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PA Bulletin, Doc. No. 23-551

NOTICES

INSURANCE DEPARTMENT

Notice to Insurance Companies Regarding Medicare Supplement Guaranteed Issue Eligibility Following the COVID-19 Public Health Emergency; Notice 2023-04

[53 Pa.B. 2274]
[Saturday, April 22, 2023]

 The novel coronavirus (COVID-19) Public Health Emergency (PHE) is unwinding, and Pennsylvania's Medical Assistance program (Medicaid) is beginning a redetermination process this month. The process to redetermine Medicaid eligibility for those residents in this Commonwealth is expected to be conducted throughout 2023 and well into 2024. For many individuals, this will mean enrollment in coverage through Pennie® or employer-sponsored coverage. Pennie®, along with the Department of Human Services (DHS), is coordinating that work. The Insurance Department (Department) urges insurers to work with DHS to get individuals enrolled in commercial coverage expeditiously.

 The Department is particularly focused on individuals who ordinarily could have enrolled in Medicare Supplement (Med Supp or Medigap) coverage on a guaranteed issue basis but for the circumstances of the PHE Medicaid continuous coverage requirements. These individuals were enrolled in Medicaid, and therefore may not have enrolled in Medicare Part B. An individual enrolled in Medicaid is not permitted to be sold Medicare Supplement coverage. During the PHE, Medicaid was not permitted to redetermine the eligibility of any individual for Medicaid coverage, resulting in many remaining enrolled in Medicaid when they might otherwise have transitioned to Medicare coverage separate from any Medicaid program, regardless of eligibility changes.

 On November 3, 2022, the United States Department of Health and Human Services (HHS) promulgated amendments to the Federal Medicare regulations, including amendments that effectuated the HHS Secretary's discretion to permit enrollment in Medicare Part B policies with an exemption from a late enrollment penalty. See Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules (87 FR 66454 (November 3, 2022)) (Medicare Final Rule).

 Some of the impacted individuals may have missed or may miss their initial enrollment period for Part B coverage due to their Medicaid enrollment, or may seek to re-enroll in Part B coverage that may have been dropped due to Medicaid enrollment. Still others may have been enrolled in Medicare Part B under a Medicaid buy-in program, but, because they were on Medicaid, under Federal law were not able to be sold a Medicare Supplement policy. Others of these individuals are in a similar circumstance of being unable to be sold a Medicare Supplement policy, but chose to enroll in Part B to avoid a late enrollment penalty, even though they were still covered by Medicaid. For reference, all individuals in Medicare Supplement enrollment situations impacted by the PHE or the Medicaid continuous coverage requirement, whether or not described previously, and including where Part B enrollment is being permitted with an exemption from a late enrollment penalty under the Medicare Final Rule, are referred to as Medicaid redetermination individuals.

 For Medicaid redetermination individuals, the Department expects each insurer issuing Medicare Supplement coverage in the Commonwealth to treat impacted individuals as having a guaranteed issue enrollment period for Medicare Supplement coverage consistent with Federal and State law. Attached to this notice are Frequently Asked Questions that elaborate on expectations for specific situations.

 Questions regarding this notice may be addressed to the Bureau of Life, Accident and Health, Insurance Department, 1311 Strawberry Square, Harrisburg, PA 17120, RA-RATEFORM@pa.gov.

MICHAEL HUMPHREYS, 
Acting Insurance Commissioner

Frequently Asked Questions About Medicare Supplement Guaranteed Issue Eligibility Following the Medicaid Redetermination Process

 Q.1. Were individuals who were provided health care coverage through Medicaid but turned 65 during the COVID-19 Public Health Emergency provided continuous Medicaid coverage?

 A.1. Yes, these individuals continued to receive health care coverage through Medicaid, even if they otherwise would have been eligible for Medicare coverage as a result of turning 65. During the PHE, the Department of Human Services was not permitted to terminate Medicaid coverage, resulting in many remaining enrolled in Medicaid when they might otherwise have transitioned to Medicare coverage separate from any Medicaid program, regardless of eligibility changes.

 Q.2. What circumstances might these individuals be in as a result of Medicaid unwinding the continuous coverage?

 A.2. These individuals were enrolled in Medicaid, and therefore may not have been enrolled in Medicare Part B, and were not permitted under federal law to be sold Medicare Supplement coverage. Some of the impacted individuals may have missed or may miss their initial enrollment period for Part B coverage due to their Medicaid enrollment, or may seek to re-enroll in Part B coverage that may have been dropped due to Medicaid enrollment. Still others may have been enrolled in Part B pursuant to a Medicaid buy-in program, but, because they were on Medicaid, again under federal law were not able to be sold a Medicare Supplement policy. Others of these individuals are in a similar circumstance of being unable to be sold a Medicare Supplement policy, but chose to enroll in Part B to avoid a late enrollment penalty, even though they were still covered by Medicaid. For reference, in this FAQ, all individuals in Medicare Supplement enrollment situations impacted by the PHE or the Medicaid continuous coverage requirement, whether or not described above, and including where Part B enrollment is being permitted with an exemption from a late enrollment penalty under the Medicare Final Rule, are referred to as ''Medicaid redetermination individuals.''

 Q. 3. Has the federal government granted an exception to allow Medicaid redetermination individuals to enroll in Part B without a late enrollment penalty after they are found no longer eligible for Medicaid?

 A.3. Yes. On November 3, 2022, the Department of Health and Human Services (HHS) promulgated amendments to the federal Medicare regulations, including amendments that effectuated the HHS Secretary's discretion to permit enrollment in Medicare Part B policies with an exemption from a late enrollment penalty. See Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules, 87 Fed. Reg. 66454 et seq. (Nov. 3, 2022) (Medicare Final Rule).

 Q.4. Should a Medicare Supplement guaranteed issue enrollment period be available to an individual who turned 65 and did not enroll in Medicare Part A or Part B or both while they were on Medicaid during the PHE?

 A.4. Yes. The expectation is that a Medicaid redetermination individual should not be penalized as a result of the Medicaid continuous coverage provisions during the PHE. The federal government has waived the late enrollment penalty for individuals who enroll in Part B coverage after January 1, 2023. See Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules, 87 Fed. Reg. 66454 et seq. (Nov. 3, 2022) (Medicare Final Rule). For an individual that enrolls in Part B as contemplated in the Medicare Final Rule, the expectation is that the individual will be treated as if they are in their open enrollment period, and be eligible for a Medicare Supplement policy on a guaranteed issue basis. See 31 Pa. Code §§ 89.778, 89.790.

 Q.5. If an individual is late signing up for Part B due to Medicaid continuous enrollment and only enrolls in Part B after a subsequent redetermination, should they be eligible for a guaranteed issue Medicare Supplement policy?

 A.5. Yes. The expectation is that a Medicaid redetermination individual should not be penalized as a result of the Medicaid continuous coverage provisions during the PHE. The federal government has waived the late enrollment penalty for individuals who enroll in Part B coverage after January 1, 2023. See Medicare Final Rule. For an individual that enrolls in Part B as contemplated in the Medicare Final Rule, the expectation is that the individual will be treated as if they are in their open enrollment period, and be eligible for a Medicare Supplement policy on a guaranteed issue basis. See 31 Pa. Code §§ 89.778, 89.790.

 Q.6. Should a Medicare Supplement guaranteed issue enrollment period be available to an individual who turned 65 and was enrolled in Medicare Part B while they were on Medicaid during the PHE and prior to Medicaid eligibility redetermination, even if the Part B enrollment was paid for by the Medicaid program?

 A.6. Yes. The expectation is that a Medicaid redetermination individual should not be penalized as a result of the Medicaid continuous coverage provisions during the PHE. For an individual who was enrolled in Medicare Part B but remained on Medicaid during the PHE, it is the expectation that the individual will be treated as if they are in their open enrollment period, and be eligible for a Medicare Supplement policy on a guaranteed issue basis. See 31 Pa. Code §§ 89.778, 89.790.

 Q.7. What does guaranteed issue mean?

 A.7. Guaranteed issue means that a Medicare Supplement issuer may not, with respect to a Medicaid reenrollment individual:

 (i) Deny or condition the issuance or effectiveness of a Medicare Supplement policy that is offered and is available for issuance to new enrollees by the issuer;

 (ii) Discriminate in the pricing of the Medicare Supplement policy because of health status, claims experience, receipt of health care, or medical condition; or

 (iii) Impose an exclusion of benefits based on a preexisting condition under the Medicare Supplement policy.

 31 Pa. Code § 89.790(a).

 Q.8. How long should the guaranteed issue enrollment opportunity be available for a Medicaid redetermination individual?

 A.8. The guaranteed issue enrollment opportunity should be consistent with the timeframes contemplated in the Pennsylvania Medicare Supplement regulations, as if the individual were newly eligible for Medicare Supplement enrollment at the time of the individual's Medicaid redetermination.

 The expectation is that a guaranteed issue Medicare Supplement policy will be available to a Medicaid redetermination individual who applies for the Medicare Supplement policy during the 63 days following the later of their notice of termination or disenrollment from Medicaid or their date of termination from Medicaid, or that the guarantee issue period will occur during the six-month period following the first day of the first month in which the individual is enrolled in Part B, and that the individual will submit evidence of the date of termination or disenrollment from Medicaid with the application for a Medicare Supplement policy.

[Pa.B. Doc. No. 23-551. Filed for public inspection April 21, 2023, 9:00 a.m.]


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