SF4148

Purpose

This bill makes several changes to Minnesota law about Medicare-related health coverage sold in the state. It strengthens protections around guaranteed issue (when insurers must sell you a policy without denying or loading it with higher rates) for Medicare supplement policies, adds new rules about reinstatement after termination, and creates a standardized community rate system for Medicare-related coverage. It also adds specific rules about preexisting conditions, suspensions for people who qualify for medical assistance, and open enrollment protections for certain younger enrollees.

Main Provisions

• Preexisting conditions and coverage timing

  • Medicare supplement policies must cover preexisting conditions during the first six months of coverage if the insured was not diagnosed or treated for the condition in the 90 days before the coverage started.
  • This applies if the insured meets certain premium-increase requirements (see “Pricing and Rates” below).

• Suspension and reinstatement for medical assistance

  • If a policyholder applies for and is entitled to medical assistance (Medicaid) under title XIX, benefits and premiums may be suspended for up to 24 months.
  • The policyholder must notify the insurer within 90 days after entitlement begins.
  • If entitlement ends, the policy is automatically reinstated as of the termination date if the policyholder notifies the insurer within 90 days of losing entitlement and pays the portion of the premium for the suspended period.
  • Upon reinstatement, there is no waiting period if the premium-increase requirements are met.
  • Reinstated coverage should be substantially equivalent to the prior coverage; if the suspended policy covered outpatient prescription drugs, reinstitution for Medicare Part D enrollees must be without outpatient prescription drug coverage but otherwise substantially equivalent; premiums must be at least as favorable as before.

• Denials, pricing, and six-month protections

  • Health carriers may not impose preexisting-condition limitations or deny/condition issuance or pricing of Medicare-related coverage because of health status, claims history, or age within the six-month period starting with:
  • the first day of the month a person first enrolls in Medicare Part B, or
  • open enrollment for people aged 65 to 70 applying for coverage for the first time.
  • Premium increases allowed under the existing premium-increase rules (subdivision 1r) may still apply in specified circumstances.
  • These protections apply to all Medicare-related coverage offered by a carrier, regardless of the enrollee’s age.

• Termination, disability, and automatic reinstatement (cognitive impairment)

  • If a policy terminates due to fraud, misrepresentation, or nonpayment, there is a process for reinstatement when the cause was cognitive impairment or functional incapacity.
  • The carrier may require medical evidence to confirm cognitive impairment or functional incapacity, paid by the policyholder.
  • A reinstated policy must cover losses from the date of termination and be issued without requiring new evidence of insurability.
  • The policyholder must pay any unpaid premiums within 15 days of a reinstatement request; if not paid, reinstatement can be declined.
  • The insurer must notify the policyholder of rights to a hearing if reinstatement is denied.

• Community rate system for Medicare-related coverage

  • Each health plan (HMO/insurer/other) must price Medicare-related coverage at a separate “community rate.”
  • Coverage cannot be offered or renewed unless it uses this community rate.
  • The community rate can adjust for actuarially valid differences in benefit design or provider networks, geographic rate variations (with approval), and premium reductions for healthy behaviors (e.g., not using tobacco). These reductions must be actuarially valid and filed with the Commissioner of Commerce for approval.
  • A limited one-time premium increase may be charged for enrollees who enroll outside of the initial Medicare enrollment period.
  • The bill sets specific annual premium increase scales for open enrollments from 2026 through 2030 (e.g., 15% in 2026, 20% in 2027, up to 35% by 2030 and beyond), with special rules for younger enrollees (65–70) and for those enrolling in a non-replacement/renewal situation.
  • If a person ages 65–70 enrolls in a Medicare supplement policy outside of the initial enrollment period, they are subject to these premium increase rules only to the extent specified.

• Guaranteed issue for eligible persons

  • Defines who is an “eligible person” for guaranteed issue rights (e.g., people who lose coverage under certain plans, those who enroll in Medicare Part B due to disability and later reach age 65, or other specified enrollment scenarios).
  • Eligible persons must be offered and priced without discrimination based on health status, medical conditions, claims history, or age, and without preexisting-condition exclusions, during the guaranteed issue period.
  • The guaranteed issue period begins at specific trigger dates (e.g., after notice of termination or enrollment changes) and ends after a defined number of days from those dates, depending on the situation.

• Guaranteed issue for other policies

  • Health carriers offering Medicare supplement policies must allow eligible policyholders to buy during open enrollment any Medicare supplement policy they offer that has the same or fewer benefits.
  • Carriers are not required to allow purchases if the policyholder is not paying premiums or has made material misrepresentations.

How this Changes Existing Law

• Expands guaranteed issue protections to a wider set of Medicare-related policies and enrollment scenarios.
• Creates a formal “community rate” framework for Medicare-related coverage, limiting how carriers price these plans and requiring actuarial justification for rate differences and certain premium reductions.
• Adds explicit protections for reinstatement after termination due to cognitive impairment or functional incapacity, including automatic reinstatement rules and required medical evidence.
• Introduces new rules around suspensions for individuals eligible for medical assistance, including streamlined reinstatement and substantial equivalence requirements.
• Establishes more explicit preexisting-condition coverage rules for Medicare-related policies during the initial coverage period.

Implementation and Scope

• Applies to Minnesota-licensed issuers of Medicare-related coverage, including health maintenance organizations, insurers, and other carriers selling Medicare-related plans in Minnesota.
• Involves the Minnesota Commissioner of Commerce for filings and approvals related to community-rate adjustments and premium reduction methods.
• Impacts open enrollment periods and special enrollment scenarios, including disability-related enrollment and Medicare Part B/Part D transitions.

Potential Impacts

• For consumers: stronger protections against denial or punitive pricing based on health status for Medicare-related coverage during open enrollment windows; clearer paths to reinstatement after cognitive impairment or Medicaid-related suspensions; access to guaranteed issue for eligible situations.
• For insurers: new rate-setting requirements (community rate) and more structured processes for reinstatement and notices; must manage premium timing and eligibility triggers for guaranteed issue.
• For the market: a more standardized pricing framework and broader rights to switch or reinstate Medicare-related coverage, with specific timelines and documentation requirements.

Relevant Terms - Medicare supplement policy - Guaranteed issue - Preexisting condition - Preexisting condition coverage - Six-month limitations (open enrollment window) - First day of Medicare Part B enrollment - Open enrollment period - Suspension of benefits and premiums - Medical assistance / Medicaid (title XIX) - Automatic reinstatement - Cognitive impairment - Functional incapacity - Premium increase / premium adjustments - Community rate - Actuarially valid differences - Geographic variation - Healthy lifestyle premium reductions - Medicare Part B, Part C (Medicare Advantage), Part D (drug coverage) - Medicare Part D enrollment - Open enrollment outside initial period - Eligibility for guaranteed issue - Hearing rights / commissioner oversight - Notice requirements and timing - PACE and Medicare-related provider considerations (where referenced)