17B:26A-12 Findings, declarations relative to Medicare supplement insurance.

1. The Legislature finds and declares that:

a. As of April 1, 1995, individuals in the State of New Jersey under age 65 who became eligible for Medicare benefits due to a disability or because they suffer from the end stage of renal disease do not have access to Medicare supplement insurance, otherwise known as "Medigap" insurance.

b. Prior to that date only one health insurance carrier in New Jersey offered Medicare supplement insurance contracts to the under 65 population. Unsustainable losses, caused in part by the fact that this carrier was the only carrier providing such coverage, led to the carrier's withdrawal from the Medicare supplement insurance market for the under 65 population on March 31, 1995.

c. Because Medicare supplement insurance pays for many of the health care expenses not covered by Medicare, the absence of Medicare supplement insurance will eventually leave thousands of blind, AIDS, disabled and dialysis patients in New Jersey without any means of secondary insurance to supplement their Medicare coverage. For many of these people with serious illnesses, the 20 percent co-payments and deductibles charged by Medicare will cause financial hardship and emotional distress. If no action is taken, Medicare recipients under 65 years old will be forced to deplete their personal assets and may eventually be forced to resort to Medicaid to supplement their health care needs.

d. Subsequent to the enactment of P.L.1995, c. 229 (C.17B:26A-12 et seq.), section 401 of the Medicare Access and CHIP Reauthorization Act of 2015, Pub. L. 114-10, amended section 1882 of the Social Security Act (42 U.S.C. s.1395ss), prohibiting the issue of Medicare supplement policies that provide coverage of the Medicare Part B deductible to an individual who, on or after January 1, 2020, is a newly eligible Medicare beneficiary, and further specifying that, with respect to newly eligible Medicare beneficiaries, reference to a Medicare supplement policy which has a benefit package classified as Medicare Supplement Plan C shall be deemed, as of January 1, 2020, to be a reference to a Medicare supplement policy which has a benefit package classified as Medicare Supplement Plan D, unless the Secretary of the United States Department of Health and Human Services provides otherwise.

e. Therefore, the Legislature declares that it is in the public interest:

(1) to ensure that Medicare supplement insurance is available to the individuals under 65 years of age who become eligible for Medicare benefits;

(2) to require all health insurance carriers who currently sell Medicare supplement insurance to the age 65 and over population to also offer, at a minimum, Medicare Supplement Plan C coverage to the under age 65 population who become eligible for Medicare prior to January 1, 2020;

(3) to require all health insurance carriers that currently sell Medicare supplement insurance to the age 65 and over population to also offer, at a minimum, Medicare Supplement Plan D coverage to the under age 65 population who become newly eligible on or after January 1, 2020;

(4) to establish a mechanism that will: allow the premiums on those Medicare supplement insurance policies and contracts to remain affordable; encourage insurance carriers to continue to serve or enter this market; and provide for the equitable sharing of any losses;

(5) to ensure that premiums for the more than 200,000 New Jersey residents who have purchased Medicare supplement insurance remain affordable and do not become subject to excessive rate increases; and

(6) that regulations necessary to effectuate the purposes of this act be promulgated by the Commissioner of Banking and Insurance expeditiously due to the urgency of the situation.

L.1995, c.229, s.1; amended 2019, c.139, s.1.