Purpose

• Expand access to guaranteed issuance of Medicare supplement policies for people who rely on Medicare supplement coverage and face involuntary termination, insolvency of the issuer, or other disruptions described in the bill.
• Update Minnesota law (Minnesota Statutes 2025 Supplement section 62A.31 subd. 1u) to ensure eligible individuals can enroll in a new Medicare supplement policy even if their current coverage ends for reasons like issuer insolvency or involuntary termination.

Who is Eligible (eligible persons)

• People who previously had a Medicare supplement policy and experience one of the following:
  • Their employer-based health benefits plan that supplements Medicare terminates or stops providing these benefits.
  • They are enrolled in a Medicare Advantage plan (Part C) or, if 65+, are in a PACE program, and there are circumstances that would normally allow discontinuance of enrollment in the MA plan.
  • They become ineligible to continue enrollment in the above MA or PACE arrangements due to specific changes or plan terminations.
  • Their situation meets other conditions described by the Secretary of Health and Human Services (permissible exceptions for ending enrollment).
• People whose Medicare supplement enrollment ends because:
  • The issuer becomes insolvent or undergoes bankruptcy, or
  • There is another involuntary termination of coverage, or
  • The issuer or its agents materially misrepresented policy terms in marketing, or
  • The issuer or plan substantially violated a material provision of the policy or contract.

Main Provisions and What the Bill Seeks to Accomplish

• Guaranteed issue rights: Eligible individuals must be allowed to enroll in a Medicare supplement policy without denial or price discrimination based on health status, claims, medical conditions, age, or preexisting condition exclusions during a defined guaranteed issue period.
• Policy options for eligible enrollees:
  • The eligible policy is the basic Medicare supplement plan plus optional riders offered by any issuer.
  • If the enrollee previously had an outpatient prescription drug (Rx) benefit, they may be offered a policy that continues, or one that removes Rx coverage, subject to what the same issuer offers to new enrollees.
  • The enrollee may select a policy offered by any issuer, with the same issuer potentially offering a modified policy that removes Rx coverage (if applicable) or a policy as described in the bill.
• Timing of guaranteed issue:
  • The guaranteed issue period starts at specified triggering events (for example, after notice of termination or after the applicable coverage ends) and runs for a defined window (commonly about 63 days after termination or disenrollment, with other timing rules for different scenarios).
  • In some cases, such as involuntary disenrollment, the period begins when notice of termination is received and ends 63 days after coverage ends.
  • For certain events related to enrollment in Medicare Part D or MA/PACE transitions, special timing rules apply, including periods that may start before disenrollment or around the initial Part D enrollment period.
• Open enrollment and deems initial enrollment:
  • If an enrollee experiences involuntary termination within the first 12 months of enrollment and then enrolls in another such plan/provider, the new enrollment may be treated as an initial enrollment under the guaranteed issue framework.
  • Similar treatment applies for other specified first-12-month involuntary terminations.
  • Some rules limit how often this “initial enrollment” deeming can occur (e.g., not after a two-year period from first enrollment).
• Rights and notices:
  • Issuers, organizations, or administrators must notify affected individuals of their guaranteed issue rights and the issuer’s obligations under this subdivision.
  • Notice must be given in conjunction with the termination notice or within a set period after disenrollment (e.g., within ten working days of disenrollment).

Significant Changes to Existing Law

• Expands guaranteed issue protections for Medicare supplement policy enrollees facing involuntary termination, insolvency of the issuer, or other specified disruptions.
• Creates detailed eligibility criteria linking Medicare Advantage, PACE, and other Medicare-related arrangements to eligibility for guaranteed issue.
• Establishes specific timing for when guaranteed issue begins and ends, depending on the triggering event.
• Allows flexibility for enrollees to retain or modify outpatient prescription drug coverage when switching to a new Medicare supplement policy, depending on prior coverage and issuer offerings.
• Adds explicit notification duties for issuers and plan administrators to ensure enrollees understand their guaranteed issue rights.

How Guaranteed Issue Works in Practice

• An eligible person seeks to enroll in a new Medicare supplement policy during the guaranteed issue period after their coverage ends or when they receive notice of termination.
• The new policy must be offered by the same issuer or any issuer, without denying coverage or applying preexisting-condition exclusions due to health status or past medical history.
• The enrollee may choose to keep or drop outpatient Rx coverage as appropriate, subject to what is offered to new enrollees by the issuer.
• The issuer must provide clear notice about guaranteed issue rights at the time of termination or disenrollment.

Notifications and Rights

• When a qualifying event occurs (termination, insolvency, etc.), the organization or issuer must inform the individual of their guaranteed issue rights under this bill.
• Notice must be given promptly, typically contemporaneously with termination or within a short window after disenrollment.

Open Enrollment and Continuity

• Some enrollments after involuntary terminations are treated as initial enrollments for purposes of guaranteed issue, helping ensure continuity of Medicare supplement coverage.

Overall Impact

• Aims to reduce gaps in Medicare supplement coverage by ensuring people whose coverage ends due to insolvency or involuntary termination can obtain new coverage quickly and on fair terms.
• Supports smoother transitions for enrollees moving between MA plans, PACE, or Medicare supplement policies.

Relevant Terms - guaranteed issue - Medicare supplement policy - eligible persons - involuntary termination - insolvency / bankruptcy - issuer - disenrollment - Medicare Advantage (Part C) - PACE - Program of All-Inclusive Care for the Elderly (PACE) - open enrollment - preexisting condition exclusions - outpatient prescription drug coverage (Rx) - Medicare Part D - basic Medicare supplement - Riders (optional coverage) - notices / notification - claims processing / misrepresentation (marketing) - termination / cessation of coverage - enrollment eligibility - open enrollment period - initial enrollment (deemed) - 62A.31 (reference to statute, generally) - 1894 / Medicare Act references (Part C, Part D) - 1876 / 1395mm / 1395ss (Medicare-related sections)