SENATE BILL REPORT

ESB 6834

BYSenators Sellar, Conner, West, McDonald and Bauer

Establishing a basic health care plan for small business employees.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):February 2, 1990

Majority Report:     That Substitute Senate Bill No. 6834 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

     Signed by Senators von Reichbauer, Chairman; Johnson, Vice Chairman; Fleming, McMullen, Matson, Moore, Sellar, Smitherman.

Senate Staff:Walt Corneille (786-7416)

                February 5, 1990

Senate Committee on Ways & Means

Senate Hearing Date(s):February 5, 1990; February 6, 1990

Majority Report:     That Second Substitute Senate Bill No. 6834 be substituted therefor and the second substitute bill do pass.

     Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bauer, Bluechel, Cantu, Gaspard, Hayner, Johnson, Lee, Newhouse, Saling, Smith.

Senate Staff:Randy Hodgins (786-7715)

                February 14, 1990

AS PASSED SENATE, FEBRUARY 13, 1990

BACKGROUND:

Health insurance policies issued in the state of Washington are required to cover treatment by specified health care providers and certain types of treatment.  These requirements appear in the statute that regulates disability insurance policies, health care maintenance agreements and health care service contracts.  These mandated benefits must be included in the majority of policies issued by any of the companies, health maintenance organizations or health care service contractors.

It has been suggested that because of the numerous mandates that are contained in state law, it is difficult for small businesses to purchase insurance for their employees.  As a result, it is argued, many people working for small business are left without medical insurance coverage.  It has also been suggested that if a basic health insurance product were available, more small businesses would be able to afford insurance for their employees.

SUMMARY:

A basic group disability policy, health care service contract or health maintenance agreement may be offered to employers of fewer than 25 employees.  The basic contract, policy or agreement must provide coverage for hospital expenses and services rendered by a licensed physician or doctor of osteopathic medicine.  The basic policy, contract or agreement is not subject to any of the statutes mandating coverage for specified practitioners or procedures except for the requirements of coverage for a child from birth, and continuation of coverage for a child after the age of eligibility when the child is incapacitated.  The requirement that adopted children be covered applies to any basic health program.

An insurer is not prohibited from offering nor is a purchaser prohibited from seeking benefits in excess of the basic program that is authorized.  The Insurance Commissioner must approve all forms, policies and contracts, and rates for any basic plan must be reasonable in relationship to the benefits.

The Insurance Commissioner is required to collect data from insurers, health care service contractors and health maintenance organizations relating to the basic programs sold.  The data collected must include the number of groups purchasing coverage, the number of insured persons, subscribers, members and their dependents, and the rate and rate increases of the coverage.  The Insurance Commissioner is required to provide by November 1, 1992 a written summary of the data to the Governor, appropriate legislative committees and other interested parties.

The basic group health plan authorized may not supplant an existing policy.  The right of employees to collectively bargain for insurance providing benefits in excess of the basic programs authorized is not restricted.

Appropriation:  $100,000

Revenue:   none

Fiscal Note:    none requested

Senate Committee - Testified:   FINANCIAL INSTITUTIONS & INSURANCE:  Mel Sorensen, Washington Physicians Service, Blue Cross (pro); Enid Layes, AWB (pro); Joan Gaumer, Washington Health Care Association (pro); Tom Curry, Washington State Med. Association (pro); Susie Tracy, Washington State Med. Group Management Association (pro); Dave Broderick, Hospital Association (pro)

Senate Committee - Testified:   WAYS & MEANS:  Mel Sorensen, Washington Physicians Service, Blue Cross (pro); Enid Layes, AWB (pro) Len Eddinger, WSMA (pro)