6121-S2

AN ACT Relating to medicare supplemental insurance; amending RCW 41.05.197; adding new sections to chapter 41.05 RCW; creating new sections; and declaring an emergency.

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

Sec. 1. RCW 41.05.197 and 1993 c 492 s 223 are each amended to read as follows:

(1) If a waiver of the medicare statute, Title XVIII of the federal social security act, sufficient to meet the requirements of chapter 492, Laws of 1993 is not granted on or before January 1, 1995, the medicare supplemental insurance policies authorized under RCW 41.05.195 shall be made available to any resident of the state eligible for medicare benefits. Except for those retired state or school district employees eligible to purchase medicare supplemental benefits through the authority and as provided for under subsection (2) of this section, persons purchasing a medicare supplemental insurance policy under this section shall be required to pay the full cost of any such policy.

(2) Subject to the availability of appropriated funds, the funds shall be used to offset the premiums of persons purchasing a medicare supplemental insurance policy under this section for those persons whose family income is less than two hundred percent of the federal poverty level and who are not otherwise eligible as qualified medicare beneficiaries under the medicaid program eligibility rules in effect January 1996. The administrator shall design and implement a structure of premiums due from persons receiving the offset that is based upon gross family income, giving appropriate consideration to family size. The premium structure shall be similar in concept to the basic health plan subsidy structure under chapter 70.47 RCW, but may recognize differences in: (a) The health care provided under the medicare supplemental insurance policies; (b) the population served under this section; and (c) other factors. The offset shall be available to eligible persons purchasing a medicare supplemental insurance policy beginning October 1, 1997.

NEW SECTION. Sec. 2. The legislature finds that rapid changes occurring in the provision of health insurance to our state's senior citizens through the federal medicare program may begin making prescription drugs more difficult to afford, especially for those living on fixed incomes near the poverty level. For this reason, the legislature determines there is need to move quickly and decisively to provide assistance to this vulnerable population so that new programs are in place as federal changes are implemented.

NEW SECTION. Sec. 3. A new section is added to chapter 41.05 RCW to read as follows:

(1) The administrator shall determine the activities required to establish a reasonable and cost-effective prescription drug insurance plan that would be made available to any state resident enrolled in medicare.

(2) Unless there is a specific federal statutory prohibition, or except as provided in section 5 of this act, the administrator shall implement a comprehensive prescription drug insurance plan that, by January 1, 1998, must be made available to any state resident enrolled in medicare.

(3) By December 1, 1996, the administrator shall report to the appropriate committees of the legislature and the health care policy board if, with the written advice of the attorney general, federal statutory prohibitions exist to implementation of this program, or if actual premium rates established following competitive bidding of the prescription drug insurance plan substantially exceed expectations, creating questions regarding public interest in the program. The report shall include estimated premium costs, administrative costs to the state, and specific recommendations for removing any state or federal legislative or regulatory barriers to implementation of the insurance.

(4) The administrator shall use any funds appropriated for this section to implement this section, including to offset premiums of the persons purchasing prescription drug insurance under this section for those persons whose family income is at or below two hundred percent of the federal poverty level and who are not receiving prescription drug benefits as qualified medicare beneficiaries. The administrator shall design and implement a structure of premiums due from persons receiving the offset that is based upon gross family income, giving appropriate consideration to family size. The premium structure must be similar to the basic health plan subsidy structure under chapter 70.47 RCW, but may reflect differences in: (a) The limited benefits provided under this act; (b) the population served; and (c) other factors. The offset must be available to eligible persons beginning January 1, 1998.

NEW SECTION. Sec. 4. A new section is added to chapter 41.05 RCW to read as follows:

The insurance commissioner shall adopt any rules needed to accommodate implementation of section 3 of this act. If timelines required under section 3 of this act require the adoption of rules on an emergency basis, the insurance commissioner shall do so.

NEW SECTION. Sec. 5. In the event funds are not appropriated to implement section 3 of this act, including funds for a premium offset, the prescription drug insurance plan under section 3 of this act shall not be implemented until such time as funding is appropriated to fund the plan.

NEW SECTION. Sec. 6. Sections 2 through 5 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.