D. Medicare and Medi-Cal

Dual eligible beneficiaries are those who qualify for both Medicare and Medi-Cal benefits. Based on the level of benefit received from Medi-Cal, dual eligible enrollees may be categorized as:

• Full benefit enrollees who receive full Medi-Cal benefits available in the state; or
• Partial benefit enrollees who receive Medi-Cal assistance to pay Medicare premiums and/or other cost-sharing obligations.

A Medicare Advantage Dual Eligible Special Needs Plan (D-SNP) provides specialized care and wrap-around services for dual eligible beneficiaries (those eligible for both Medicare and Medicaid). It is an integrated Medicare/Medi-Cal option for full benefit enrollees who are ages 65 and older and living in the plan's service area.

1. California Insurance Code Requirements

Standardized Plan Benefits

Each standardized plan must meet the following requirements for plan benefits:

• The plan may not exclude or limit benefits for losses incurred more than 6 months from the effective date of coverage due to a pre-existing condition.
• Losses from sickness must be indemnified on the same basis as losses from accidents.
• Benefits that cover cost-sharing amounts under Medicare will be automatically changed to coincide with any changes in the applicable Medicare deductible amount and copayment percentage factors.
• Coverage for a spouse cannot be terminated solely because of the event that terminates coverage of the insured (except for nonpayment of premium).
• Medicare supplement policies must be guaranteed renewable or noncancelable.

Open Enrollment

There are several regulations concerning the open enrollment period for Medicare supplement plans:

• Disabled individuals enrolled in Medicare must be entitled to open enrollment for 6 months after the date of the enrollment or after the notice of eligibility for Medicare.
• Individuals enrolled in Medicare Part B may also be entitled to open enrollment for 6 months following: receipt of a notice of termination of an employer-sponsored health plan; receipt of a notice of loss of eligibility for an employer-sponsored health plan due to the divorce or death of a spouse; or termination of health care services for a military retiree due to a military base closure or termination of health services coverage.
• An individual whose Medicare Advantage plan coverage was terminated is entitled to an additional 60-day open enrollment period.
• An annual open enrollment period of 30 days or more (beginning with the individual's birthday), during which the individual may purchase any Medicare supplement policy with benefits of equal or lesser value than those provided by the previous coverage.
• Individuals enrolled in Medicare Part B are entitled to an open enrollment period once they have been notified that they are no longer eligible for benefits under the Medi-Cal program due to an increase in their income or assets (CIC 10192.11).

Guaranteed Issue Periods

In general, the guaranteed issue period begins on the effective date of disenrollment and ends 63 days after the effective date of disenrollment. In some circumstances involving voluntary disenrollment, coverage will begin 60 days prior to the effective date of the disenrollment and will continue for 63 days after the effective date of the disenrollment.

Permitted Commissions

An agent or other representative involved in the sale of Medicare supplement policies may receive commissions as long as the 1st-year commission does not exceed 200% of the commissions paid for selling or servicing the policy in the 2nd year. Commissions in subsequent renewal years must be the same as in the second year and must be provided for no fewer than 5 renewal years. The term commission refers to any monetary and non-monetary compensation, including bonuses, gifts, prizes, awards, and finders' fees (CIC 10192.16).

Appropriate Sales and Replacement

In order to comply with the California Insurance Code regulations regarding sales and replacement of Medicare supplement policies (CIC 10192.20), the insurer must meet each of the following requirements:

• Establish marketing procedures for fair and accurate comparison of policies by its agents, and to prevent excessive sales of insurance;
• Prominently display a notice to buyer on the first page of a policy stating that the policy may not cover all of the buyer's medical expenses;
• Make every reasonable attempt to identify whether a prospective applicant already has health insurance; and
• Establish auditable procedures for verifying compliance with the Code regulations.

Insurers may not participate in any of the unfair trade practices, such as twisting, high-pressure tactics, or cold lead advertising (concealing from the customer that the purpose of marketing is the solicitation of insurance).

Any agent selling a Medicare Supplement must make reasonable efforts to determine the appropriateness of a recommended purchase or replacement. The application for Medicare Supplement insurance must include a statement signed by the agent that reads: "I have reviewed the current health insurance coverage of the applicant and found that additional coverage of the type and amount applied for is appropriate for the applicant's needs." Any sale of a Medicare Supplement policy that would give the insured more than one such policy is prohibited.

Prohibitions on Discrimination

The act of treating any person or group of persons unfairly in the sale of or pricing of policies, or the act of treating any class of risk differently from other classes of risk, is expressly prohibited by California law (CIC 10194.8).