AMENDMENT OF CERTAIN MISCELLANEOUS PROVISIONS.

SEC. 203. AMENDMENT OF CERTAIN MISCELLANEOUS PROVISIONS. (a) Revision of Medigap Regulations.— 103 STAT. 1982 (1) In general.—Section 1882 of the Social Security Act (42 U.S.C. 1395ss), as amended by section 221(d) of MCCA, is amended— (A) in the third sentence of subsection (a) and in subsection (b)(1), by striking “subsection (k)(3)” and inserting “subsections (k)(3), (k)(4), (m), and (n)”; (B) in subsection (k)— (i) in paragraph (1)(A), by inserting “except as provided in subsection (m),” before “subsection (g)(2)(A)”, and (ii) in paragraph (3), by striking “subsection (1)” and inserting “subsections (1), (m), and (n)”; and (C) by adding at the end the following new subsections; “(m)(1)(A) If, within the 90-day period beginning on the date of the enactment of this subsection, the National Association of Insurance Commissioners (in this subsection and subsection (n) referred to as the ‘Association’) revises the amended NAIC Model Regulation (referred to in subsection (k)(1)(A) and adopted on September 20, 1988) to improve such regulation and otherwise to reflect the changes in law made by the Medicare Catastrophic Coverage Repeal Act of 1989, subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the amended NAIC Model Regulation (referred to in subsection (k)(1)(A)) as revised by the Association in accordance with this paragraph (in this subsection and subsection (n) referred to as the ‘revised NAIC Model Regulation’). “(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the revised NAIC Model Regulation or 1 year after the date the Association first adopts such revised Regulation. “(2)(A) If the Association does not revise the amended NAIC Model Regulation, within the 90-day period specified in paragraph (1)(A), the Secretary shall promulgate, not later than 60 days after the end of such period, revised Federal model standards (in this subsection and subsection (n) referred to as ‘revised Federal model standards’) for medicare supplemental policies to improve such standards and otherwise to reflect the changes in law made by the Medicare Catastrophic Coverage Repeal Act of 1989, subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the revised Federal model standards. “(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the revised Federal model standards or 1 year after the date the Secretary first promulgates such standards. “(3) Notwithstanding any other provision of this section (except as provided in subsection (n))— “(A) no medicare supplemental policy may be certified by the Secretary pursuant to subsection (a), “(B) no certification made pursuant to subsection (a) shall remain in effect, and “(C) no State regulatory program shall be found to meet (or to continue to meet) the requirements of subsection (b)(1)(A), unless such policy meets (or such program provides for the application of standards equal to or more stringent than) the standards set 103 STAT. 1983forth in the revised NAIC Model Regulation or the revised Federal model standards (as the case may be) by the date specified in paragraph (1KB) or (2)(B) (as the case may be). “(n)(1) Until the date specified in paragraph (4), in the case of a qualifying medicare supplemental policy described in paragraph (3) issued in a State— “(A) before the transition deadline, the policy is deemed to remain in compliance with the standards described in subsection (b)(1)(A) only if the insurer issuing the policy complies with the transition provision described in paragraph (2), or “(B) on or after the transition deadline, the policy is deemed to be in compliance with the standards described in subsection (b)(1)(A) only if the insurer issuing the policy complies with the revised NAIC Model Regulation or the revised Federal model standards (as the case may be) before the date of the sale of the policy. In this paragraph, the term ‘transition deadline’ means 1 year after the date the Association adopts the revised NAIC Model Regulation or 1 year after the date the Secretary promulgates revised Federal model standards (as the case may be). “(2) The transition provision described in this paragraph is— “(A) such transition provision as the Association provides, by not later than December 15, 1989, so as to provide for an appropriate transition (i) to restore benefit provisions which are no longer duplicative as a result of the changes in benefits under this title made by the Medicare Catastrophic Coverage Repeal Act of 1989 and (ii) to eliminate the requirement of payment for the first 8 days of coinsurance for extended care services, or “(B) if the Association does not provide for a transition provision by the date described in subparagraph (A), such transition provision as the Secretary shall provide, by January 1, 1990, so as to provide for an appropriate transition described in subparagraph (A). “(3) In paragraph (1), the term ‘qualifying medicare supplemental policy’ means a medicare supplemental policy which has been issued in compliance with this section as in effect on the date before the date of the enactment of this subsection. “(4)(A) The date specified in this paragraph for a policy issued in a State is— “(i) the first date a State adopts, after the date of the enactment of this subsection, standards equal to or more stringent than the revised NAIC Model Regulation (or revised Federal model standards), as the case may be, or “(ii) the date specified in subparagraph (B), whichever is earlier. “(B) In the case of a State which the Secretary identifies, in consultation with the Association, as— “(i) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to meet standards described in subparagraph (A)(i), but “(ii) having a legislature which is not scheduled to meet in 1990 in a legislative session in which such legislation may be considered, the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 103 STAT. 19841990. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature. “(5) In the case of a medicare supplemental policy in effect on January 1, 1990, the policy shall not be deemed to meet the standards in subsection (c) unless each individual who is entitled to benefits under this title and is a policy holder or certificate holder under such policy on such date is sent a notice in an appropriate form by not later than January 31, 1990, that explains— “(A) the changes in benefits under this title effected by the Medicare Catastrophic Coverage Repeal Act of 1989, and “(B) how these changes may affect the benefits contained in such policy and the premium for the policy. “(6)(A) Except as provided in subparagraph (B), in the case of an individual who had in effect, as of December 31, 1988, a medicare supplemental policy with an insurer (as a policy holder or, in the case of a group policy, as a certificate holder) and the individual terminated coverage under such policy before the date of the enactment of this subsection, no medicare supplemental policy of the insurer shall be deemed to meet the standards in subsection (c) unless the insurer— “(i) provides written notice, no earlier than December 15, 1989, and no later than January 30, 1990, to the policyholder or certificate holder (at the most recent available address) of the offer described in clause (ii), and “(ii) offers the individual, during a period of at least 60 days beginning not later than February 1, 1990, reinstitution of coverage (with coverage effective as of January 1, 1990), under the terms which (I) do not provide for any waiting period with respect to treatment of preexisting conditions, (II) provides for coverage which is substantially equivalent to coverage in effect before the date of such termination, and (III) provides for classification of premiums on which terms are at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policy holder or certificate holder had the coverage never terminated. “(B) An insurer is not required to make the offer under subparagraph (AXii) in the case of an individual who is a policyholder or certificate holder in another medicare supplemental policy as of the date of the enactment of this subsection, if (as of January 1, 1990) the individual is not subject to a waiting period with respect to treatment of a preexisting condition under such other policy.”. (b) Adjustment of Contracts With Prepaid Health Plans.—Notwithstanding any other provision of this Act, the amendments made by this Act (other than the repeal of sections 1833(c)(5) and 1834(c)(6) of the Social Security Act) shall not apply to risk-sharing contracts, for contract year 1990— (1) with eligible organizations under section 1876 of the Social Security Act, or (2) with health maintenance organizations under section 1876(i)(2)(A) of such Act (as in effect before February 1, 1985), under section 402(a) of the Social Security Amendments of 1967, or under section 222(a) of the Social Security Amendments of 1972. (c) Notice of Changes.—The Secretary of Health and Human Services shall provide, in the notice of medicare benefits provided under section 1804 of the Social Security Act for 1990, for a descrip-103 STAT. 1985tion of the changes in benefits under title XVIII of such Act made by the amendments made by this Act. (d) Miscellaneous Technical Correction.—Section 221(g)(3) of MCCA is amended by striking “subsection (f)” and inserting “subsection (e)”. (e) Effective Date.—The provisions of this section shall take effect January 1, 1990, except that the amendment made by subsection (d) shall be effective as if included in the enactment of MCCA.