H-4590

AN ACT Relating to cancellation and nonrenewal of individual health insurance policies; adding a new section to chapter 48.20 RCW; adding a new section to chapter 48.44 RCW; adding a new section to chapter 48.46 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.20 RCW to read as follows:

(1) No disability insurer may decline to renew an individual disability insurance policy except for nonpayment of premium or cost-sharing amounts owed to the insurer, misrepresentation, fraud, or for cause as authorized by the commissioner. The insurer may modify an individual policy form issued to the insured if such modifications are made on a class basis. The insurer may terminate an individual policy form if the insurer offers all policyholders having such coverage its most equivalent alternative coverage without health screening or, upon obtaining the written approval of the commissioner, it obtains for the persons covered under the policy, coverage with another health maintenance organization, health care service contractor, or insurer which coverage provides equivalent benefits for value paid.

(2) The commissioner shall adopt rules prohibiting insurers from engaging in a pattern or practice of subjecting high risk persons to substantial rate increases by discontinuing issuance of individual policy forms and requiring the high risk insured with such coverage to undergo health screening to qualify for coverage under new, lower cost individual policy forms. The insurer may limit issuance of coverage without health screening under the new policy form to a period of not less than thirty days from the date such coverage is offered to the insured.

NEW SECTION. Sec. 2. A new section is added to chapter 48.44 RCW to read as follows:

(1) No health care service contractor may decline to renew an individual health care service contract except for nonpayment of premium or cost-sharing amounts owed to the contractor, misrepresentation, fraud, or for cause as authorized by the commissioner. The health care service contractor may modify an individual contract issued to the insured or subscriber if such modifications are made on a class basis. The health care service contractor may terminate an individual health care service contract form if the contractor offers all insureds or subscribers having such coverage its most equivalent alternative coverage without health screening or, upon obtaining the written approval of the commissioner, it obtains for the persons covered under the contract, coverage with another health care service contractor, health maintenance organization, or insurer which coverage provides equivalent benefits for value paid.

(2) The commissioner shall adopt rules prohibiting health care service contractors from engaging in a pattern or practice of subjecting high risk persons to substantial rate increases by discontinuing issuance of individual health care service contract forms and requiring the high risk insured or subscriber with such coverage to undergo health screening to qualify for coverage under new, lower cost individual health care service contract forms. The health care service contractor may limit issuance of coverage without health screening under the new contract form to a period of not less than thirty days from the date such coverage is offered to the covered person.

NEW SECTION. Sec. 3. A new section is added to chapter 48.46 RCW to read as follows:

(1) No health maintenance organization may decline to renew an individual health maintenance agreement except for nonpayment of premium or cost-sharing amounts owed to the health maintenance organization, misrepresentation, fraud, or for cause as authorized by the commissioner. The health maintenance organization may modify an individual agreement issued to the enrolled participant or subscriber if such modifications are made on a class basis. The health maintenance organization may terminate an individual health maintenance agreement form if the organization offers all enrolled participants having such coverage its most equivalent alternative coverage without health screening or, upon obtaining the written approval of the commissioner, it obtains for the persons covered under the agreement, coverage with another health maintenance organization, health care service contractor, or insurer which coverage provides equivalent benefits for value paid.

(2) The commissioner shall adopt rules prohibiting health maintenance organizations from engaging in a pattern or practice of subjecting high risk persons to substantial rate increases by discontinuing issuance of individual health maintenance agreement forms and requiring the high risk enrolled participants with such coverage to undergo health screening to qualify for coverage under new, lower cost individual health maintenance agreement forms. The health maintenance organization may limit enrollment without health screening under the new contract form to a period of not less than thirty days from the date such form is offered to the subscriber.

NEW SECTION. Sec. 4. The provisions of this act apply to all individual policies, contracts, and agreements issued, amended, or renewed after December 31, 1992.