Gov. Jay Nixon today reminded Missouri seniors and other consumers that a new law protects them when cancelling certain types of health-related insurance policies. Senate Bill 583, signed by Gov. Nixon on July 13, requires that consumers get prorated refunds when canceling long-term care and Medigap insurance policies.
The new law says consumers who pay in advance for these policies then cancel in the middle of their contract term will get some of their premiums refunded. For example, if a consumer pays a year's worth of long-term care premiums, then cancels after six months, that consumer will get a refund of six months' worth of premiums.
"A refund for what you don't use sounds like a basic concept, but until now, this was not required under the law," Gov. Nixon said. "This change gives seniors the flexibility to switch insurance policies as their needs change - and not lose the payments they've made for future coverage."
Long-term care coverage, sold by private insurance companies, covers nursing home, home health and other expenses for consumers who are unable to perform basic daily tasks. Medigap insurance, also sold by private companies, covers deductibles and other out-of-pocket costs required by Medicare. Medigap is also called Medicare Supplement insurance.
The new law affects Medigap and long-term care insurance policies that are sold or renewed after Jan. 1, 2011.
Gov. Nixon made the announcement from the Department of Insurance, Financial Institutions and Professional Registration (DIFP) office in Jefferson City. He was joined by DIFP Director John M. Huff and representatives of the AARP, the Silver Haired Legislature and the Missouri Association of Area Agencies on Aging.