HOUSE BILL REPORT

HB 1907

BYRepresentatives Lux, Chandler, Braddock, Patrick and Rayburn; by request of Insurance Commissioner

Prohibiting health care insurance premiums increases based on ages over sixty-five.

House Committe on Financial Institutions & Insurance

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (14)

      Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Anderson, Betrozoff, Chandler, Crane, Day, Dellwo, Dorn, Ferguson, P. King, Nutley, Silver and Winsley.

House Staff:John Conniff (786-7119)

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

FEBRUARY 3, 1988

BACKGROUND:

Most health insurers, contractors, and health maintenance organizations increase the rate charged for health care benefits as the covered person ages.  Rates are increased to reflect the probability that as the covered person ages, health care needs increase resulting in higher utilization of health insurance benefits.

SUMMARY:

SUBSTITUTE BILL:  The Insurance Commissioner is directed to conduct a study of health insurer practices of basing insurance rates on the age of the policy holder and to review alternative rating methods.  The Commissioner must consult with the House and Senate Financial Institutions and Insurance Committees, health insurers, and affected consumers and must report his findings to the Legislature by December 31, l988.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Rather than prohibit health insurers from using age as a rating factor for policies issued to persons age 65 or older, the Commissioner is directed to study the impact of such a prohibition.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Dick Marquardt, Insurance Commissioner; E. G. Kroener, Washington State Senior Citizen Council and Storm Johnson, Insurance Commissioner's Office.

House Committee - Testified Against:      Basil Badley, Health Insurance Association of America; Joan Gaumer, Blue Cross and Mel Sorensen, Washington Physicians Service.

House Committee - Testimony For:    The practice of charging older persons more for health insurance as they age causes some senior citizens to drop their insurance because it is unaffordable.  Insurers should use a rating method that more evenly distributes costs among all persons over the age of 65 so that health insurance is more affordable.

House Committee - Testimony Against:      Health insurers began to use age as a rating factor to remain competitive with other insurers who offered discounts to younger senior citizens.  If all seniors must pay the same rate, younger seniors will be required to subsidize the poor health of older seniors.