A policy or certificate shall not be advertised, solicited, or issued for delivery as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms that conform to the requirements of this section.
(a) (1) “Accident,” “accidental injury,” or “accidental means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or other similar words of description or characterization.
(2) The definition shall not be more restrictive than the following: “injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”
(3) The definition may provide that injuries shall not include injuries for which benefits are provided or available under any workers’ compensation, employer’s liability, or similar law, unless prohibited by law.
(b) “Benefit period” or “Medicare benefit period” shall not be defined more restrictively than as defined in the Medicare Program.
(c) “Convalescent nursing home,” “extended care facility,” or “skilled nursing facility” shall not be defined more restrictively than as defined in the Medicare Program.
(d) (1) “Health care expenses” means expenses of health maintenance organizations associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers.
(2) “Health care expenses” shall not include any of the following:
(A) Home office and overhead costs.
(B) Advertising costs.
(C) Commissions and other acquisition costs.
(D) Taxes.
(E) Capital costs.
(F) Administrative costs.
(G) Claims processing costs.
(e) “Hospital” may be defined in relation to its status, facilities, and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare Program.
(f) “Medicare” shall be defined in the policy and certificate. “Medicare” may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended,” or “Title I, Part I of Public Law 89-97, as enacted by the 89th Congress and popularly known as the Health Insurance for the Aged Act, as amended,” or words of similar import.
(g) “Medicare eligible expenses” shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare.
(h) “Physician” shall not be defined more restrictively than as defined in the Medicare Program.
(i) (1) “Sickness” shall not be defined more restrictively than as follows: “sickness means illness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.”
(2) The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability, or similar law.
(Amended by Stats. 2005, Ch. 206, Sec. 18. Effective January 1, 2006.)
Last modified: October 25, 2018