§ 88.165. Major medical expense coverage.
A policy of ‘‘Major Medical Expense Coverage’’ provides hospital, medical, and surgical coverage as follows:
(1) The aggregate maximum is not less than $10,000 per covered person.
(2) The copayment by a covered person is not more than 25% of covered charges except that the copayment percentage applicable to paragraph (7) of § 88.166 of this title (relating to coverage of each covered person) may not be more than 50%.
(3) The deductible shall be stated on a per person, per family, per illness, per benefit period, or per year basis, or a combination of such bases. The deductible shall be not more than 5% of the maximum limit under the coverage unless the policy is written to complement underlying hospital and medical insurance in which case such deductible may be increased by the amount of the benefits provided by such underlying insurance. If the deductible includes benefits provided by underlying hospital and medical insurance, it shall be known as a variable deductible and shall be subject to the following requirements:
(i) The sales material and policy forms for this type of coverage shall clearly and fully describe the variable deductible provision.
(ii) Sales material describing the variable deductible shall be left with the applicant at the time the application is executed.
(iii) The policy shall contain a provision which will permit the insured to increase or decrease his basic deductible to reflect his changing needs and changes in his other medical coverage. Such change will be permitted on any policy whenever subject to an appropriate adjustment of premiums. No evidence of insurability shall be required in connection with a decrease in the basic deductible.
(iv) The minimum basic dollar deductible shall be $750.
(v) Policies shall provide for claim payments on a pro rata basis in the event that other policies of the insured contain similar deductible provisions.
(vi) The insurance company shall remind the insured of his right to adjust the deductible with each renewal notice. This may be accomplished by a question or questions on the renewal notice. These questions would concern themselves with any changes in the basic benefits of the policyholder.
(vii) An explanation of the variable deductible provision shall be included in the outline of coverage and shall be worded substantially similar to the following:
Your Major Medical Expense Policy is designed to coordinate its coverage with benefits provided under other medical expense coverage. This is done by a deductible amount’ which is the flat amount of the Basic Deductible shown on page
of your policy or the amount of benefits paid under other medical expense coverage if that is greater. If this feature of your policy is not understood contact your agent or the company immediately.In the application attached to your policy, you were asked to furnish details of any other medical expense coverage applicable to Covered Persons under your policy so that your choice of the flat amount Basic Deductible could be an appropriate one under the circumstances. If the extent of such other coverage changes in the future, it may be that you should consider a change in the Basic Deductible amount in accordance with the provision of your policy entitled Privilege of Changing Basic Deductible.’ In such event, we suggest that you get in touch with your agent or company, who will be glad to assist you.
(4) The maximum benefit period for an ‘‘each cause’’ type of policy, where a separate deductible is required for each sickness and accident, is not less than 18 months. The maximum benefit period for an ‘‘all cause’’ type of policy, where separate deductibles are not required for each sickness or accident, is not less than the number of days remaining in the calendar or policy year after the deductible has been met.
(5) The period allowed to satisfy the deductible shall be at least 90 days.
Cross References This section cited in 31 Pa. Code § 88.169 (relating to specified disease and specified accident coverage); 31 Pa. Code § 88.171 (relating to supplemental insurance coverage); and 31 Pa. Code § 88.190 (relating to major medical expense coverage form).
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