5304-S2.E AMH JOHR HAGE 2

E2SSB 5304 - H AMD TO REVENUE COMM AMD (5304-S2.E AMH REV H2235.7) 000380 ADOPTED 4-8-93

By Representative R. Johnson

     On page 104, beginning on line 1, strike all of subsection (6)(a) and insert

     "(6)(a)  Establish for each year a community-rated maximum premium for the uniform benefits package that shall operate to control overall health care costs in the case that the limited sponsor contribution to a percentage of the lowest priced plan and other market reforms do not stimulate effective price competition and control costs.  The premium cost of the uniform benefits package in 1995 shall be based upon an actuarial determination of the costs of providing the uniform benefits package, assuming cost savings that may result from reductions in cost shifting, the use of managed care, identification of cost-effective and clinically efficacious services, assuming cost increases that may result from the direct or indirect effect of changes in taxation, aging of the population, and availability and effectiveness of new medical technology, and any other factors deemed relevant by the commission.  Beginning in 1996, the growth rate of the premium cost of the uniform benefits package for each certified health plan shall be allowed to increase by a rate no greater than the average growth rate in the cost of the package between 1990 and 1993 as actuarially determined, reduced by two percentage points per year until the growth rate is no greater than the five-year rolling average of growth in Washington per capita personal income, as determined by the office of financial management."

EFFECT:  Modifies maximum premium development process by  clarifying the purpose of the cap, setting forth escalating factors, and setting the reduction basis on a 5-year rolling average.