SENATE BILL REPORT

SB 5466

BYSenators Moore, Bender and Metcalf; by request of Insurance Commissioner

Revising provisions on fees assessed against health maintenance organizations.

Senate Committee on Financial Institutions

Senate Hearing Date(s):February 12, 1987

Majority Report:  That Substitute Senate Bill No. 5466 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Moore, Chairman; Bender, Vice Chairman; Bottiger, Fleming, McDermott, Metcalf, Pullen, von Reichbauer.

Senate Staff:Phil Sorensen (786-7470)

                  February 12, 1987

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS, FEBRUARY 12, 1987

BACKGROUND:

In 1986 the Legislature passed legislation providing that a pro rata share of the cost of regulating health maintenance organizations (HMOs) be assessed to each HMO.  The fee to be charged is based on the HMO's total receipts for the year, but may not exceed 5 1/2 cents per person.  The legislation was intended to allow HMOs, health care service contractors, and regular insurers to be regulated in the same fashion.  Fees collected are currently deposited in the general fund.

SUMMARY:

Each HMO is subject to a minimum $1,000 fee which is to be deposited in the Insurance Commissioner's regulatory account.  HMOs are to be in line with the present practices of health care service contractors and regular insurers with regard to the minimum fee assessed and the deposit of the collected fees. 

Revenue:    Shifts collected funds from general fund to Insurance Commissioner's regulatory account.

Fiscal Note:      none requested

EFFECT OF PROPOSED SUBSTITUTE:

In order to clarify the regulatory role of the Commissioner, some language deleted by the original bill has been reincorporated into the proposed substitute.

Senate Committee - Testified: Joan Gaumer, Blue Cross of WA and Alaska, Healthplus