Advisory opinion on HB 345 implementation for Medicare supplement policies
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This advisory opinion explains the Kentucky Department of Insurance's interpretation of HB 345 requirements for Medicare supplement policies available, issued, or renewed on or after January 1, 2024, and directs insurers writing Medicare supplement business in Kentucky on required filings and calculations.
Requires calculation and use of a weighted average premium for filings related to eligible applicants under age 65.
Expands guaranteed-issue and enrollment protections including an annual 'birthday rule' open enrollment within 60 days of the applicant's birthday for eligible under-65 applicants.
Requires insurers to file compliant rate and form filings by August 1, 2023, to ensure availability by January 1, 2024.
Policyholders turning 65 must be transferred from the under-65 risk pool into the 65-and-older risk pool and receive notice of the premium change and birthday-rule enrollment.
Medicare Supplement Coverage & Filing Requirements
Medicare supplement coverage and filing criteria
Requirements and operational expectations for insurers issuing Medicare supplement policies available, issued, or renewed on or after Jan 1, 2024:
ALL of the following
- Offer guaranteed-issue rights to all eligible applicants during the annual birthday-rule open enrollment period (within sixty (60) days of the applicant's birthday).
- Prohibit health-status-based pricing discrimination for applicants during that open enrollment period.
- Eliminate waiting periods and exclusions for benefits due to preexisting conditions for applicants who meet the new Medicare eligibility requirements; file plans accordingly.
ALL of the following
- Automatically transfer policyholders who reach age sixty-five (65) from the under-65 risk pool into the broader sixty-five-and-older risk pool (lower-cost policy).
- Provide notice of the premium change and the birthday-rule enrollment either as part of, or in addition to, the annual premium increase notice.
- Reflect this automatic transfer and any resulting premium changes in rate and form filings.
Insurer Filings and Required Enrollment Actions
Insurer filings, birthday-rule enrollment, guaranteed issue, and transfer at age 65
Submit compliant outlines of coverage, applications, and policies for eligible applicants under age 65 in form and rate filings by August 1, 2023, to permit Department review and approval before policies are available on January 1, 2024. Offer guaranteed-issue rights and a yearly 'birthday rule' open enrollment (within 60 days of the applicant's birthday) for eligible under-65 applicants, prohibit health-status pricing discrimination during that period, eliminate waiting periods and preexisting-condition exclusions for qualifying applicants, and automatically transfer policyholders who turn 65 into the 65-and-older risk pool with notice of the premium change and birthday-rule enrollment.
- Include compliant outlines of coverage, applications, and policies for eligible applicants under age 65 in all form and rate filings.
- Submit all subject rate and form filings on or before August 1, 2023, to allow a 90-day approval process prior to 1/1/2024.
- Provide guaranteed-issue rights and permit enrollment during the annual birthday-rule open enrollment (within 60 days of the birthday); prohibit pricing discrimination based on health status during this period.
- Do not impose waiting periods or exclusions for preexisting conditions on applicants who meet the new Medicare eligibility requirements.
- Automatically transfer policyholders who reach age 65 from the under-65 risk pool into the 65-and-older risk pool and notify them of the premium change and birthday-rule enrollment (notice may be included with the annual premium increase notice).
Weighted Average Premium Calculation Method
Key Terms and Definitions
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