| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Health Care & Wellness Committee | |
ESB 5261
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
Brief Description: Granting the insurance commissioner the authority to review individual health benefit plan rates.
Sponsors: Senators Keiser, Franklin, Kohl-Welles, Fairley and Kline; by request of Insurance Commissioner.
Brief Summary of Engrossed Bill |
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Hearing Date: 3/19/07
Staff: Dave Knutson (786-7146).
Background:
The majority of people receive their health insurance through their employer. Those who do not
have access to employer sponsored coverage may purchase insurance in the individual market.
Approximately 220,000 Washington residents were insured through the individual market in
2005. While eight insurance carriers offer approved products in Washington, 94.5 percent of
enrollment was concentrated with four major carriers.
Prior to 2000, the Insurance Commissioner was allowed to disapprove rates offered for
individual health plans, when it was determined the rates were unreasonable in relation to the
benefits provided. In 2000, the Legislature adopted numerous changes to the laws governing the
individual market. The Insurance Commissioner is no longer allowed to disapprove filed rates
for the individual market; however, a minimum loss ratio (the percentage of premium paid out in
medical claims) was established. If, in the year following a rate filing, it is determined that a
carrier's actual loss ratio was lower than 72 percent (74 percent minus the 2 percent premium
tax), the carrier must remit the difference to the Washington State Health Insurance Pool
(WSHIP).
Summary of Bill:
The Insurance Commissioner may disapprove rates for the individual market. Rates may be filed
and used after 60 days. The minimum loss ratio is increased to 75 percent (77 percent minus the
2 percent premium tax).
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.