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NEW MEDIGAP INSURANCE REGULATION IS IN EFFECT

 NEW MEDIGAP INSURANCE REGULATION IS IN EFFECT
 HARRISBURG, Pa., Aug. 3 /PRNewswire/ -- Acting State Insurance


Commissioner Cynthia M. Maleski said today that shopping for Medicare supplement -- or "medigap" -- insurance will be simpler in Pennsylvania because of a new standardization regulation.
 "Medigap standardization is a true service to consumers," Maleski said. "Consumers will be protected from unscrupulous agents who sell them more than one medigap policy -- sometimes multiple policies -- when one is all they need.
 "The changes allow consumers to directly compare prices between companies and include several other strengthened consumer protection requirements."
 The new state regulation initially limits companies to the sale of seven standardized medigap benefit plans.
 The state regulation was adopted on July 25, bringing Pennsylvania into compliance with a recent federal law requiring standardization of medigap benefits.
 Under the law, each state may allow insurance companies to offer up to 10 standardized medigap policies. The plans, which are alphabetically designated from A through J, will contain the same benefits regardless of the company selling it. In Pennsylvania, plans A, B, C, D, E, H and J will be available initially.
 Approximately 1.2 million Pennsylvanians have medigap policies.
 Since the regulation was adopted, the Insurance Department has approved new medigap policies for 13 companies that write approximately 90 percent of medigap policies in Pennsylvania.
 Rates for the plans approved by the department range from approximately $35 to $125 a month.
 Every company selling medigap insurance in Pennsylvania must offer Plan A and Plan B. Plan A is the basic policy of core benefits. Plan B adds coverage for the Medicare Part A (hospitalization) deductible of $652 per benefit period.
 Other approved plans include benefits such as partial payment for prescription drugs, payment of the $100 Part B deductible, payment for a portion of the cost of care in a skilled nursing facility, and payment for preventive medical care.
 In addition to the standardized benefits, the new regulation includes consumer protection measures such as:
 -- A prohibition against the sale of an additional medigap policy to a customer who already has one.
 -- An increase in the required loss ratio (the percentage of premium paid out in claims) for individual policies from 60 percent to 65 percent.
 -- A requirement that insurers must extend the "open enrollment" period to any applicant -- regardless of health -- who applies in the first six months after enrolling in Medicare Part B. The open enrollment assures that any consumer can purchase medigap coverage.
 -- Stronger guarantees that medigap policies, including those issued on a group basis, will be renewed.
 Some companies may switch their current medigap policyholders to the new standardized plans. Others may offer consumers the option of changing to the new plans. Current medigap subscribers should receive information from their companies about possible changes. However, any new policies sold by a company after today must be one of the standardized plans.
 For more information on the medigap changes, consumers should contact their insurance agent or company. Questions also may be directed to the Insurance Department Consumer Services offices in Harrisburg, 717-787-2317; Philadelphia, 215-560-2630; Pittsburgh, 412-565-5020; or Erie, 814-871-4466.
 The Insurance Department also has a medigap fact sheet which can be obtained by sending a business-sized, self-addressed, stamped envelope to: Insurance Department Press Office, 1326 Strawberry Square, Harrisburg, Pa., 17120.
 /delval/
 -0- 8/3/92
 /CONTACT: Amy Dugan or Leslie Osborn of the Insurance Department, 717-787-3289/ CO: Pennsylvania Insurance Department ST: Pennsylvania IN: INS SU:


MK -- PH027 -- 6277 08/03/92 15:51 EDT
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Date:Aug 3, 1992
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