HOUSE BILL REPORT

HB 1620

BYRepresentatives Padden, Dellwo, Taylor, Day, Lux, Chandler, Crane, Miller and Winsley

Permitting persons to continue group health insurance after the group coverage is terminated, subject to certain conditions.

House Committe on Financial Institutions & Insurance

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (12)

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

House Staff:John Conniff (786-7119)

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

FEBRUARY 3, 1988

BACKGROUND:

Health insurers, health care contractors and health maintenance organizations (HMOs) are required to offer a conversion policy or contract to any person covered under a group health plan that is cancelled or nonrenewed.  The conversion plan must conform to statutory benefit requirements.  Apart from the conversion policy requirements, insurers, contractors, and HMOs are not required to admit a person under another group plan without proof of insurability.

SUMMARY:

SUBSTITUTE BILL:  The Insurance Commissioner is directed to conduct a study of continuation of coverage for persons whose group health care coverage is cancelled or nonrenewed.  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, 1988.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Provisions requiring health insurers to permit certain persons to transfer coverage to a new group are replaced with provisions requiring a study of the affects of such requirements.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Erika Slama, InnKeepers Association; Charles Pederson, Continental Motel and Tony Lazanis, InnKeepers Association.

House Committee - Testified Against:      Joan Gaumer, Blue Cross; Mel Sorensen, Washington Physicians Service, and Ken Bertrand, Group Health Cooperative.

House Committee - Testimony For:    A person whose group health contract is cancelled should be permitted to transfer to another group health contract if the person was eligible under the new group contract at the time the old contract was cancelled.  Without such a requirement, a person whose coverage is cancelled is unable to obtain affordable health care coverage.  This requirement is narrow in its effect and corrects an injustice.

House Committee - Testimony Against:      A person who transfers to a new group without proof of insurability will unfairly increase the cost to the new group.  The rates established for groups are based upon the probable utilization of health benefits of the group.  Requiring insurers to accept transfers from old groups will significantly increase costs.