PREVENTING DUPLICATION.

SEC. 4351. PREVENTING DUPLICATION. (a) In General.—Subsection (d)(3) of section 1882 (42 U.S.C. 1395ss) is amended— (1) in subparagraph (A)— 104 STAT. 1388–131 (A) by striking “Whoever knowingly sells” and inserting “It is unlawful for a person to sell or issue”, (B) by Striking “substantially”, (C) by striking “, shall be fined” and inserting “. Whoever violates the previous sentence shall be fined”, (D) in subparagraph (A), by inserting “or title XIX” after “other than this title”, (E) in subparagraph (A), by striking “$5,000” and inserting “$25,000 (or $15,000 in the case of a person other than the issuer of the policy)”, and (F) by adding at the end the following: “A seller (who is not the issuer of a health insurance policy) shall not be considered to violate the previous sentence if the policy is sold in compliance with subparagraph (B) and the statement under such subparagraph indicates on its face that the sale of the policy will not duplicate health benefits to which the individual is otherwise entitled. This subsection shall not apply to such a seller until such date as the Secretary publishes a list of the standardized benefit pack-ages that may be offered consistent with subsection (p).”; (2) by amending subparagraph (B) to read as follows: “(B) (i) It is unlawful for a person to issue or sell a medicare supplemental policy to an individual entitled to benefits under part A or enrolled under part B, whether directly, through the mail, or otherwise, unless— “(I) the person obtains from the individual, as part of the application for the issuance or purchase and on a form described in clause (ii), a written statement signed by the individual stating, to the best of the individual’s knowledge, what health insurance policies the individual has, from what source, and whether the individual is entitled to any medical assistance under title XIX, whether as a qualified medicare beneficiary or otherwise, and “(II) the written statement is accompanied by a written acknowledgment, signed by the seller of the policy, of the request for and receipt of such statement. “(ii) The statement required by clause (i) shall be made on a form that— “(I) states in substance that a medicare-eligible individual does not need more than one medicare supplemental policy, “(II) states in substance that individuals 65 years of age or older may be eligible for benefits under the State medicaid program under title XIX and that such individuals who are entitled to benefits under that program usually do not need a medicare supplemental policy and that benefits and premiums under any such policy shall be suspended upon request of the policyholder during the period (of not longer than 24 months) of entitlement to benefits under such title and may be reinstituted upon loss of such entitlement, and “(III) states that counseling services may be available in the State to provide advice concerning the purchase of medicare supplemental policies and enrollment under the medicaid program and may provide the telephone number for such services. “(iii)(I) Except as provided in subclauses (II) and (III), if the statement required by clause (i) is not obtained or indicates that the individual has another medicare supplemental policy or indicates that the individual is entitled to any medical assistance under title 104 STAT. 1388–132 XIX, the sale of such a policy shall be considered to be a violation of subparagraph (A), “(II) Subclause (I) shall not apply in the case of an individual who has another policy, if the individual indicates in writing, as part of the application for purchase, that the policy being purchased re-places such other policy and indicates an intent to terminate the policy being replaced when the new policy becomes effective and the issuer or seller certifies in writing that such policy will not, to the best of the issuer or seller’s knowledge, duplicate coverage (taking into account any such replacement). “(III) Subclause (I) also shall not apply if a State medicaid plan under title XIX pays the premiums for the policy, or pays less than an individual’s (who is described in section 1905(p)(l)) full liability for medicare cost sharing as defined in section 1905(p)(3)(A). “(iv) Whoever issues or sells a medicare supplemental policy in violation of this subparagraph 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 seller who is not the issuer of a policy) for each such violation.”. (b) Suspension of Policy During Medicaid Entitlement.—Section 1882(a), as added by section 4352, is amended by adding at the end the following new paragraph: “(5) (A) Each medicare supplemental policy shall provide that benefits and premiums under the policy shall be suspended at the request of the policyholder for the period (not to exceed 24 months) in which the policyholder has applied for and is determined to be entitled to medical assistance under title XIX of the Social Security Act, but only if the policy holder notifies the issuer of such policy within 90 days after the date the individual becomes entitled to such assistance. If such suspension occurs and if the policyholder or certificate holder loses entitlement to such medical assistance, such policy shall be automatically reinstituted (effective as of the date of termination of such entitlement) under terms described in subsection (n)(6)(A)(ii) as of the termination of such entitlement if the policyholder provides notice of loss of such entitlement within 90 days after the date of such loss. “(B) Nothing in this section shall be construed as affecting the authority of a State, under title XIX of the Social Security Act, to purchase a medicare supplemental policy for an individual otherwise entitled to assistance under such title. “(C) Any person who issues a medicare supplemental policy and fails to comply with the requirements of this paragraph is subject to a civil money penalty of not to exceed $25,000 for each such violation. The provisions of section 1128A (other than the first sentence of subsection (a) and other than subsection (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).“. (c) Effective Date.—The amendments made by this section shall apply to policies issued or sold more than 1 year after the date of the enactment of this Act.