2) by adding at the end the following:
``(iv) For purposes of this subparagraph, a health insurance policy
(other than a Medicare supplemental policy) providing for benefits which
are payable to or on behalf of an individual without regard to other
health benefit coverage of such individual is not considered to
`duplicate' any health benefits under this title, under title XIX, or
under a health insurance policy, and subclauses (I) and (III) of clause
(i) do not apply to such a policy.
``(v) For purposes of this subparagraph, a health insurance policy
(or a rider to an insurance contract which is not a health insurance
policy) is not considered to `duplicate' health benefits under this
title or under another health insurance policy if it--
``(I) provides health care benefits only for long-term care,
nursing home care, home health care, or community-based care, or
any combination thereof,
``(II) coordinates against or excludes items and services
available or paid for under this title or under another health
insurance policy, and
``(III) for policies sold or issued on or after the end of
the 90-day period beginning on the date of enactment of the
Health Insurance Portability and Accountability Act of 1996
discloses such coordination or exclusion in the policy's outline
of coverage.
For purposes of this clause, the terms `coordinates' and `coordination'
mean, with respect to a policy in relation to health benefits under this
title or under another health insurance policy, that the policy under
its terms is secondary to, or excludes from payment, items and services
to the extent available or paid for under this title or under another
health insurance policy.
``(vi)(I) An individual entitled to benefits under part A or
enrolled under part B of this title who is applying for a health
insurance policy (other than a policy described in subclause (III))
shall be furnished a disclosure statement described in clause (vii) for
the type of policy being applied for. Such statement shall be furnished
as a part of (or together with) the application for such policy.
``(II) Whoever issues or sells a health insurance policy (other than
a policy described in subclause (III)) to an individual described in
subclause (I) and fails to furnish the appropriate disclosure statement
as required under such subclause shall be fined under title 18, United
States Code, or imprisoned not more than 5 years, or both, and, in
addition to or in lieu of such a criminal penalty, is subject to a civil
money penalty of not to exceed $25,000 (or $15,000 in the case of a
person other than the issuer of the policy) for each such violation.
``(III) A policy described in this subclause (to which subclauses
(I) and (II) do not apply) is a Medicare supplemental policy or a health
insurance policy identified under 60 Federal Register 30880 (June 12,
1995) as a policy not required to have a disclosure statement.
``(IV) Any reference in this section to the revised NAIC model
regulation (referred to in subsection (m)(1)(A)) is deemed a reference
to such regulation as revised by section 171(m)(2) of the Social
Security Act Amendments of 1994 (Public Law 103-432) and as modified by
substituting, for the disclosure required under section 16D(2),
disclosure under subclause (I) of an appropriate disclosure statement
under clause (vii).
``(vii) The disclosure statement described in this clause for a type
of policy is the statement specified under subparagraph (D) of this
paragraph (as in effect before the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996) for that type of
policy, as revised as follows:
``(I) In each statement, amend the second line to read as
follows:
`THIS IS NOT MEDICARE SUPPLEMENT INSURANCE'.
``(II) In each statement, strike the third line and insert
the following: `Some health care services paid for by Medicare
may also trigger the payment of benefits under this policy.'.
``(III) In each statement not described in subclause (V),
strike the boldface matter that begins `This insurance' and all
that follows up to the next paragraph that begins `Medicare'.
``(IV) In each statement not described in subclause (V),
insert before the boxed matter (that states `Before You Buy This
Insurance') the following: `This policy must pay benefits
without regard to other health benefit coverage to which you may
be entitled under Medicare or other insurance.'.
``(V) In a statement relating to policies providing both
nursing home and non-institutional coverage, to policies
providing nursing home benefits only, or policies providing home
care benefits only, amend the sentence that begins `Federal law'
to read as follows: `Federal law requires us to inform you that
in certain situations this insurance may pay for some care also
covered by Medicare.'.
``(viii)(I) Subject to subclause (II), nothing in this subparagraph
shall restrict or preclude a State's ability to regulate health
insurance policies, including any health insurance policy that is
described in clause (iv), (v), or (vi)(III).
``(II) A State may not declare or specify, in statute, regulation,
or otherwise, that a health insurance policy (other than a Medicare
supplemental policy) or rider to an insurance contract which is not a
health insurance policy, that is described in clause (iv), (v), or
(vi)(III) and that is sold, issued, or renewed to an individual entitled
to benefits under part A or enrolled under part B `duplicates' health
benefits under this title or under a Medicare supplemental policy.''.
(b) Conforming Amendments.--Section 1882(d)(3) (42 U.S.C.
1395ss(d)(3)) is amended--
(1) in subparagraph (C)--
(A) by striking ``with respect to (i)'' and
inserting ``with respect to'', and
(B) by striking ``, (ii) the sale'' and all that
follows up to the period at the end; and
(2) by striking subparagraph (D).
(c) Transitional <<NOTE: 42 USC 1395ss note.>> Provision.--
(1) No penalties.--Subject to paragraph (3), no criminal or
civil money penalty may be imposed under section 1882(d)(3)(A)
of the Social Security Act for any act or omission that occurred
during the transition period (as defined in paragraph (4)) and
that relates to any health insurance policy that is described in
clause (iv) or (v) of such section (as amended by subsection
(a)).
(2) Limitation on legal action.--Subject to paragraph (3),
no legal action shall be brought or continued in any Federal or
State court insofar as such action--
(A) includes a cause of action which arose, or which
is based on or evidenced by any act or omission which
occurred, during the transition period; and
(B) relates to the application of section
1882(d)(3)(A) of the Social Security Act to any act or
omission with respect to the sale, issuance, or renewal
of any health insurance policy that is described in
clause (iv) or (v) of such section (as amended by
subsection (a)).
(3) Disclosure condition.--In the case of a policy described
in clause (iv) of section 1882(d)(3)(A) of the Social Security
Act that is sold or issued on or after the effective date of
statements under section 171(d)(3)(C) of the Social Security Act
Amendments of 1994 and before the end of the 30-day period
beginning on the date of the enactment of this Act, paragraphs
(1) and (2) shall only apply if disclosure was made in
accordance with section 1882(d)(3)(C)(ii) of the Social Security
Act (as in effect before the date of the enactment of this Act).
(4) Transition period.--In this subsection, the term
``transition period'' means the period beginning on November 5,
1991, and ending on the date of the enactment of this Act.
(d) Effective <<NOTE: 42 USC 1395ss note.>> Date.--(1) Except as
provided in this subsection, the amendment made by subsection (a) shall
be effective as if included in the enactment of section 4354 of the
Omnibus Budget Reconciliation Act of 1990.
(2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security
Act, as added by subsection (a), shall only apply to individuals
applying for--
(i) a health insurance policy described in section
1882(d)(3)(A)(iv) of such Act (as added by subsection (a)),
after the date of the enactment of this Act, or
(ii) another health insurance policy after the end of the
30-day period beginning on the date of the enactment of this
Act.
(B) A seller or issuer of a health insurance policy may substitute,
for the disclosure statement described in clause (vii) of such section,
the statement specified under section 1882(d)(3)(D) of the Social
Security Act (as in effect before the date of the enactment of this
Act), without the revision specified in such clause.
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