BILL REQ. #:  Z-1074.1 

Read first time 01/09/2006.   Referred to Committee on Health & Long-Term Care.

     AN ACT Relating to granting the insurance commissioner the authority to review and approve individual health benefit plan rates; amending RCW 48.18.110, 48.44.020, 48.46.060, and 48.02.120; adding a new section to chapter 48.43 RCW; and repealing RCW 48.20.025, 48.44.017, and 48.46.062.

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

Sec. 1   RCW 48.18.110 and 2000 c 79 s 2 are each amended to read as follows:
     (1) The commissioner shall disapprove any such form of policy, application, rider, or endorsement, or withdraw any previous approval thereof, only:
     (a) If it is in any respect in violation of or does not comply with this code or any applicable order or regulation of the commissioner issued pursuant to the code; or
     (b) If it does not comply with any controlling filing theretofore made and approved; or
     (c) If it contains or incorporates by reference any inconsistent, ambiguous or misleading clauses, or exceptions and conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the contract; or
     (d) If it has any title, heading, or other indication of its provisions which is misleading; or
     (e) If purchase of insurance thereunder is being solicited by deceptive advertising.
     (2) In addition to the grounds for disapproval of any such form as provided in subsection (1) of this section, the commissioner may disapprove any form of disability insurance policy, ((except an individual health benefit plan,)) if the benefits provided therein are unreasonable in relation to the premium charged. Rates, or any modification of rates, for individual health benefit plans may not be used until filed with and approved by the commissioner.

Sec. 2   RCW 48.44.020 and 2000 c 79 s 28 are each amended to read as follows:
     (1) Any health care service contractor may enter into contracts with or for the benefit of persons or groups of persons which require prepayment for health care services by or for such persons in consideration of such health care service contractor providing one or more health care services to such persons and such activity shall not be subject to the laws relating to insurance if the health care services are rendered by the health care service contractor or by a participating provider.
     (2) The commissioner may on examination, subject to the right of the health care service contractor to demand and receive a hearing under chapters 48.04 and 34.05 RCW, disapprove any individual or group contract form for any of the following grounds:
     (a) If it contains or incorporates by reference any inconsistent, ambiguous or misleading clauses, or exceptions and conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the contract; or
     (b) If it has any title, heading, or other indication of its provisions which is misleading; or
     (c) If purchase of health care services thereunder is being solicited by deceptive advertising; or
     (d) If it contains unreasonable restrictions on the treatment of patients; or
     (e) If it violates any provision of this chapter; or
     (f) If it fails to conform to minimum provisions or standards required by regulation made by the commissioner pursuant to chapter 34.05 RCW; or
     (g) If any contract for health care services with any state agency, division, subdivision, board, or commission or with any political subdivision, municipal corporation, or quasi-municipal corporation fails to comply with state law.
     (3) In addition to the grounds listed in subsection (2) of this section, the commissioner may disapprove any ((group)) contract if the benefits provided therein are unreasonable in relation to the amount charged for the contract. Rates, or any modification of rates, for individual health benefit plans may not be used until filed with and approved by the commissioner.
     (4)(a) Every contract between a health care service contractor and a participating provider of health care services shall be in writing and shall state that in the event the health care service contractor fails to pay for health care services as provided in the contract, the enrolled participant shall not be liable to the provider for sums owed by the health care service contractor. Every such contract shall provide that this requirement shall survive termination of the contract.
     (b) No participating provider, agent, trustee, or assignee may maintain any action against an enrolled participant to collect sums owed by the health care service contractor.

Sec. 3   RCW 48.46.060 and 2000 c 79 s 31 are each amended to read as follows:
     (1) Any health maintenance organization may enter into agreements with or for the benefit of persons or groups of persons, which require prepayment for health care services by or for such persons in consideration of the health maintenance organization providing health care services to such persons. Such activity is not subject to the laws relating to insurance if the health care services are rendered directly by the health maintenance organization or by any provider which has a contract or other arrangement with the health maintenance organization to render health services to enrolled participants.
     (2) All forms of health maintenance agreements issued by the organization to enrolled participants or other marketing documents purporting to describe the organization's comprehensive health care services shall comply with such minimum standards as the commissioner deems reasonable and necessary in order to carry out the purposes and provisions of this chapter, and which fully inform enrolled participants of the health care services to which they are entitled, including any limitations or exclusions thereof, and such other rights, responsibilities and duties required of the contracting health maintenance organization.
     (3) Subject to the right of the health maintenance organization to demand and receive a hearing under chapters 48.04 and 34.05 RCW, the commissioner may disapprove an individual or group agreement form for any of the following grounds:
     (a) If it contains or incorporates by reference any inconsistent, ambiguous, or misleading clauses, or exceptions or conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the agreement;
     (b) If it has any title, heading, or other indication which is misleading;
     (c) If purchase of health care services thereunder is being solicited by deceptive advertising;
     (d) If it contains unreasonable restrictions on the treatment of patients;
     (e) If it is in any respect in violation of this chapter or if it fails to conform to minimum provisions or standards required by the commissioner by rule under chapter 34.05 RCW; or
     (f) If any agreement for health care services with any state agency, division, subdivision, board, or commission or with any political subdivision, municipal corporation, or quasi-municipal corporation fails to comply with state law.
     (4) In addition to the grounds listed in subsection (2) of this section, the commissioner may disapprove any ((group)) agreement if the benefits provided therein are unreasonable in relation to the amount charged for the agreement. Rates, or any modification of rates, for individual health benefit plans may not be used until filed with and approved by the commissioner.
     (5) No health maintenance organization authorized under this chapter shall cancel or fail to renew the enrollment on any basis of an enrolled participant or refuse to transfer an enrolled participant from a group to an individual basis for reasons relating solely to age, sex, race, or health status. Nothing contained herein shall prevent cancellation of an agreement with enrolled participants (a) who violate any published policies of the organization which have been approved by the commissioner, or (b) who are entitled to become eligible for medicare benefits and fail to enroll for a medicare supplement plan offered by the health maintenance organization and approved by the commissioner, or (c) for failure of such enrolled participant to pay the approved charge, including cost-sharing, required under such contract, or (d) for a material breach of the health maintenance agreement.
     (6) No agreement form or amendment to an approved agreement form shall be used unless it is first filed with the commissioner.

NEW SECTION.  Sec. 4   A new section is added to chapter 48.43 RCW to read as follows:
     (1) All filings made under this section are exempt from the provisions of RCW 48.02.120. After the commissioner determines a filing to be substantially complete, the entire filing, including all supporting information and documentation, is available for public inspection during business hours upon reasonable notice from the requestor.
     (2) After determining that the filing is substantially complete, the commissioner shall notify the public of any proposed individual health benefits plan rate adjustment when the overall requested rate change is greater than seven percent plus the adjustment in the current medical consumer price index, as defined in subsection (12) of this section.
     (3) The commissioner shall take into consideration the surplus of the carrier when reviewing a rate increase under this section.
     (4) A filing made under this section shall be approved forty-five days after being made available for public inspection unless:
     (a) In the case of a filing where the overall requested rate change is greater than seven percent plus the adjustment in the current medical consumer price index, a petition for a hearing is filed with the commissioner within thirty days after the filing is made available for public inspection, and the commissioner grants a hearing:
     (b) The commissioner determines to hold a hearing; or
     (c) The commissioner disapproves the filing.
     (5) A person has standing to petition for a hearing under subsection (4)(a) of this section if the commissioner determines that:
     (a) The petitioner is directly affected by the proposed rate increase; and
     (b) The petitioner is able to make a substantial contribution to the determination of whether to approve or disapprove the filing.
     (6) The parties to a hearing held under this section are the petitioner and the carrier.
     (7) Only the commissioner or his or her designee shall preside over hearings and other administrative proceedings arising under this section. The commissioner or his or her designee may be assisted by the staff of the office of the insurance commissioner during a hearing and in making a determination to approve or disapprove a filing.
     (8) If a hearing is held, the commissioner shall approve or disapprove a filing made under this section within thirty days after the conclusion of the hearing.
     (9) A carrier may not use the proposed rates in a filing made under this section until the filing is approved either as originally submitted or as amended.
     (10) If a filing made under this section is withdrawn by the carrier, a hearing shall not be held on the withdrawn filing.
     (11) The public notice required under subsection (2) of this section shall be made via distribution to the news media, posting on the web site maintained by the commissioner, and by electronic mail to any person who requests placement on a mailing list maintained by the commissioner for this purpose. Persons without electronic mail addresses may request that notice be sent via first class mail.
     (12) For the purpose of this section, "medical consumer price index" means the medical care component of the consumer price index (CPI), not seasonally adjusted, for all urban consumers in the Seattle-Tacoma-Bremerton area. The CPI adjustment component must be determined by dividing the most recent CPI for the current year by the CPI for the same month for the prior year. Details of the CPI data used to determine the adjustment shall be included as a part of the rate filing submitted to the commissioner.
     (13) The commissioner shall adopt rules for implementing this section. The rules shall include provisions for promptly scheduling and commencing hearings, and procedures to prevent delays in commencing or continuing hearings without good cause. The rules shall also include standards for taking into consideration a carrier's surplus when reviewing rate filings.

Sec. 5   RCW 48.02.120 and 1985 c 264 s 2 are each amended to read as follows:
     (1) The commissioner shall preserve in permanent form records of his or her proceedings, hearings, investigations, and examinations, and shall file such records in his or her office.
     (2) The records of the commissioner and insurance filings in his or her office shall be open to public inspection, except as otherwise provided by this code.
     (3) Actuarial formulas, statistics, and assumptions submitted in support of a rate or form filing by an insurer, health care service contractor, or health maintenance organization or submitted to the commissioner upon his or her request shall be withheld from public inspection in order to preserve trade secrets or prevent unfair competition.
     (4) This section does not apply to filings made under section 4 of this act.

NEW SECTION.  Sec. 6   The following acts or parts of acts are each repealed:
     (1) RCW 48.20.025 (Schedule of rates for individual health benefit plans -- Loss ratio -- Remittance of premiums -- Definitions) and 2003 c 248 s 8, 2001 c 196 s 1, & 2000 c 79 s 3;
     (2) RCW 48.44.017 (Schedule of rates for individual contracts -- Loss ratio -- Remittance of premiums -- Definitions) and 2001 c 196 s 11 & 2000 c 79 s 29; and
     (3) RCW 48.46.062 (Schedule of rates for individual agreements-- Loss ratio -- Remittance of premiums -- Definitions) and 2001 c 196 s 12 & 2000 c 79 s 32.