The Office of General Counsel issued the following informal opinion on December 28, 2001, representing the position of the New York State Insurance Department.

Re: Primary medical coverage to replace medicare

Question Presented:

Whether New York Insurance Law requires an insurance company to sell replacement medical insurance that will serve as the individual’s primary medical insurance to individuals currently on Medicare?


N.Y. Ins. L. §§ 3232 and 4318 (McKinney 2000) define pre-existing conditions for which an insurer may reject an applicant for health insurance. If an applicant lacks a statutorily defined pre-existing condition, a health insurance company must accept such person, regardless of the person’s health condition.


The inquirer advised me that her daughter, who is in her thirties, is currently on Medicare. The inquirer explained that the daughter had private health insurance until she was 32 when she had a liver transplant which caused her to reach her maximum lifetime limit of her private health insurance.

Subsequently, the inquirer’s daughter needed kidney dialysis. The inquirer was told by the hospital to apply for Medicare to cover the cost of this procedure. In October, 2000 Medicare began to cover the inquirer’s daughter. In July 2001, the inquirer’s daughter had a kidney transplant. In October 2001, the inquirer contacted this Office asking if Medicare was the inquirer’s daughter’s only option, or if New York Insurance Law required insurance companies to cover such individuals on a supplemental basis or in full, even if the premium was very high. The inquirer later clarified that the inquirer was not seeking Medicare supplement information, but rather wanted information about finding an alternate to Medicare for primary health insurance.


Pursuant to N.Y. Ins. Law § 3231 (McKinney 2000) and N.Y. Ins. Law § 4317 (McKinney 2000), health insurance companies are required to provide "community rated" policies providing hospital and/or medical benefits. This means that " . . . the rates set by the insurer must be the same for all people covered by a particular policy form, and must be based only upon its total pool of experience for that policy form. The rates may not be based upon age, sex, health status, or occupation . . ." NEW YORK INSURANCE LAW, vol. 4, chapt. 12.03, 12-19 to 12-22 (Wolcott B. Dunham, Jr. ed. 2001).

The other relevant statutes include N.Y. Ins. Law §§ 3232 and 4318 (McKinney 2000) which define the term pre-existing condition; and N.Y. Ins. Law §§ 4321 and 4322 (McKinney 2000) which establish standardized contracts to be issued by health maintenance organizations for individual memberships.

Pursuant to N.Y. Ins. Law § 4318 (McKinney 2000), "[e]very individual insurance contract and every group or blanket accident and health insurance contract issued or issued for delivery in this state which includes a pre-existing condition provision shall contain in substance…" the provisions of N.Y. Ins. Law § 4318 (McKinney 2000). Section 4318 controls health insurance contracts issued by non-profit health plans and all health maintenance organizations. The substance of the following provisions is substantially mirrored in N.Y. Ins. Law § 3232 (McKinney 2000) which controls contracts issued by commercial health insurance providers.

Section 4318(a) states, in the relevant part, that:

In determining whether a pre-existing condition provision applies a to covered person, the contract shall credit the time the covered person was previously covered under creditable coverage, if the previous creditable coverage was continuous to a date not more than sixty-three days prior to the enrollment date of the new coverage . . . .

Section 4318(b) states, in the relevant part, that:

No pre-existing condition provision shall exclude coverage for a period in excess of twelve months following the enrollment date for the covered person . . . "enrollment date" means the first day of coverage of the individual under the contract or, if earlier, the first day of the waiting period that must pass with respect to an individual before the individual is eligible to be covered for benefits. . . .

Section 4318(c) states in the relevant part that:

For purposes of this section, "creditable coverage" means, with respect to an individual, coverage of the individual under any of the following:

(3) Part A or B of title XVIII of the Social Security Act.

According to the provided facts, the inquirer’s daughter has been on Medicare continuously since October 2000, thus, she now has in excess of 13 months of "creditable coverage," since Medicare is the commonly used name for title XVIII of the Social Security Act. Assuming that she does not allow an excess of 63 days to pass from the date she leaves Medicare, until the date she enrolls in the private insurance, the inquirer’s daughter will not be considered to have a pre-existing condition.

This means that the inquirer’s daughter is eligible to enroll in either a health maintenance organization for individual memberships established pursuant to N.Y. Ins. Law § 4321 (McKinney 2000), or in a health maintenance organization which provides out-of-plan benefits established pursuant to N.Y. Ins. Law § 4322 (McKinney 2000). The inquirer’s daughter is also eligible to buy a hospital and/or medical benefits policy from a commercial provider pursuant to N.Y. Ins. Law § 3231 (McKinney 2000).

For information about Medicare, you need to contact the Legal Department at the United States Department of Health and Human Services.

For further information you may contact Senior Attorney Susan A. Dess at the New York City Office.