AN
ACT Relating to access to individual health insurance coverage; amending RCW
48.04.010, 48.18.110, 48.20.028, 48.41.020, 48.41.030, 48.41.040, 48.41.060,
48.41.080, 48.41.090, 48.41.100, 48.41.110, 48.41.120, 48.41.130, 48.41.140,
48.41.200, 48.43.015, 48.43.025, 48.43.035, 48.44.020, 48.44.022, 48.46.060,
48.46.064, 70.47.100, 70.47.010, 70.47.020, and 41.05.140; reenacting and
amending RCW 48.43.005, 70.47.060, 43.84.092, 43.84.092, 43.84.092, and
43.79A.040; adding a new section to chapter 48.20 RCW; adding a new section to
chapter 48.41 RCW; adding new sections to chapter 48.43 RCW; adding new
sections to chapter 48.46 RCW; adding a new section to chapter 48.44 RCW;
adding a new section to chapter 48.01 RCW; adding a new section to chapter
41.05 RCW; creating new sections; repealing RCW 48.41.180; providing effective
dates; providing an expiration date; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
48.04.010 and 1990 1st ex.s. c 3 s 1 are each amended to read as follows:
(1)
The commissioner may hold a hearing for any purpose within the scope of this
code as he or she may deem necessary. The commissioner shall hold a hearing:
(a)
If required by any provision of this code; or
(b)
Upon written demand for a hearing made by any person aggrieved by any act,
threatened act, or failure of the commissioner to act, if such failure is
deemed an act under any provision of this code, or by any report, promulgation,
or order of the commissioner other than an order on a hearing of which such
person was given actual notice or at which such person appeared as a party, or
order pursuant to the order on such hearing.
(2)
Any such demand for a hearing shall specify in what respects such person is so
aggrieved and the grounds to be relied upon as basis for the relief to be
demanded at the hearing.
(3)
Unless a person aggrieved by a written order of the commissioner demands a
hearing thereon within ninety days after receiving notice of such order, or in
the case of a licensee under Title 48 RCW within ninety days after the
commissioner has mailed the order to the licensee at the most recent address
shown in the commissioner's licensing records for the licensee, the right to
such hearing shall conclusively be deemed to have been waived.
(4)
If a hearing is demanded by a licensee whose license has been temporarily suspended
pursuant to RCW 48.17.540, the commissioner shall hold such hearing demanded
within thirty days after receipt of the demand or within thirty days of the
effective date of a temporary license suspension issued after such demand,
unless postponed by mutual consent.
(5)
A licensee under this title may request that a hearing authorized under this
section be presided over by an administrative law judge assigned under chapter
34.12 RCW. Any such request shall not be denied.
(6)
Any hearing held relating to section 3, 29, or 32 of this act shall be presided
over by an administrative law judge assigned under chapter 34.12 RCW.
Sec.
2. RCW
48.18.110 and 1985 c 264 s 9 are each amended to read as follows:
(1)
The commissioner shall disapprove any such form of policy, application, rider,
or endorsement, or withdraw any previous approval thereof, only:
(a)
If it is in any respect in violation of or does not comply with this code or
any applicable order or regulation of the commissioner issued pursuant to the
code; or
(b)
If it does not comply with any controlling filing theretofore made and
approved; or
(c)
If it contains or incorporates by reference any inconsistent, ambiguous or
misleading clauses, or exceptions and conditions which unreasonably or
deceptively affect the risk purported to be assumed in the general coverage of
the contract; or
(d)
If it has any title, heading, or other indication of its provisions which is
misleading; or
(e)
If purchase of insurance thereunder is being solicited by deceptive
advertising.
(2)
In addition to the grounds for disapproval of any such form as provided in
subsection (1) of this section, the commissioner may disapprove any form of
disability insurance policy, except an individual health benefit plan,
if the benefits provided therein are unreasonable in relation to the premium
charged.
NEW
SECTION. Sec. 3. A
new section is added to chapter 48.20 RCW to read as follows:
(1)
The definitions in this subsection apply throughout this section unless the
context clearly requires otherwise.
(a)
"Claims" means the cost to the insurer of health care services, as
defined in RCW 48.43.005, provided to a policyholder or paid to or on behalf of
the policyholder in accordance with the terms of a health benefit plan, as
defined in RCW 48.43.005. This includes capitation payments or other similar
payments made to providers for the purpose of paying for health care services
for a policyholder.
(b)
"Claims reserves" means: (i) The liability for claims which have
been reported but not paid; (ii) the liability for claims which have not been
reported but which may reasonably be expected; (iii) active life reserves; and
(iv) additional claims reserves whether for a specific liability purpose or
not.
(c)
"Earned premiums" means premiums, as defined in RCW 48.43.005, plus
any rate credits or recoupments less any refunds, for the applicable period,
whether received before, during, or after the applicable period.
(d)
"Incurred claims expense" means claims paid during the applicable
period plus any increase, or less any decrease, in the claims reserves.
(e)
"Loss ratio" means incurred claims expense as a percentage of earned
premiums.
(f)
"Reserves" means: (i) Active life reserves; and (ii) additional
reserves whether for a specific liability purpose or not.
(2)
An insurer shall file, for informational purposes only, a notice of its
schedule of rates for its individual health benefit plans with the commissioner
prior to use.
(3)
An insurer shall file with the notice required under subsection (2) of this
section supporting documentation of its method of determining the rates
charged. The commissioner may request only the following supporting documentation:
(a)
A description of the insurer's rate-making methodology;
(b)
An actuarially determined estimate of incurred claims which includes the
experience data, assumptions, and justifications of the insurer's projection;
(c)
The percentage of premium attributable in aggregate for nonclaims expenses used
to determine the adjusted community rates charged; and
(d)
A certification by a member of the American academy of actuaries, or other
person approved by the commissioner, that the adjusted community rate charged
can be reasonably expected to result in a loss ratio that meets or exceeds the
loss ratio standard established in subsection (7) of this section.
(4)
The commissioner may not disapprove or otherwise impede the implementation of
the filed rates.
(5)
By the last day of May each year any insurer providing individual health
benefit plans in this state shall file for review by the commissioner
supporting documentation of its actual loss ratio for its individual health
benefit plans offered in the state in aggregate for the preceding calendar
year. The filing shall include a certification by a member of the American
academy of actuaries, or other person approved by the commissioner, that the
actual loss ratio has been calculated in accordance with accepted actuarial
principles.
(a)
At the expiration of a thirty-day period beginning with the date the filing is
delivered to the commissioner, the filing shall be deemed approved unless prior
thereto the commissioner contests the calculation of the actual loss ratio.
(b)
If the commissioner contests the calculation of the actual loss ratio, the
commissioner shall state in writing the grounds for contesting the calculation
to the insurer.
(c)
Any dispute regarding the calculation of the actual loss ratio shall, upon
written demand of either the commissioner or the insurer, be submitted to
hearing under chapters 48.04 and 34.05 RCW.
(6)
If the actual loss ratio for the preceding calendar year is less than the loss
ratio established in subsection (7) of this section, a remittance is due and
the following shall apply:
(a)
The insurer shall calculate a percentage of premium to be remitted to the
Washington state health insurance pool by subtracting the actual loss ratio for
the preceding year from the loss ratio established in subsection (7) of this
section.
(b)
The remittance to the Washington state health insurance pool is the percentage
calculated in (a) of the subsection, multiplied by the premium earned from each
enrollee in the previous calendar year. Interest shall be added to the
remittance due at a five percent annual rate calculated from the end of the
calendar year for which the remittance is due to the date the remittance is
made.
(c)
All remittances shall be aggregated and such amounts shall be remitted to the
Washington state high risk pool to be used as directed by the pool board of
directors.
(d)
Any remittance required to be issued under this section shall be issued within
thirty days after the actual loss ratio is deemed approved under subsection
(5)(a) of this section or the determination by an administrative law judge
under subsection (5)(c) of this section.
(7)
The loss ratio applicable to this section shall be seventy-four percent minus
the premium tax rate applicable to the insurer's individual health benefit
plans under RCW 48.14.0201.
Sec.
4. RCW
48.20.028 and 1997 c 231 s 207 are each amended to read as follows:
(1)(((a)
An insurer offering any health benefit plan to any individual shall offer and
actively market to all individuals a health benefit plan providing benefits
identical to the schedule of covered health benefits that are required to be
delivered to an individual enrolled in the basic health plan subject to RCW
48.43.025 and 48.43.035. Nothing in this subsection shall preclude an insurer
from offering, or an individual from purchasing, other health benefit plans
that may have more or less comprehensive benefits than the basic health plan,
provided such plans are in accordance with this chapter. An insurer offering a
health benefit plan that does not include benefits provided in the basic health
plan shall clearly disclose these differences to the individual in a brochure
approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397,
48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit
plan is the mandatory offering under (a) of this subsection that provides
benefits identical to the basic health plan, to the extent these requirements
differ from the basic health plan.
(2)))
Premiums for health benefit plans for individuals shall be calculated using the
adjusted community rating method that spreads financial risk across the
carrier's entire individual product population. All such rates shall conform
to the following:
(a)
The insurer shall develop its rates based on an adjusted community rate and may
only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age;
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The insurer shall be permitted to develop separate rates for individuals age
sixty-five or older for coverage for which medicare is the primary payer and
coverage for which medicare is not the primary payer. Both rates shall be
subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(((3)))
(2) Adjusted community rates established under this section shall pool
the medical experience of all individuals purchasing coverage, and shall not be
required to be pooled with the medical experience of health benefit plans
offered to small employers under RCW 48.21.045.
(((4)))
(3) As used in this section, "health benefit plan," (("basic
health plan,")) "adjusted community rate," and
"wellness activities" mean the same as defined in RCW 48.43.005.
Sec.
5. RCW
48.41.020 and 1987 c 431 s 2 are each amended to read as follows:
It
is the purpose and intent of the legislature to provide access to health
insurance coverage to all residents of Washington who are denied ((adequate))
health insurance ((for any reason. It is the intent of the legislature that
adequate levels of health insurance coverage be made available to residents of
Washington who are otherwise considered uninsurable or who are underinsured)).
It is the intent of the Washington state health insurance coverage access act
to provide a mechanism to ((insure)) ensure the availability of
comprehensive health insurance to persons unable to obtain such insurance
coverage on either an individual or group basis directly under any health plan.
Sec.
6. RCW
48.41.030 and 1997 c 337 s 6 are each amended to read as follows:
((As
used in this chapter, the following terms have the meaning indicated,)) The
definitions in this section apply throughout this chapter unless the
context clearly requires otherwise((:)).
(1)
"Accounting year" means a twelve-month period determined by the board
for purposes of record-keeping and accounting. The first accounting year may
be more or less than twelve months and, from time to time in subsequent years,
the board may order an accounting year of other than twelve months as may be
required for orderly management and accounting of the pool.
(2)
"Administrator" means the entity chosen by the board to administer
the pool under RCW 48.41.080.
(3)
"Board" means the board of directors of the pool.
(4)
"Commissioner" means the insurance commissioner.
(5)
"Covered person" means any individual resident of this state who is
eligible to receive benefits from any member, or other health plan.
(6)
"Health care facility" has the same meaning as in RCW 70.38.025.
(7)
"Health care provider" means any physician, facility, or health care
professional, who is licensed in Washington state and entitled to reimbursement
for health care services.
(8)
"Health care services" means services for the purpose of preventing,
alleviating, curing, or healing human illness or injury.
(9)
"Health carrier" or "carrier" has the same meaning as in
RCW 48.43.005.
(10)
"Health coverage" means any group or individual disability insurance
policy, health care service contract, and health maintenance agreement, except
those contracts entered into for the provision of health care services pursuant
to Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395 et seq. The
term does not include short-term care, long-term care, dental, vision,
accident, fixed indemnity, disability income contracts, civilian health and
medical program for the uniform services (CHAMPUS), 10 U.S.C. 55, limited
benefit or credit insurance, coverage issued as a supplement to liability
insurance, insurance arising out of the worker's compensation or similar law,
automobile medical payment insurance, or insurance under which benefits are
payable with or without regard to fault and which is statutorily required to be
contained in any liability insurance policy or equivalent self-insurance.
(((10)))
(11) "Health plan" means any arrangement by which persons,
including dependents or spouses, covered or making application to be covered
under this pool, have access to hospital and medical benefits or reimbursement
including any group or individual disability insurance policy; health care
service contract; health maintenance agreement; uninsured arrangements of group
or group-type contracts including employer self-insured, cost-plus, or other
benefit methodologies not involving insurance or not governed by Title 48 RCW;
coverage under group-type contracts which are not available to the general
public and can be obtained only because of connection with a particular
organization or group; and coverage by medicare or other governmental
benefits. This term includes coverage through "health coverage" as
defined under this section, and specifically excludes those types of programs
excluded under the definition of "health coverage" in subsection (((9)))
(10) of this section.
(((11)))
(12) "Medical assistance" means coverage under Title XIX of
the federal Social Security Act (42 U.S.C., Sec. 1396 et seq.) and chapter
74.09 RCW.
(((12)))
(13) "Medicare" means coverage under Title XVIII of the Social
Security Act, (42 U.S.C. Sec. 1395 et seq., as amended).
(((13)))
(14) "Member" means any commercial insurer which provides
disability insurance or stop loss insurance, any health care service
contractor, and any health maintenance organization licensed under Title 48
RCW. "Member" also means the Washington state health care authority
as issuer of the state uniform medical plan. "Member" shall also
mean, as soon as authorized by federal law, employers and other entities,
including a self-funding entity and employee welfare benefit plans that provide
health plan benefits in this state on or after May 18, 1987.
"Member" does not include any insurer, health care service
contractor, or health maintenance organization whose products are exclusively
dental products or those products excluded from the definition of "health
coverage" set forth in subsection (((9))) (10) of this
section.
(((14)))
(15) "Network provider" means a health care provider who has
contracted in writing with the pool administrator or a health carrier
contracting with the pool administrator to offer pool coverage to accept
payment from and to look solely to the pool or health carrier according
to the terms of the pool health plans.
(((15)))
(16) "Plan of operation" means the pool, including articles,
by-laws, and operating rules, adopted by the board pursuant to RCW 48.41.050.
(((16)))
(17) "Point of service plan" means a benefit plan offered by
the pool under which a covered person may elect to receive covered services
from network providers, or nonnetwork providers at a reduced rate of benefits.
(((17)))
(18) "Pool" means the Washington state health insurance pool
as created in RCW 48.41.040.
(((18)
"Substantially equivalent health plan" means a "health
plan" as defined in subsection (10) of this section which, in the judgment
of the board or the administrator, offers persons including dependents or
spouses covered or making application to be covered by this pool an overall
level of benefits deemed approximately equivalent to the minimum benefits
available under this pool.))
Sec.
7. RCW
48.41.040 and 1989 c 121 s 2 are each amended to read as follows:
(1)
There is ((hereby)) created a nonprofit entity to be known as the
Washington state health insurance pool. All members in this state on or after
May 18, 1987, shall be members of the pool. When authorized by federal law,
all self-insured employers shall also be members of the pool.
(2)
Pursuant to chapter 34.05 RCW the commissioner shall, within ninety days after
May 18, 1987, give notice to all members of the time and place for the initial
organizational meetings of the pool. A board of directors shall be
established, which shall be comprised of ((nine)) ten members.
((The commissioner shall select three members of the board who shall
represent (a) the general public, (b) health care providers, and (c) health
insurance agents.)) The governor shall select one member of the board
from each list of three nominees submitted by state-wide organizations
representing each of the following: (a) Health care providers; (b) health
insurance agents; (c) small employers; and (d) large employers. The governor
shall select two members of the board from a list of nominees submitted by
state-wide organizations representing health care consumers. The remaining
four members of the board shall be selected by election from among the
members of the pool. The elected members shall, to the extent possible,
include at least one representative of health care service contractors, one
representative of health maintenance organizations, and one representative of
commercial insurers which provides disability insurance. The members of the
board shall elect a chair from the voting members of the board. The insurance
commissioner shall be a nonvoting, ex officio member. When self-insured
organizations other than the Washington state health care authority
become eligible for participation in the pool, the membership of the board
shall be increased to eleven and at least one member of the board shall
represent the self-insurers.
(3)
The original members of the board of directors shall be appointed for intervals
of one to three years. Thereafter, all board members shall serve a term of
three years. Board members shall receive no compensation, but shall be
reimbursed for all travel expenses as provided in RCW 43.03.050 and 43.03.060.
(4)
The board shall submit to the commissioner a plan of operation for the pool and
any amendments thereto necessary or suitable to assure the fair, reasonable,
and equitable administration of the pool. The commissioner shall, after notice
and hearing pursuant to chapter 34.05 RCW, approve the plan of operation if it
is determined to assure the fair, reasonable, and equitable administration of
the pool and provides for the sharing of pool losses on an equitable,
proportionate basis among the members of the pool. The plan of operation shall
become effective upon approval in writing by the commissioner consistent with
the date on which the coverage under this chapter must be made available. If
the board fails to submit a plan of operation within one hundred eighty days
after the appointment of the board or any time thereafter fails to submit
acceptable amendments to the plan, the commissioner shall, within ninety days
after notice and hearing pursuant to chapters 34.05 and 48.04 RCW, adopt such
rules as are necessary or advisable to effectuate this chapter. The rules
shall continue in force until modified by the commissioner or superseded by a
plan submitted by the board and approved by the commissioner.
NEW
SECTION. Sec. 8. Sixty
days from the effective date of this section, the existing board of directors
of the Washington state health insurance pool shall be dissolved, and the
appointment or election of new members under RCW 48.41.040 shall be effective.
For purposes of setting terms, the new members shall be treated as original
members.
Sec.
9. RCW
48.41.060 and 1997 c 337 s 5 are each amended to read as follows:
(1)
The board shall have the general powers and authority granted under the laws of
this state to insurance companies, health care service contractors, and health
maintenance organizations, licensed or registered to offer or provide the kinds
of health coverage defined under this title. In addition thereto, the board ((may:
(1)
Enter into contracts as are necessary or proper to carry out the provisions and
purposes of this chapter including the authority, with the approval of the
commissioner, to enter into contracts with similar pools of other states for
the joint performance of common administrative functions, or with persons or
other organizations for the performance of administrative functions;
(2)
Sue or be sued, including taking any legal action as necessary to avoid the
payment of improper claims against the pool or the coverage provided by or
through the pool;
(3))) shall:
(a)
Designate or establish the standard health questionnaire to be used under RCW
48.41.100 and section 21 of this act, including the form and content of the
standard health questionnaire and the method of its application. The
questionnaire must provide for an objective evaluation of an individual's
health status by assigning a discreet measure, such as a system of point
scoring to each individual. The questionnaire must not contain any questions
related to pregnancy, and pregnancy shall not be a basis for coverage by the
pool. The questionnaire shall be designed such that it is reasonably expected
to identify the eight percent of persons who are the most costly to treat who
are under individual coverage in health benefit plans, as defined in RCW
48.43.005, in Washington state or are covered by the pool, if applied to all
such persons;
(b)
Obtain from a member of the American academy of actuaries, who is independent
of the board, a certification that the standard health questionnaire meets the
requirements of (a) of this subsection;
(c)
Approve the standard health questionnaire and any modifications needed to
comply with this chapter. The standard health questionnaire shall be submitted
to an actuary for certification, modified as necessary, and approved at least
every eighteen months. The designation and approval of the standard health
questionnaire by the board shall not be subject to review and approval by the
commissioner. The standard health questionnaire or any modification thereto
shall not be used until ninety days after public notice of the approval of the
questionnaire or any modification thereto, except that the initial standard
health questionnaire approved for use by the board after the effective date of
this section may be used immediately following public notice of such approval;
(d)
Establish appropriate rates, rate schedules, rate adjustments, expense
allowances, ((agent referral fees,)) claim reserve formulas and any
other actuarial functions appropriate to the operation of the pool. Rates
shall not be unreasonable in relation to the coverage provided, the risk
experience, and expenses of providing the coverage. Rates and rate schedules
may be adjusted for appropriate risk factors such as age and area variation in
claim costs and shall take into consideration appropriate risk factors in
accordance with established actuarial underwriting practices consistent with
Washington state ((small group)) individual plan rating
requirements under RCW ((48.44.023 and 48.46.066)) 48.44.022 and
48.46.064;
(((4)))
(e) Assess members of the pool in accordance with the provisions of this
chapter, and make advance interim assessments as may be reasonable and
necessary for the organizational or interim operating expenses. Any interim
assessments will be credited as offsets against any regular assessments due
following the close of the year;
(((5)))
(f) Issue policies of health coverage in accordance with the
requirements of this chapter;
(((6)))
(g) Establish procedures for the administration of the premium discount
provided under RCW 48.41.200(3)(a)(iii);
(h)
Contract with the Washington state health care authority for the administration
of the premium discounts provided under RCW 48.41.200(3)(a) (i) and (ii);
(i)
Set a reasonable fee to be paid to an insurance agent licensed in Washington
state for submitting an acceptable application for enrollment in the pool; and
(j)
Provide certification to the commissioner when assessments will exceed the
threshold level established in section 36 of this act.
(2)
In addition thereto, the board may:
(a)
Enter into contracts as are necessary or proper to carry out the provisions and
purposes of this chapter including the authority, with the approval of the
commissioner, to enter into contracts with similar pools of other states for
the joint performance of common administrative functions, or with persons or
other organizations for the performance of administrative functions;
(b)
Sue or be sued, including taking any legal action as necessary to avoid the
payment of improper claims against the pool or the coverage provided by or
through the pool;
(c)
Appoint appropriate legal, actuarial, and other committees as necessary
to provide technical assistance in the operation of the pool, policy, and other
contract design, and any other function within the authority of the pool; and
(((7)))
(d) Conduct periodic audits to assure the general accuracy of the
financial data submitted to the pool, and the board shall cause the pool to
have an annual audit of its operations by an independent certified public
accountant.
(3)
Nothing in this section shall be construed to require or authorize the adoption
of rules under chapter 34.05 RCW.
Sec.
10. RCW
48.41.080 and 1997 c 231 s 212 are each amended to read as follows:
The
board shall select an administrator ((from the membership of the pool
whether domiciled in this state or another state)) through a competitive
bidding process to administer the pool.
(1)
The board shall evaluate bids based upon criteria established by the board,
which shall include:
(a)
The administrator's proven ability to handle health coverage;
(b)
The efficiency of the administrator's claim-paying procedures;
(c)
An estimate of the total charges for administering the plan; and
(d)
The administrator's ability to administer the pool in a cost-effective manner.
(2)
The administrator shall serve for a period of three years subject to removal
for cause. At least six months prior to the expiration of each three-year
period of service by the administrator, the board shall invite all interested
parties, including the current administrator, to submit bids to serve as the
administrator for the succeeding three-year period. Selection of the
administrator for this succeeding period shall be made at least three months
prior to the end of the current three-year period.
(3)
The administrator shall perform such duties as may be assigned by the board
including:
(a)
((All)) Administering eligibility and administrative claim
payment functions relating to the pool;
(b)
Establishing a premium billing procedure for collection of premiums from
covered persons. Billings shall be made on a periodic basis as determined by
the board, which shall not be more frequent than a monthly billing;
(c)
Performing all necessary functions to assure timely payment of benefits to
covered persons under the pool including:
(i)
Making available information relating to the proper manner of submitting a
claim for benefits to the pool, and distributing forms upon which submission
shall be made;
(ii)
Taking steps necessary to offer and administer managed care benefit plans; and
(iii)
Evaluating the eligibility of each claim for payment by the pool;
(d)
Submission of regular reports to the board regarding the operation of the
pool. The frequency, content, and form of the report shall be as determined by
the board;
(e)
Following the close of each accounting year, determination of net paid and
earned premiums, the expense of administration, and the paid and incurred
losses for the year and reporting this information to the board and the
commissioner on a form as prescribed by the commissioner.
(4)
The administrator shall be paid as provided in the contract between the board
and the administrator for its expenses incurred in the performance of its
services.
Sec.
11. RCW
48.41.090 and 1989 c 121 s 6 are each amended to read as follows:
(1)
Following the close of each accounting year, the pool administrator shall
determine the net premium (premiums less administrative expense allowances),
the pool expenses of administration, and incurred losses for the year, taking
into account investment income and other appropriate gains and losses.
(2)(a)
Each member's proportion of participation in the pool shall be determined
annually by the board based on annual statements and other reports deemed
necessary by the board and filed by the member with the commissioner; and shall
be determined by multiplying the total cost of pool operation by a fraction((,)).
The numerator of ((which)) the fraction equals that member's
total number of resident insured persons, including spouse and dependents ((under
the member's)), covered under all health plans in the state by
that member during the preceding calendar year((, and)). The
denominator of ((which)) the fraction equals the total number of
resident insured persons, including spouses and dependents ((insured)),
covered under all health plans in the state by all pool members during
the preceding calendar year.
(b)
For purposes of calculating the numerator and the denominator under (a) of
this subsection:
(i)
All health plans in the state by the state health care authority include only
the uniform medical plan; and
(ii)
Each ten resident insured persons, including spouse and dependents, under a
stop loss plan or the uniform medical plan shall count as one resident insured
person.
(c)
Except as provided in section 36 of this act, any deficit incurred by the
pool shall be recouped by assessments among members apportioned under this
subsection pursuant to the formula set forth by the board among members.
(3)
The board may abate or defer, in whole or in part, the assessment of a member
if, in the opinion of the board, payment of the assessment would endanger the
ability of the member to fulfill its contractual obligations. If an assessment
against a member is abated or deferred in whole or in part, the amount by which
such assessment is abated or deferred may be assessed against the other members
in a manner consistent with the basis for assessments set forth in subsection
(2) of this section. The member receiving such abatement or deferment shall
remain liable to the pool for the deficiency.
(4)
If assessments exceed actual losses and administrative expenses of the pool,
the excess shall be held at interest and used by the board to offset future
losses or to reduce pool premiums. As used in this subsection, "future
losses" includes reserves for incurred but not reported claims.
Sec.
12. RCW
48.41.100 and 1995 c 34 s 5 are each amended to read as follows:
(1)
((Any individual)) The following persons who ((is a))
are residents of this state ((is)) are eligible for
pool coverage ((upon providing evidence of rejection for medical
reasons, a requirement of restrictive riders, an up-rated premium, or a
preexisting conditions limitation on health insurance, the effect of which is
to substantially reduce coverage from that received by a person considered a
standard risk, by at least one member within six months of the date of
application. Evidence of rejection may be waived in accordance with rules
adopted by the board)):
(a)
Any person who provides evidence of a carrier's decision not to accept him or
her for enrollment in an individual health benefit plan as defined in RCW
48.43.005 based upon, and within ninety days of the receipt of, the results of
the standard health questionnaire designated by the board and administered by
health carriers under section 21 of this act;
(b)
Any person who continues to be eligible for pool coverage based upon the
results of the standard health questionnaire designated by the board and
administered by the pool administrator pursuant to subsection (3) of this
section;
(c)
Any person who resides in a county of the state where no carrier or insurer
regulated under chapter 48.15 RCW offers to the public an individual health
benefit plan other than a catastrophic health plan as defined in RCW 48.43.005
at the time of application to the pool, and who makes direct application to the
pool; and
(d)
Any medicare eligible person upon providing evidence of rejection for medical
reasons, a requirement of restrictive riders, an up-rated premium, or a
preexisting conditions limitation on a medicare supplemental insurance policy
under chapter 48.66 RCW, the effect of which is to substantially reduce
coverage from that received by a person considered a standard risk by at least
one member within six months of the date of application.
(2)
The following persons are not eligible for coverage by the pool:
(a)
Any person having terminated coverage in the pool unless (i) twelve months have
lapsed since termination, or (ii) that person can show continuous other
coverage which has been involuntarily terminated for any reason other than
nonpayment of premiums;
(b)
Any person on whose behalf the pool has paid out ((five hundred thousand))
one million dollars in benefits;
(c)
Inmates of public institutions and persons whose benefits are duplicated under
public programs;
(d)
Any person who resides in a county of the state where any carrier or insurer
regulated under chapter 48.15 RCW offers to the public an individual health
benefit plan other than a catastrophic health plan as defined in RCW 48.43.005
at the time of application to the pool and who does not qualify for pool
coverage based upon the results of the standard health questionnaire, or
pursuant to subsection (1)(d) of this section.
(3)
((Any person whose health insurance coverage is involuntarily terminated for
any reason other than nonpayment of premium may apply for coverage under the
plan.)) When a carrier or insurer regulated under chapter 48.15 RCW
begins to offer an individual health benefit plan in a county where no carrier
had been offering an individual health benefit plan:
(a)
If the health benefit plan offered is other than a catastrophic health plan as
defined in RCW 48.43.005, any person enrolled in a pool plan pursuant to
subsection (1)(c) of this section in that county shall no longer be eligible
for coverage under that plan pursuant to subsection (1)(c) of this section, but
may continue to be eligible for pool coverage based upon the results of the
standard health questionnaire designated by the board and administered by the
pool administrator. The pool administrator shall offer to administer the
questionnaire to each person no longer eligible for coverage under subsection
(1)(c) of this section within thirty days of determining that he or she is no
longer eligible.
(b)
Losing eligibility for pool coverage under this subsection (3) does not affect
a person's eligibility for pool coverage under subsection (1)(a), (b), or (d)
of this section; and
(c)
The pool administrator shall provide written notice to any person who is no
longer eligible for coverage under a pool plan under this subsection (3) within
thirty days of the administrator's determination that the person is no longer
eligible. The notice shall: (i) Indicate that coverage under the plan will
cease ninety days from the date that the notice is dated; (ii) describe any
other coverage options, either in or outside of the pool, available to the
person; (iii) describe the procedures for the administration of the standard
health questionnaire to determine the person's continued eligibility for
coverage under subsection (1)(b) of this section; and (iv) describe the
enrollment process for the available options outside of the pool.
Sec.
13. RCW
48.41.110 and 1997 c 231 s 213 are each amended to read as follows:
(1)
The pool ((is authorized to)) shall offer one or more ((managed))
care management plans of coverage. Such plans may, but are not required
to, include point of service features that permit participants to receive
in-network benefits or out-of-network benefits subject to differential cost
shares. Covered persons enrolled in the pool on January 1, ((1997)) 2001,
may continue coverage under the pool plan in which they are enrolled on that
date. However, the pool may incorporate managed care features into such
existing plans.
(2)
The administrator shall prepare a brochure outlining the benefits and
exclusions of the pool policy in plain language. After approval by the board
((of directors)), such brochure shall be made reasonably available to
participants or potential participants.
(3)
The health insurance policy issued by the pool shall pay only ((usual,
customary, and)) reasonable ((charges)) amounts for medically
necessary eligible health care services rendered or furnished for the diagnosis
or treatment of illnesses, injuries, and conditions which are not otherwise
limited or excluded. Eligible expenses are the ((usual, customary, and))
reasonable ((charges)) amounts for the health care services and
items for which benefits are extended under the pool policy. Such benefits
shall at minimum include, but not be limited to, the following services or
related items:
(a)
Hospital services, including charges for the most common semiprivate room, for
the most common private room if semiprivate rooms do not exist in the health
care facility, or for the private room if medically necessary, but limited to a
total of one hundred eighty inpatient days in a calendar year, and limited to
thirty days inpatient care for mental and nervous conditions, or alcohol, drug,
or chemical dependency or abuse per calendar year;
(b)
Professional services including surgery for the treatment of injuries,
illnesses, or conditions, other than dental, which are rendered by a health
care provider, or at the direction of a health care provider, by a staff of
registered or licensed practical nurses, or other health care providers;
(c)
The first twenty outpatient professional visits for the diagnosis or treatment
of one or more mental or nervous conditions or alcohol, drug, or chemical
dependency or abuse rendered during a calendar year by one or more physicians,
psychologists, or community mental health professionals, or, at the direction
of a physician, by other qualified licensed health care practitioners, in the
case of mental or nervous conditions, and rendered by a state certified
chemical dependency program approved under chapter 70.96A RCW, in the case of
alcohol, drug, or chemical dependency or abuse;
(d)
Drugs and contraceptive devices requiring a prescription;
(e)
Services of a skilled nursing facility, excluding custodial and convalescent
care, for not more than one hundred days in a calendar year as prescribed by a
physician;
(f)
Services of a home health agency;
(g)
Chemotherapy, radioisotope, radiation, and nuclear medicine therapy;
(h)
Oxygen;
(i)
Anesthesia services;
(j)
Prostheses, other than dental;
(k)
Durable medical equipment which has no personal use in the absence of the
condition for which prescribed;
(l)
Diagnostic x-rays and laboratory tests;
(m)
Oral surgery limited to the following: Fractures of facial bones; excisions of
mandibular joints, lesions of the mouth, lip, or tongue, tumors, or cysts
excluding treatment for temporomandibular joints; incision of accessory
sinuses, mouth salivary glands or ducts; dislocations of the jaw; plastic
reconstruction or repair of traumatic injuries occurring while covered under the
pool; and excision of impacted wisdom teeth;
(n)
Maternity care services((, as provided in the managed care plan to be
designed by the pool board of directors, and for which no preexisting condition
waiting periods may apply));
(o)
Services of a physical therapist and services of a speech therapist;
(p)
Hospice services;
(q)
Professional ambulance service to the nearest health care facility qualified to
treat the illness or injury; and
(r)
Other medical equipment, services, or supplies required by physician's orders
and medically necessary and consistent with the diagnosis, treatment, and
condition.
(((3)))
(4) The board shall design and employ cost containment measures and
requirements such as, but not limited to, care coordination, provider network
limitations, preadmission certification, and concurrent inpatient review which
may make the pool more cost-effective.
(((4)))
(5) The pool benefit policy may contain benefit limitations, exceptions,
and cost shares such as copayments, coinsurance, and deductibles that are
consistent with managed care products, except that differential cost shares may
be adopted by the board for nonnetwork providers under point of service plans.
The pool benefit policy cost shares and limitations must be consistent with those
that are generally included in health plans approved by the insurance
commissioner; however, no limitation, exception, or reduction may be used that
would exclude coverage for any disease, illness, or injury.
(((5)))
(6) The pool may not reject an individual for health plan coverage based
upon preexisting conditions of the individual or deny, exclude, or otherwise
limit coverage for an individual's preexisting health conditions; except that
it ((may)) shall impose a ((three-month)) six-month
benefit waiting period for preexisting conditions for which medical advice was
given, ((or)) for which a health care provider recommended or provided
treatment, or for which a prudent layperson would have sought advice or
treatment, within ((three)) six months before the effective
date of coverage. The preexisting condition waiting period shall not apply
to prenatal care services. The pool may not avoid the requirements of this
section through the creation of a new rate classification or the modification
of an existing rate classification. Credit against the waiting period shall
be as provided in subsection (7) of this section.
(7)
The pool shall credit any preexisting condition waiting period in its plans for
a person who was enrolled at any time during the sixty-three day period
immediately preceding the date of application for the new pool plan in a group
health benefit plan or an individual health benefit plan other than a
catastrophic health plan. The carrier must credit the period of coverage the
person was continuously covered under the immediately preceding health plan
toward the waiting period of the new health plan. For the purposes of this
subsection, a preceding health plan includes an employer-provided self-funded
health plan.
Sec.
14. RCW
48.41.120 and 1989 c 121 s 8 are each amended to read as follows:
(1)
Subject to the limitation provided in subsection (3) of this section, a pool
policy offered in accordance with ((this chapter)) RCW 48.41.110(3)
shall impose a deductible. Deductibles of five hundred dollars and one
thousand dollars on a per person per calendar year basis shall initially be
offered. The board may authorize deductibles in other amounts. The deductible
shall be applied to the first five hundred dollars, one thousand dollars, or
other authorized amount of eligible expenses incurred by the covered person.
(2)
Subject to the limitations provided in subsection (3) of this section, a
mandatory coinsurance requirement shall be imposed at the rate of twenty
percent of eligible expenses in excess of the mandatory deductible.
(3)
The maximum aggregate out of pocket payments for eligible expenses by the
insured in the form of deductibles and coinsurance under a pool policy
offered in accordance with RCW 48.41.110(3) shall not exceed in a calendar
year:
(a)
One thousand five hundred dollars per individual, or three thousand dollars per
family, per calendar year for the five hundred dollar deductible policy;
(b)
Two thousand five hundred dollars per individual, or five thousand dollars per
family per calendar year for the one thousand dollar deductible policy; or
(c)
An amount authorized by the board for any other deductible policy.
(4)
Eligible expenses incurred by a covered person in the last three months of a
calendar year, and applied toward a deductible, shall also be applied toward
the deductible amount in the next calendar year.
Sec.
15. RCW
48.41.130 and 1997 c 231 s 215 are each amended to read as follows:
All
policy forms issued by the pool shall conform in substance to prototype forms
developed by the pool, and shall in all other respects conform to the
requirements of this chapter, and shall be filed with and approved by the
commissioner before they are issued. ((The pool shall not issue a pool
policy to any individual who, on the effective date of the coverage applied
for, already has or would have coverage substantially equivalent to a pool
policy as an insured or covered dependent, or who would be eligible for such
coverage if he or she elected to obtain it at a lesser premium rate. However,
coverage provided by the basic health plan, as established pursuant to chapter
70.47 RCW, shall not be deemed substantially equivalent for the purposes of
this section.))
Sec.
16. RCW
48.41.140 and 1987 c 431 s 14 are each amended to read as follows:
(1)
Coverage shall provide that health insurance benefits are applicable to
children of the person in whose name the policy is issued including adopted and
newly born natural children. Coverage shall also include necessary care and
treatment of medically diagnosed congenital defects and birth abnormalities.
If payment of a specific premium is required to provide coverage for the child,
the policy may require that notification of the birth or adoption of a child
and payment of the required premium must be furnished to the pool within
thirty-one days after the date of birth or adoption in order to have the
coverage continued beyond the thirty-one day period. For purposes of this
subsection, a child is deemed to be adopted, and benefits are payable, when the
child is physically placed for purposes of adoption under the laws of this
state with the person in whose name the policy is issued; and, when the person
in whose name the policy is issued assumes financial responsibility for the
medical expenses of the child. For purposes of this subsection, "newly
born" means, and benefits are payable, from the moment of birth.
(2)
A pool policy shall provide that coverage of a dependent, unmarried person
shall terminate when the person becomes nineteen years of age: PROVIDED, That
coverage of such person shall not terminate at age nineteen while he or she is
and continues to be both (a) incapable of self-sustaining employment by reason
of developmental disability or physical handicap and (b) chiefly dependent upon
the person in whose name the policy is issued for support and maintenance,
provided proof of such incapacity and dependency is furnished to the pool by
the policyholder within thirty-one days of the dependent's attainment of age
nineteen and subsequently as may be required by the pool but not more
frequently than annually after the two-year period following the dependent's
attainment of age nineteen.
(((3)
A pool policy may contain provisions under which coverage is excluded during a
period of six months following the effective date of coverage as to a given
covered individual for preexisting conditions, as long as medical advice or
treatment was recommended or received within a period of six months before the
effective date of coverage.
These
preexisting condition exclusions shall be waived to the extent to which similar
exclusions have been satisfied under any prior health insurance which was for
any reason other than nonpayment of premium involuntarily terminated, if the
application for pool coverage is made not later than thirty days following the
involuntary termination. In that case, with payment of appropriate premium,
coverage in the pool shall be effective from the date on which the prior
coverage was terminated.))
Sec.
17. RCW
48.41.200 and 1997 c 231 s 214 are each amended to read as follows:
(1)
The pool shall determine the standard risk rate by calculating the average ((group))
individual standard rate ((for groups comprised of up to fifty
persons)) charged for coverage comparable to pool coverage by the
five largest members, measured in terms of individual market enrollment,
offering such coverages in the state ((comparable to the pool
coverage)). In the event five members do not offer comparable coverage,
the standard risk rate shall be established using reasonable actuarial
techniques and shall reflect anticipated experience and expenses for such
coverage in the individual market.
(2)
Subject to subsection (3) of this section, maximum rates for pool coverage
shall be ((one hundred fifty percent for the indemnity health plan and one
hundred twenty-five percent for managed care plans of the rates established as
applicable for group standard risks in groups comprised of up to fifty persons))
as follows:
(a)
Maximum rates for a pool indemnity health plan shall be one hundred fifty
percent of the rate calculated under subsection (1) of this section;
(b)
Maximum rates for a pool care management plan shall be one hundred twenty-five
percent of the rate calculated under subsection (1) of this section; and
(c)
Maximum rates for a person eligible for pool coverage pursuant to RCW
48.41.100(1)(a) who was enrolled at any time during the sixty-three day period
immediately prior to the date of application for pool coverage in a group
health benefit plan or an individual health benefit plan other than a
catastrophic health plan as defined in RCW 48.43.005, where such coverage was
continuous for at least eighteen months, shall be:
(i)
For a pool indemnity health plan, one hundred twenty-five percent of the rate
calculated under subsection (1) of this section; and
(ii)
For a pool care management plan, one hundred ten percent of the rate calculated
under subsection (1) of this section.
(3)(a)
Subject to (b) and (c) of this subsection:
(i)
The rate for any person aged fifty to sixty-four whose current gross family
income is less than two hundred fifty-one percent of the federal poverty level
shall be reduced by thirty percent from what it would otherwise be;
(ii)
The rate for any person aged fifty to sixty-four whose current gross family
income is more than two hundred fifty but less than three hundred one percent
of the federal poverty level shall be reduced by fifteen percent from what it
would otherwise be;
(iii)
The rate for any person who has been enrolled in the pool for more than
thirty-six months shall be reduced by five percent from what it would otherwise
be.
(b)
In no event shall the rate for any person be less than one hundred ten percent
of the rate calculated under subsection (1) of this section.
(c)
Rate reductions under (a)(i) and (ii) of this subsection shall be available
only to the extent that funds are specifically appropriated for this purpose in
the omnibus appropriations act.
Sec.
18. RCW
48.43.005 and 1997 c 231 s 202 and 1997 c 55 s 1 are each reenacted and amended
to read as follows:
Unless
otherwise specifically provided, the definitions in this section apply
throughout this chapter.
(1)
"Adjusted community rate" means the rating method used to establish
the premium for health plans adjusted to reflect actuarially demonstrated
differences in utilization or cost attributable to geographic region, age,
family size, and use of wellness activities.
(2)
"Basic health plan" means the plan described under chapter 70.47 RCW,
as revised from time to time.
(3)
(("Basic health plan model plan" means a health plan as required
in RCW 70.47.060(2)(d).
(4)))
"Basic health plan services" means that schedule of covered health
services, including the description of how those benefits are to be
administered, that are required to be delivered to an enrollee under the basic
health plan, as revised from time to time.
(((5)))
(4) "Catastrophic health plan" means:
(a)
In the case of a contract, agreement, or policy covering a single enrollee, a
health benefit plan requiring a calendar year deductible of, at a minimum, one
thousand five hundred dollars and an annual out-of-pocket expense required to
be paid under the plan (other than for premiums) for covered benefits of at
least three thousand dollars; and
(b)
In the case of a contract, agreement, or policy covering more than one
enrollee, a health benefit plan requiring a calendar year deductible of, at a
minimum, three thousand dollars and an annual out-of-pocket expense required to
be paid under the plan (other than for premiums) for covered benefits of at
least five thousand five hundred dollars; or
(c)
Any health benefit plan that provides benefits for hospital inpatient and
outpatient services, professional and prescription drugs provided in
conjunction with such hospital inpatient and outpatient services, and excludes
or substantially limits outpatient physician services and those services
usually provided in an office setting.
(5)
"Certification" means a determination by a review organization that
an admission, extension of stay, or other health care service or procedure has
been reviewed and, based on the information provided, meets the clinical
requirements for medical necessity, appropriateness, level of care, or
effectiveness under the auspices of the applicable health benefit plan.
(6)
"Concurrent review" means utilization review conducted during a
patient's hospital stay or course of treatment.
(7)
"Covered person" or "enrollee" means a person covered by a
health plan including an enrollee, subscriber, policyholder, beneficiary of a
group plan, or individual covered by any other health plan.
(8)
"Dependent" means, at a minimum, the enrollee's legal spouse and
unmarried dependent children who qualify for coverage under the enrollee's
health benefit plan.
(9)
"Eligible employee" means an employee who works on a full-time basis
with a normal work week of thirty or more hours. The term includes a
self-employed individual, including a sole proprietor, a partner of a
partnership, and may include an independent contractor, if the self-employed
individual, sole proprietor, partner, or independent contractor is included as
an employee under a health benefit plan of a small employer, but does not work
less than thirty hours per week and derives at least seventy-five percent of
his or her income from a trade or business through which he or she has
attempted to earn taxable income and for which he or she has filed the
appropriate internal revenue service form. Persons covered under a health
benefit plan pursuant to the consolidated omnibus budget reconciliation act of
1986 shall not be considered eligible employees for purposes of minimum
participation requirements of chapter 265, Laws of 1995.
(10)
"Emergency medical condition" means the emergent and acute onset of a
symptom or symptoms, including severe pain, that would lead a prudent layperson
acting reasonably to believe that a health condition exists that requires
immediate medical attention, if failure to provide medical attention would
result in serious impairment to bodily functions or serious dysfunction of a
bodily organ or part, or would place the person's health in serious jeopardy.
(11)
"Emergency services" means otherwise covered health care services medically
necessary to evaluate and treat an emergency medical condition, provided in a
hospital emergency department.
(12)
"Enrollee point-of-service cost-sharing" means amounts paid to health
carriers directly providing services, health care providers, or health care
facilities by enrollees and may include copayments, coinsurance, or
deductibles.
(13)
"Grievance" means a written complaint submitted by or on behalf of a
covered person regarding: (a) Denial of payment for medical services or
nonprovision of medical services included in the covered person's health
benefit plan, or (b) service delivery issues other than denial of payment for
medical services or nonprovision of medical services, including dissatisfaction
with medical care, waiting time for medical services, provider or staff
attitude or demeanor, or dissatisfaction with service provided by the health
carrier.
(14)
"Health care facility" or "facility" means hospices
licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW,
rural health care facilities as defined in RCW 70.175.020, psychiatric
hospitals licensed under chapter 71.12 RCW, nursing homes licensed under
chapter 18.51 RCW, community mental health centers licensed under chapter 71.05
or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41
RCW, ambulatory diagnostic, treatment, or surgical facilities licensed under
chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter
70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and
includes such facilities if owned and operated by a political subdivision or
instrumentality of the state and such other facilities as required by federal
law and implementing regulations.
(15)
"Health care provider" or "provider" means:
(a)
A person regulated under Title 18 or chapter 70.127 RCW, to practice health or
health-related services or otherwise practicing health care services in this
state consistent with state law; or
(b)
An employee or agent of a person described in (a) of this subsection, acting in
the course and scope of his or her employment.
(16)
"Health care service" means that service offered or provided by
health care facilities and health care providers relating to the prevention,
cure, or treatment of illness, injury, or disease.
(17)
"Health carrier" or "carrier" means a disability insurer
regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as
defined in RCW 48.44.010, or a health maintenance organization as defined in
RCW 48.46.020.
(18)
"Health plan" or "health benefit plan" means any policy,
contract, or agreement offered by a health carrier to provide, arrange,
reimburse, or pay for health care services except the following:
(a)
Long-term care insurance governed by chapter 48.84 RCW;
(b)
Medicare supplemental health insurance governed by chapter 48.66 RCW;
(c)
Limited health care services offered by limited health care service contractors
in accordance with RCW 48.44.035;
(d)
Disability income;
(e)
Coverage incidental to a property/casualty liability insurance policy such as
automobile personal injury protection coverage and homeowner guest medical;
(f)
Workers' compensation coverage;
(g)
Accident only coverage;
(h)
Specified disease and hospital confinement indemnity when marketed solely as a
supplement to a health plan;
(i)
Employer-sponsored self-funded health plans;
(j)
Dental only and vision only coverage; and
(k)
Plans deemed by the insurance commissioner to have a short-term limited purpose
or duration, or to be a student-only plan that is guaranteed renewable while
the covered person is enrolled as a regular full-time undergraduate or graduate
student at an accredited higher education institution, after a written request
for such classification by the carrier and subsequent written approval by the
insurance commissioner.
(19)
"Material modification" means a change in the actuarial value of the
health plan as modified of more than five percent but less than fifteen
percent.
(20)
(("Open enrollment" means the annual sixty-two day period during
the months of July and August during which every health carrier offering
individual health plan coverage must accept onto individual coverage any state
resident within the carrier's service area regardless of health condition who
submits an application in accordance with RCW 48.43.035(1).
(21)))
"Preexisting condition" means any medical condition, illness, or
injury that existed any time prior to the effective date of coverage.
(((22)))
(21) "Premium" means all sums charged, received, or deposited
by a health carrier as consideration for a health plan or the continuance of a
health plan. Any assessment or any "membership," "policy,"
"contract," "service," or similar fee or charge made by a
health carrier in consideration for a health plan is deemed part of the
premium. "Premium" shall not include amounts paid as enrollee
point-of-service cost-sharing.
(((23)))
(22) "Review organization" means a disability insurer
regulated under chapter 48.20 or 48.21 RCW, health care service contractor as
defined in RCW 48.44.010, or health maintenance organization as defined in RCW
48.46.020, and entities affiliated with, under contract with, or acting on
behalf of a health carrier to perform a utilization review.
(((24)))
(23) "Small employer" or "small group" means
any person, firm, corporation, partnership, association, political subdivision
except school districts, or self-employed individual that is actively engaged
in business that, on at least fifty percent of its working days during the
preceding calendar quarter, employed no more than fifty eligible employees,
with a normal work week of thirty or more hours, the majority of whom were
employed within this state, and is not formed primarily for purposes of buying health
insurance and in which a bona fide employer-employee relationship exists. In
determining the number of eligible employees, companies that are affiliated
companies, or that are eligible to file a combined tax return for purposes of
taxation by this state, shall be considered an employer. Subsequent to the
issuance of a health plan to a small employer and for the purpose of
determining eligibility, the size of a small employer shall be determined
annually. Except as otherwise specifically provided, a small employer shall
continue to be considered a small employer until the plan anniversary following
the date the small employer no longer meets the requirements of this
definition. The term "small employer" includes a self-employed
individual or sole proprietor. The term "small employer" also
includes a self-employed individual or sole proprietor who derives at least
seventy-five percent of his or her income from a trade or business through
which the individual or sole proprietor has attempted to earn taxable income
and for which he or she has filed the appropriate internal revenue service form
1040, schedule C or F, for the previous taxable year.
(((25)))
(24) "Utilization review" means the prospective, concurrent,
or retrospective assessment of the necessity and appropriateness of the
allocation of health care resources and services of a provider or facility,
given or proposed to be given to an enrollee or group of enrollees.
(((26)))
(25) "Wellness activity" means an explicit program of an
activity consistent with department of health guidelines, such as, smoking
cessation, injury and accident prevention, reduction of alcohol misuse,
appropriate weight reduction, exercise, automobile and motorcycle safety, blood
cholesterol reduction, and nutrition education for the purpose of improving
enrollee health status and reducing health service costs.
NEW
SECTION. Sec. 19. A
new section is added to chapter 48.43 RCW to read as follows:
(1)
No carrier may reject an individual for an individual health benefit plan based
upon preexisting conditions of the individual except as provided in section 21
of this act.
(2)
No carrier may deny, exclude, or otherwise limit coverage for an individual's
preexisting health conditions except as provided in this section.
(3)
For an individual health benefit plan originally issued on or after the
effective date of this section preexisting condition waiting periods imposed
upon a person enrolling in an individual health benefit plan shall be no more
than nine months for a preexisting condition for which medical advice was
given, for which a health care provider recommended or provided treatment, or
for which a prudent layperson would have sought advice or treatment, within six
months prior to the effective date of the plan.
(4)
Individual health benefit plan preexisting condition waiting periods shall not
apply to prenatal care services.
(5)
No carrier may avoid the requirements of this section through the creation of a
new rate classification or the modification of an existing rate
classification. A new or changed rate classification will be deemed an attempt
to avoid the provisions of this section if the new or changed classification would
substantially discourage applications for coverage from individuals who are
higher than average health risks. These provisions apply only to individuals
who are Washington residents.
Sec.
20. RCW
48.43.015 and 1995 c 265 s 5 are each amended to read as follows:
(1)
For a health benefit plan offered to a group other than a small group, every
health carrier shall ((waive)) reduce any preexisting condition
exclusion or limitation for persons or groups who had similar health coverage
under a different health plan at any time during the three-month period
immediately preceding the date of application for the new health plan if such
person was continuously covered under the immediately preceding health plan.
If the person was continuously covered for at least three months under the
immediately preceding health plan, the carrier may not impose a waiting period
for coverage of preexisting conditions. If the person was continuously covered
for less than three months under the immediately preceding health plan, the
carrier must credit any waiting period under the immediately preceding health
plan toward the new health plan. For the purposes of this subsection, a
preceding health plan includes an employer provided self-funded health plan and
plans of the Washington state health insurance pool.
(2)
For a health benefit plan offered to a small group, every health carrier
shall reduce any preexisting condition exclusion or limitation for persons or
groups who had similar health coverage under a different health plan at any
time during the three-month period immediately preceding the date of
application for the new health plan if such person was continuously covered
under the immediately preceding health plan. If the person was continuously
covered for at least nine months under the immediately preceding health plan,
the carrier may not impose a waiting period for coverage of preexisting
conditions. If the person was continuously covered for less than nine months
under the immediately preceding health plan, the carrier must credit any
waiting period under the immediately preceding health plan toward the new
health plan. For the purposes of this subsection, a preceding health plan
includes an employer provided self-funded health plan and plans of the
Washington state health insurance pool.
(3)
For a health benefit plan offered to an individual, every health carrier shall
credit any preexisting condition waiting period in that plan for a person who
was enrolled at any time during the sixty-three day period immediately
preceding the date of application for the new health plan in a group health
benefit plan or an individual health benefit plan, other than a catastrophic
health plan, and (a) the benefits under the previous plan provide equivalent or
greater overall benefit coverage than that provided in the health benefit plan
the individual seeks to purchase; or (b) the person is seeking an individual
health benefit plan due to his or her change of residence from one geographic
area in Washington state to another geographic area in Washington state where
his or her current health plan is not offered; or (c) The person is seeking an
individual health benefit plan: (i) Because a health care provider with whom
he or she has an established care relationship and from whom he or she has
received treatment within the past twelve months is no longer part of the
carrier's provider network under his or her existing Washington individual
health benefit plan; and (ii) his or her health care provider is part of
another carrier's provider network; and (iii) application for a health benefit
plan under that carrier's provider network individual coverage is made within
ninety days of his or her provider leaving the previous carrier's provider
network. The carrier must credit the period of coverage the person was
continuously covered under the immediately preceding health plan toward the
waiting period of the new health plan. For the purposes of this subsection
(3), a preceding health plan includes an employer-provided self-funded health
plan and plans of the Washington state health insurance pool.
(4)
Subject to the provisions of subsections (1) through (3) of this
section, nothing contained in this section requires a health carrier to amend a
health plan to provide new benefits in its existing health plans. In addition,
nothing in this section requires a carrier to waive benefit limitations not
related to an individual or group's preexisting conditions or health history.
NEW
SECTION. Sec. 21. A
new section is added to chapter 48.43 RCW to read as follows:
(1)
Except as provided in (a) and (b) of this subsection, a health carrier may
require any person applying for an individual health benefit plan to complete
the standard health questionnaire designated under chapter 48.41 RCW.
(a)
If a person is seeking an individual health benefit plan due to his or her
change of residence from one geographic area in Washington state to another
geographic area in Washington state where his or her current health plan is not
offered, completion of the standard health questionnaire shall not be a
condition of coverage if application for coverage is made within ninety days of
relocation.
(b)
If a person is seeking an individual health benefit plan:
(i)
Because a health care provider with whom he or she has an established care
relationship and from whom he or she has received treatment within the past
twelve months is no longer part of the carrier's provider network under his or
her existing Washington individual health benefit plan; and
(ii)
His or her health care provider is part of another carrier's provider network;
and
(iii)
Application for a health benefit plan under that carrier's provider network
individual coverage is made within ninety days of his or her provider leaving
the previous carrier's provider network; then completion of the standard health
questionnaire shall not be a condition of coverage.
(2)
If, based upon the results of the standard health questionnaire, the person
qualifies for coverage under the Washington state health insurance pool, the
following shall apply:
(a)
The carrier may decide not to accept the person's application for enrollment in
its individual health benefit plan; and
(b)
Within fifteen business days of receipt of a completed application, the carrier
shall provide written notice of the decision not to accept the person's
application for enrollment to both the person and the administrator of the
Washington state health insurance pool. The notice to the person shall state
that the person is eligible for health insurance provided by the Washington
state health insurance pool, and shall include information about the Washington
state health insurance pool and an application for such coverage.
(3)
If the person applying for an individual health benefit plan: (a) Does not
qualify for coverage under the Washington state health insurance pool based
upon the results of the standard health questionnaire; (b) does qualify for
coverage under the Washington state health insurance pool based upon the
results of the standard health questionnaire and the carrier elects to accept
the person for enrollment; or (c) is not required to complete the standard
health questionnaire designated under this chapter under subsection (1)(a) or
(b) of this section, the carrier shall accept the person for enrollment if he
or she resides within the carrier's service area and provide or assure the
provision of all covered services regardless of age, sex, family structure, ethnicity,
race, health condition, geographic location, employment status, socioeconomic
status, other condition or situation, or the provisions of RCW 49.60.174(2).
The commissioner may grant a temporary exemption from this subsection if, upon
application by a health carrier, the commissioner finds that the clinical,
financial, or administrative capacity to serve existing enrollees will be
impaired if a health carrier is required to continue enrollment of additional
eligible individuals.
NEW
SECTION. Sec. 22. A
new section is added to chapter 48.43 RCW to read as follows:
Except
as otherwise required by statute or rule, a carrier and the Washington state
health insurance pool, and persons acting at the direction of or on behalf of a
carrier or the pool, who are in receipt of an enrollee's or applicant's
personally identifiable health information included in the standard health
questionnaire shall not disclose the identifiable health information unless
such disclosure is explicitly authorized in writing by the person who is the
subject of the information.
Sec.
23. RCW
48.43.025 and 1995 c 265 s 6 are each amended to read as follows:
(1)
For group health benefit plans for groups other than small groups, no
carrier may reject an individual for health plan coverage based upon
preexisting conditions of the individual and no carrier may deny, exclude, or
otherwise limit coverage for an individual's preexisting health conditions;
except that a carrier may impose a three-month benefit waiting period for
preexisting conditions for which medical advice was given, or for which a
health care provider recommended or provided treatment, or for which a
prudent layperson would have sought advice or treatment, within three
months before the effective date of coverage. Any preexisting condition
waiting period or limitation relating to pregnancy as a preexisting condition
shall be imposed only to the extent allowed in the federal health insurance
portability and accountability act of 1996.
(2)
For group health benefit plans for small groups, no carrier may reject an
individual for health plan coverage based upon preexisting conditions of the
individual and no carrier may deny, exclude, or otherwise limit coverage for an
individual's preexisting health conditions. Except that a carrier may impose a
nine-month benefit waiting period for preexisting conditions for which medical
advice was given, or for which a health care provider recommended or provided
treatment, or for which a prudent layperson would have sought advice or
treatment, within six months before the effective date of coverage. Any
preexisting condition waiting period or limitation relating to pregnancy as a
preexisting condition shall be imposed only to the extent allowed in the
federal health insurance portability and accountability act of 1996.
(3)
No carrier may avoid the requirements of this section through the creation of a
new rate classification or the modification of an existing rate classification.
A new or changed rate classification will be deemed an attempt to avoid the
provisions of this section if the new or changed classification would
substantially discourage applications for coverage from individuals or groups
who are higher than average health risks. These provisions apply only to
individuals who are Washington residents.
Sec.
24. RCW
48.43.035 and 1995 c 265 s 7 are each amended to read as follows:
For
group health benefit plans, the following shall apply:
(1)
All health carriers shall accept for enrollment any state resident within
the group to whom the plan is offered and within the carrier's service area
and provide or assure the provision of all covered services regardless of age,
sex, family structure, ethnicity, race, health condition, geographic location,
employment status, socioeconomic status, other condition or situation, or the
provisions of RCW 49.60.174(2). The insurance commissioner may grant a
temporary exemption from this subsection, if, upon application by a health
carrier the commissioner finds that the clinical, financial, or administrative
capacity to serve existing enrollees will be impaired if a health carrier is
required to continue enrollment of additional eligible individuals.
(2)
Except as provided in subsection (5) of this section, all health plans shall
contain or incorporate by endorsement a guarantee of the continuity of coverage
of the plan. For the purposes of this section, a plan is "renewed"
when it is continued beyond the earliest date upon which, at the carrier's sole
option, the plan could have been terminated for other than nonpayment of
premium. ((In the case of group plans,)) The carrier may
consider the group's anniversary date as the renewal date for purposes of complying
with the provisions of this section.
(3)
The guarantee of continuity of coverage required in health plans shall not
prevent a carrier from canceling or nonrenewing a health plan for:
(a)
Nonpayment of premium;
(b)
Violation of published policies of the carrier approved by the insurance
commissioner;
(c)
Covered persons entitled to become eligible for medicare benefits by reason of
age who fail to apply for a medicare supplement plan or medicare cost, risk, or
other plan offered by the carrier pursuant to federal laws and regulations;
(d)
Covered persons who fail to pay any deductible or copayment amount owed to the
carrier and not the provider of health care services;
(e)
Covered persons committing fraudulent acts as to the carrier;
(f)
Covered persons who materially breach the health plan; or
(g)
Change or implementation of federal or state laws that no longer permit the
continued offering of such coverage.
(4)
The provisions of this section do not apply in the following cases:
(a)
A carrier has zero enrollment on a product; or
(b)
A carrier replaces a product and the replacement product is provided to all
covered persons within that class or line of business, includes all of the
services covered under the replaced product, and does not significantly limit
access to the kind of services covered under the replaced product. The health
plan may also allow unrestricted conversion to a fully comparable product; or
(c)
A carrier is withdrawing from a service area or from a segment of its service
area because the carrier has demonstrated to the insurance commissioner that
the carrier's clinical, financial, or administrative capacity to serve
enrollees would be exceeded.
(5)
The provisions of this section do not apply to health plans deemed by the
insurance commissioner to be unique or limited or have a short-term purpose,
after a written request for such classification by the carrier and subsequent
written approval by the insurance commissioner.
NEW
SECTION. Sec. 25. A
new section is added to chapter 48.43 RCW to read as follows:
(1)
Except as provided in subsection (4) of this section, all individual health
plans shall contain or incorporate by endorsement a guarantee of the continuity
of coverage of the plan. For the purposes of this section, a plan is
"renewed" when it is continued beyond the earliest date upon which,
at the carrier's sole option, the plan could have been terminated for other
than nonpayment of premium.
(2)
The guarantee of continuity of coverage required in individual health plans
shall not prevent a carrier from canceling or nonrenewing a health plan for:
(a)
Nonpayment of premium;
(b)
Violation of published policies of the carrier approved by the commissioner;
(c)
Covered persons entitled to become eligible for medicare benefits by reason of
age who fail to apply for a medicare supplement plan or medicare cost, risk, or
other plan offered by the carrier pursuant to federal laws and regulations;
(d)
Covered persons who fail to pay any deductible or copayment amount owed to the
carrier and not the provider of health care services;
(e)
Covered persons committing fraudulent acts as to the carrier;
(f)
Covered persons who materially breach the health plan; or
(g)
Change or implementation of federal or state laws that no longer permit the
continued offering of such coverage.
(3)
This section does not apply in the following cases:
(a)
A carrier has zero enrollment on a product;
(b)
A carrier is withdrawing from a service area or from a segment of its service
area because the carrier has demonstrated to the commissioner that the
carrier's clinical, financial, or administrative capacity to serve enrollees
would be exceeded;
(c)
No sooner than the first day of the month following the expiration of a one
hundred eighty-day period beginning on the effective date of this section, a
carrier discontinues offering a particular type of health benefit plan offered
in the individual market if: (i) The carrier provides notice to each covered
individual provided coverage of this type of such discontinuation at least
ninety days prior to the date of the discontinuation; (ii) the carrier offers
to each individual provided coverage of this type the option, without being
subject to the standard health questionnaire, to enroll in any other individual
health benefit plan currently being offered by the carrier; and (iii) in
exercising the option to discontinue coverage of this type and in offering the
option of coverage under (c)(ii) of this subsection, the carrier acts uniformly
without regard to any health status-related factor of enrolled individuals or
individuals who may become eligible for such coverage; or
(d)
A carrier discontinues offering all individual health coverage in the state and
discontinues coverage under all existing individual health benefit plans if:
(i) The carrier provides notice to the commissioner of its intent to
discontinue offering all individual health coverage in the state and its intent
to discontinue coverage under all existing health benefit plans at least one
hundred eighty days prior to the date of the discontinuation of coverage under
all existing health benefit plans; and (ii) the carrier provides notice to each
covered individual of the intent to discontinue his or her existing health
benefit plan at least one hundred eighty days prior to the date of such
discontinuation. In the case of discontinuation under this subsection, the
carrier may not issue any individual health coverage in this state for a
five-year period beginning on the date of the discontinuation of the last
health plan not so renewed. Nothing in this subsection (3) shall be construed
to require a carrier to provide notice to the commissioner of its intent to
discontinue offering a health benefit plan to new applicants where the carrier
does not discontinue coverage of existing enrollees under that health benefit
plan.
(4)
The provisions of this section do not apply to health plans deemed by the
commissioner to be unique or limited or have a short-term purpose, after a
written request for such classification by the carrier and subsequent written
approval by the commissioner.
NEW
SECTION. Sec. 26. A
new section is added to chapter 48.43 RCW to read as follows:
(1)
All individual health benefit plans, other than catastrophic health plans,
offered or renewed on or after the effective date of this section, shall
include benefits described in this section. Nothing in this section shall be
construed to require a carrier to offer an individual health benefit plan.
(a)
Maternity services that include, with no enrollee cost-sharing requirements
beyond those generally applicable cost-sharing requirements: Diagnosis of
pregnancy; prenatal care; delivery; care for complications of pregnancy;
physician services; hospital services; operating or other special procedure
rooms; radiology and laboratory services; appropriate medications; anesthesia;
and services required under RCW 48.43.115; and
(b)
Prescription drug benefits with at least a two thousand dollar benefit payable
by the carrier annually.
(2)
If a carrier offers a health benefit plan that is not a catastrophic health
plan to groups, and it chooses to offer a health benefit plan to individuals,
it must offer at least one health benefit plan to individuals that is not a
catastrophic health plan.
NEW
SECTION. Sec. 27. A
new section is added to chapter 48.46 RCW to read as follows:
Notwithstanding
the provisions of this chapter, a health maintenance organization may offer
catastrophic health plans as defined in RCW 48.43.005.
Sec.
28. RCW
48.44.020 and 1990 c 120 s 5 are each amended to read as follows:
(1)
Any health care service contractor may enter into contracts with or for the
benefit of persons or groups of persons which require prepayment for health
care services by or for such persons in consideration of such health care
service contractor providing one or more health care services to such persons
and such activity shall not be subject to the laws relating to insurance if the
health care services are rendered by the health care service contractor or by a
participating provider.
(2)
The commissioner may on examination, subject to the right of the health care
service contractor to demand and receive a hearing under chapters 48.04 and
34.05 RCW, disapprove any individual or group contract form for any of
the following grounds:
(a)
If it contains or incorporates by reference any inconsistent, ambiguous or
misleading clauses, or exceptions and conditions which unreasonably or
deceptively affect the risk purported to be assumed in the general coverage of
the contract; or
(b)
If it has any title, heading, or other indication of its provisions
which is misleading; or
(c)
If purchase of health care services thereunder is being solicited by deceptive
advertising; or
(d)
((If, the benefits provided therein are unreasonable in relation to the
amount charged for the contract;
(e))) If
it contains unreasonable restrictions on the treatment of patients; or
(((f)))
(e) If it violates any provision of this chapter; or
(((g)))
(f) If it fails to conform to minimum provisions or standards required
by regulation made by the commissioner pursuant to chapter 34.05 RCW; or
(((h)))
(g) If any contract for health care services with any state agency,
division, subdivision, board, or commission or with any political
subdivision, municipal corporation, or quasi-municipal corporation fails to
comply with state law.
(3)
In addition to the grounds listed in subsection (2) of this section, the
commissioner may disapprove any group contract if the benefits provided therein
are unreasonable in relation to the amount charged for the contract.
(4)(a)
Every contract between a health care service contractor and a participating
provider of health care services shall be in writing and shall state that in
the event the health care service contractor fails to pay for health care services
as provided in the contract, the enrolled participant shall not be liable to
the provider for sums owed by the health care service contractor. Every such
contract shall provide that this requirement shall survive termination of the
contract.
(b)
No participating provider, agent, trustee, or assignee may maintain any
action against an enrolled participant to collect sums owed by the health care
service contractor.
NEW
SECTION. Sec. 29. A
new section is added to chapter 48.44 RCW to read as follows:
(1)
The definitions in this subsection apply throughout this section unless the
context clearly requires otherwise.
(a)
"Claims" means the cost to the health care service contractor of
health care services, as defined in RCW 48.43.005, provided to a contract
holder or paid to or on behalf of a contract holder in accordance with the
terms of a health benefit plan, as defined in RCW 48.43.005. This includes
capitation payments or other similar payments made to providers for the purpose
of paying for health care services for an enrollee.
(b)
"Claims reserves" means: (i) The liability for claims which have
been reported but not paid; (ii) the liability for claims which have not been
reported but which may reasonably be expected; (iii) active life reserves; and
(iv) additional claims reserves whether for a specific liability purpose or
not.
(c)
"Earned premiums" means premiums, as defined in RCW 48.43.005, plus
any rate credits or recoupments less any refunds, for the applicable period,
whether received before, during, or after the applicable period.
(d)
"Incurred claims expense" means claims paid during the applicable
period plus any increase, or less any decrease, in the claims reserves.
(e)
"Loss ratio" means incurred claims expense as a percentage of earned
premiums.
(f)
"Reserves" means: (i) Active life reserves; and (ii) additional
reserves whether for a specific liability purpose or not.
(2)
A health care service contractor shall file, for informational purposes only, a
notice of its schedule of rates for its individual contracts with the
commissioner prior to use.
(3)
A health care service contractor shall file with the notice required under
subsection (2) of this section supporting documentation of its method of
determining the rates charged. The commissioner may request only the following
supporting documentation:
(a)
A description of the health care service contractor's rate-making methodology;
(b)
An actuarially determined estimate of incurred claims which includes the
experience data, assumptions, and justifications of the health care service
contractor's projection;
(c)
The percentage of premium attributable in aggregate for nonclaims expenses used
to determine the adjusted community rates charged; and
(d)
A certification by a member of the American academy of actuaries, or other
person approved by the commissioner, that the adjusted community rate charged
can be reasonably expected to result in a loss ratio that meets or exceeds the
loss ratio standard established in subsection (7) of this section.
(4)
The commissioner may not disapprove or otherwise impede the implementation of
the filed rates.
(5)
By the last day of May each year any health care service contractor providing
individual health benefit plans in this state shall file for review by the
commissioner supporting documentation of its actual loss ratio for its
individual health benefit plans offered in this state in aggregate for the
preceding calendar year. The filing shall include a certification by a member
of the American academy of actuaries, or other person approved by the
commissioner, that the actual loss ratio has been calculated in accordance with
accepted actuarial principles.
(a)
At the expiration of a thirty-day period beginning with the date the filing is
delivered to the commissioner, the filing shall be deemed approved unless prior
thereto the commissioner contests the calculation of the actual loss ratio.
(b)
If the commissioner contests the calculation of the actual loss ratio, the
commissioner shall state in writing the grounds for contesting the calculation
to the health care service contractor.
(c)
Any dispute regarding the calculation of the actual loss ratio shall upon
written demand of either the commissioner or the health care service contractor
be submitted to hearing under chapters 48.04 and 34.05 RCW.
(6)
If the actual loss ratio for the preceding calendar year is less than the loss
ratio standard established in subsection (7) of this section, a remittance is
due and the following shall apply:
(a)
The health care service contractor shall calculate a percentage of premium to
be remitted to the Washington state health insurance pool by subtracting the
actual loss ratio for the preceding year from the loss ratio established in
subsection (7) of this section.
(b)
The remittance to the Washington state health insurance pool is the percentage
calculated in (a) of this subsection, multiplied by the premium earned from
each enrollee in the previous calendar year. Interest shall be added to the
remittance due at a five percent annual rate calculated from the end of the
calendar year for which the remittance is due to the date the remittance is
made.
(c)
All remittances shall be aggregated and such amounts shall be remitted to the
Washington state high risk pool to be used as directed by the pool board of
directors.
(d)
Any remittance required to be issued under this section shall be issued within
thirty days after the actual loss ratio is deemed approved under subsection
(5)(a) of this section or the determination by an administrative law judge
under subsection (5)(c) of this section.
(7) The loss ratio applicable to this section shall be seventy-four
percent minus the premium tax rate applicable to the health care service
contractor's individual health benefit plans under RCW 48.14.0201.
Sec.
30. RCW
48.44.022 and 1997 c 231 s 208 are each amended to read as follows:
(1)(((a)
A health care service contractor offering any health benefit plan to any
individual shall offer and actively market to all individuals a health benefit
plan providing benefits identical to the schedule of covered health benefits
that are required to be delivered to an individual enrolled in the basic health
plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in
this subsection shall preclude a contractor from offering, or an individual
from purchasing, other health benefit plans that may have more or less
comprehensive benefits than the basic health plan, provided such plans are in
accordance with this chapter. A contractor offering a health benefit plan that
does not include benefits provided in the basic health plan shall clearly disclose
these differences to the individual in a brochure approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290,
48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340,
48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the
health benefit plan is the mandatory offering under (a) of this subsection that
provides benefits identical to the basic health plan, to the extent these
requirements differ from the basic health plan.
(2)))
Premium rates for health benefit plans for individuals shall be subject to the
following provisions:
(a)
The health care service contractor shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age;
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The health care service contractor shall be permitted to develop separate rates
for individuals age sixty-five or older for coverage for which medicare is the
primary payer and coverage for which medicare is not the primary payer. Both
rates shall be subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(((3)))
(2) Adjusted community rates established under this section shall pool
the medical experience of all individuals purchasing coverage, and shall not be
required to be pooled with the medical experience of health benefit plans
offered to small employers under RCW 48.44.023.
(((4)))
(3) As used in this section and RCW 48.44.023 "health benefit
plan," "small employer," (("basic health plan,"))
"adjusted community rates," and "wellness activities" mean
the same as defined in RCW 48.43.005.
Sec.
31. RCW
48.46.060 and 1989 c 10 s 10 are each amended to read as follows:
(1)
Any health maintenance organization may enter into agreements with or for the
benefit of persons or groups of persons, which require prepayment for health
care services by or for such persons in consideration of the health maintenance
organization providing health care services to such persons. Such activity is
not subject to the laws relating to insurance if the health care services are
rendered directly by the health maintenance organization or by any provider
which has a contract or other arrangement with the health maintenance
organization to render health services to enrolled participants.
(2)
All forms of health maintenance agreements issued by the organization to
enrolled participants or other marketing documents purporting to describe the
organization's comprehensive health care services shall comply with such
minimum standards as the commissioner deems reasonable and necessary in order
to carry out the purposes and provisions of this chapter, and which fully
inform enrolled participants of the health care services to which they are
entitled, including any limitations or exclusions thereof, and such other
rights, responsibilities and duties required of the contracting health
maintenance organization.
(3)
Subject to the right of the health maintenance organization to demand and
receive a hearing under chapters 48.04 and 34.05 RCW, the commissioner may
disapprove an individual or group agreement form for any of the
following grounds:
(a)
If it contains or incorporates by reference any inconsistent, ambiguous, or
misleading clauses, or exceptions or conditions which unreasonably or
deceptively affect the risk purported to be assumed in the general coverage of
the agreement;
(b)
If it has any title, heading, or other indication which is misleading;
(c)
If purchase of health care services thereunder is being solicited by deceptive
advertising;
(d)
((If the benefits provided therein are unreasonable in relation to the
amount charged for the agreement;
(e))) If
it contains unreasonable restrictions on the treatment of patients;
(((f)))
(e) If it is in any respect in violation of this chapter or if it fails
to conform to minimum provisions or standards required by the commissioner by
rule under chapter 34.05 RCW; or
(((g)))
(f) If any agreement for health care services with any state agency,
division, subdivision, board, or commission or with any political
subdivision, municipal corporation, or quasi-municipal corporation fails to
comply with state law.
(4)
In addition to the grounds listed in subsection (2) of this section, the
commissioner may disapprove any group agreement if the benefits provided
therein are unreasonable in relation to the amount charged for the agreement.
(5)
No health maintenance organization authorized under this chapter shall cancel
or fail to renew the enrollment on any basis of an enrolled participant or
refuse to transfer an enrolled participant from a group to an individual basis
for reasons relating solely to age, sex, race, or health status((: PROVIDED
HOWEVER, That)). Nothing contained herein shall prevent
cancellation of an agreement with enrolled participants (a) who violate any
published policies of the organization which have been approved by the
commissioner, or (b) who are entitled to become eligible for medicare benefits
and fail to enroll for a medicare supplement plan offered by the health
maintenance organization and approved by the commissioner, or (c) for failure
of such enrolled participant to pay the approved charge, including
cost-sharing, required under such contract, or (d) for a material breach of the
health maintenance agreement.
(((5)))
(6) No agreement form or amendment to an approved agreement form shall
be used unless it is first filed with the commissioner.
NEW
SECTION. Sec. 32. A
new section is added to chapter 48.46 RCW to read as follows:
(1)
The definitions in this subsection apply throughout this section unless the
context clearly requires otherwise.
(a)
"Claims" means the cost to the health maintenance organization of
health care services, as defined in RCW 48.43.005, provided to an enrollee or
paid to or on behalf of the enrollee in accordance with the terms of a health
benefit plan, as defined in RCW 48.43.005. This includes capitation payments
or other similar payments made to providers for the purpose of paying for
health care services for an enrollee.
(b)
"Claims reserves" means: (i) The liability for claims which have
been reported but not paid; (ii) the liability for claims which have not been
reported but which may reasonably be expected; (iii) active life reserves; and
(iv) additional claims reserves whether for a specific liability purpose or
not.
(c)
"Earned premiums" means premiums, as defined in RCW 48.43.005, plus
any rate credits or recoupments less any refunds, for the applicable period,
whether received before, during, or after the applicable period.
(d)
"Incurred claims expense" means claims paid during the applicable
period plus any increase, or less any decrease, in the claims reserves.
(e)
"Loss ratio" means incurred claims expense as a percentage of earned
premiums.
(f)
"Reserves" means: (i) Active life reserves; and (ii) additional
reserves whether for a specific liability purpose or not.
(2)
A health maintenance organization shall file, for informational purposes only,
a notice of its schedule of rates for its individual agreements with the
commissioner prior to use.
(3)
A health maintenance organization shall file with the notice required under
subsection (2) of this section supporting documentation of its method of
determining the rates charged. The commissioner may request only the following
supporting documentation:
(a)
A description of the health maintenance organization's rate-making methodology;
(b)
An actuarially determined estimate of incurred claims which includes the
experience data, assumptions, and justifications of the health maintenance
organization's projection;
(c)
The percentage of premium attributable in aggregate for nonclaims expenses used
to determine the adjusted community rates charged; and
(d)
A certification by a member of the American academy of actuaries, or other
person approved by the commissioner, that the adjusted community rate charged
can be reasonably expected to result in a loss ratio that meets or exceeds the
loss ratio standard established in subsection (7) of this section.
(4)
The commissioner may not disapprove or otherwise impede the implementation of
the filed rates.
(5)
By the last day of May each year any health maintenance organization providing
individual health benefit plans in this state shall file for review by the
commissioner supporting documentation of its actual loss ratio for its
individual health benefit plans offered in the state in aggregate for the
preceding calendar year. The filing shall include a certification by a member
of the American academy of actuaries, or other person approved by the
commissioner, that the actual loss ratio has been calculated in accordance with
accepted actuarial principles.
(a)
At the expiration of a thirty-day period beginning with the date the filing is
delivered to the commissioner, the filing shall be deemed approved unless prior
thereto the commissioner contests the calculation of the actual loss ratio.
(b)
If the commissioner contests the calculation of the actual loss ratio, the
commissioner shall state in writing the grounds for contesting the calculation
to the health maintenance organization.
(c)
Any dispute regarding the calculation of the actual loss ratio shall, upon
written demand of either the commissioner or the health maintenance
organization, be submitted to hearing under chapters 48.04 and 34.05 RCW.
(6)
If the actual loss ratio for the preceding calendar year is less than the loss
ratio standard established in subsection (7) of this section, a remittance is
due and the following shall apply:
(a)
The health maintenance organization shall calculate a percentage of premium to
be remitted to the Washington state health insurance pool by subtracting the
actual loss ratio for the preceding year from the loss ratio established in
subsection (7) of this section.
(b)
The remittance to the Washington state health insurance pool is the percentage
calculated in (a) of this subsection, multiplied by the premium earned from
each enrollee in the previous calendar year. Interest shall be added to the
remittance due at a five percent annual rate calculated from the end of the
calendar year for which the remittance is due to the date the remittance is
made.
(c)
All remittances shall be aggregated and such amounts shall be remitted to the
Washington state high risk pool to be used as directed by the pool board of
directors.
(d)
Any remittance required to be issued under this section shall be issued within
thirty days after the actual loss ratio is deemed approved under subsection
(5)(a) of this section or the determination by an administrative law judge
under subsection (5)(c) of this section.
(7)
The loss ratio applicable to this section shall be seventy-four percent minus
the premium tax rate applicable to the health maintenance organization's
individual health benefit plans under RCW 48.14.0201.
Sec.
33. RCW
48.46.064 and 1997 c 231 s 209 are each amended to read as follows:
(1)(((a)
A health maintenance organization offering any health benefit plan to any
individual shall offer and actively market to all individuals a health benefit
plan providing benefits identical to the schedule of covered health benefits
that are required to be delivered to an individual enrolled in the basic health
plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in
this subsection shall preclude a health maintenance organization from offering,
or an individual from purchasing, other health benefit plans that may have more
or less comprehensive benefits than the basic health plan, provided such plans
are in accordance with this chapter. A health maintenance organization
offering a health benefit plan that does not include benefits provided in the
basic health plan shall clearly disclose these differences to the individual in
a brochure approved by the commissioner.
(b)
A health benefit plan shall provide coverage for hospital expenses and services
rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not
subject to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.290,
48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520,
and 48.46.530 if the health benefit plan is the mandatory offering under (a) of
this subsection that provides benefits identical to the basic health plan, to
the extent these requirements differ from the basic health plan.
(2)))
Premium rates for health benefit plans for individuals shall be subject to the
following provisions:
(a)
The health maintenance organization shall develop its rates based on an
adjusted community rate and may only vary the adjusted community rate for:
(i)
Geographic area;
(ii)
Family size;
(iii)
Age;
(iv)
Tenure discounts; and
(v)
Wellness activities.
(b)
The adjustment for age in (a)(iii) of this subsection may not use age brackets
smaller than five-year increments which shall begin with age twenty and end
with age sixty-five. Individuals under the age of twenty shall be treated as
those age twenty.
(c)
The health maintenance organization shall be permitted to develop separate
rates for individuals age sixty-five or older for coverage for which medicare
is the primary payer and coverage for which medicare is not the primary payer.
Both rates shall be subject to the requirements of this subsection.
(d)
The permitted rates for any age group shall be no more than four hundred
twenty-five percent of the lowest rate for all age groups on January 1, 1996,
four hundred percent on January 1, 1997, and three hundred seventy-five percent
on January 1, 2000, and thereafter.
(e)
A discount for wellness activities shall be permitted to reflect actuarially
justified differences in utilization or cost attributed to such programs not to
exceed twenty percent.
(f)
The rate charged for a health benefit plan offered under this section may not
be adjusted more frequently than annually except that the premium may be
changed to reflect:
(i)
Changes to the family composition;
(ii)
Changes to the health benefit plan requested by the individual; or
(iii)
Changes in government requirements affecting the health benefit plan.
(g)
For the purposes of this section, a health benefit plan that contains a
restricted network provision shall not be considered similar coverage to a
health benefit plan that does not contain such a provision, provided that the
restrictions of benefits to network providers result in substantial differences
in claims costs. This subsection does not restrict or enhance the portability
of benefits as provided in RCW 48.43.015.
(h)
A tenure discount for continuous enrollment in the health plan of two years or
more may be offered, not to exceed ten percent.
(((3)))
(2) Adjusted community rates established under this section shall pool
the medical experience of all individuals purchasing coverage, and shall not be
required to be pooled with the medical experience of health benefit plans
offered to small employers under RCW 48.46.066.
(((4)))
(3) As used in this section and RCW 48.46.066, "health benefit
plan," (("basic health plan,")) "adjusted community
rate," "small employer," and "wellness activities"
mean the same as defined in RCW 48.43.005.
Sec.
34. RCW
70.47.060 and 1998 c 314 s 17 and 1998 c 148 s 1 are each reenacted and amended
to read as follows:
The
administrator has the following powers and duties:
(1)
To design and from time to time revise a schedule of covered basic health care
services, including physician services, inpatient and outpatient hospital
services, prescription drugs and medications, and other services that may be
necessary for basic health care. In addition, the administrator may, to the
extent that funds are available, offer as basic health plan services chemical
dependency services, mental health services and organ transplant services;
however, no one service or any combination of these three services shall
increase the actuarial value of the basic health plan benefits by more than
five percent excluding inflation, as determined by the office of financial
management. All subsidized and nonsubsidized enrollees in any participating
managed health care system under the Washington basic health plan shall be
entitled to receive covered basic health care services in return for premium
payments to the plan. The schedule of services shall emphasize proven
preventive and primary health care and shall include all services necessary for
prenatal, postnatal, and well-child care. However, with respect to coverage
for ((groups of)) subsidized enrollees who are eligible to receive
prenatal and postnatal services through the medical assistance program under
chapter 74.09 RCW, the administrator shall not contract for such services
except to the extent that such services are necessary over not more than a
one-month period in order to maintain continuity of care after diagnosis of
pregnancy by the managed care provider. The schedule of services shall also
include a separate schedule of basic health care services for children, eighteen
years of age and younger, for those subsidized or nonsubsidized enrollees who
choose to secure basic coverage through the plan only for their dependent
children. In designing and revising the schedule of services, the
administrator shall consider the guidelines for assessing health services under
the mandated benefits act of 1984, RCW 48.47.030, and such other factors as the
administrator deems appropriate.
((However,
with respect to coverage for subsidized enrollees who are eligible to receive
prenatal and postnatal services through the medical assistance program under
chapter 74.09 RCW, the administrator shall not contract for such services
except to the extent that the services are necessary over not more than a
one-month period in order to maintain continuity of care after diagnosis of
pregnancy by the managed care provider.))
(2)(a)
To design and implement a structure of periodic premiums due the administrator
from subsidized enrollees that is based upon gross family income, giving
appropriate consideration to family size and the ages of all family members.
The enrollment of children shall not require the enrollment of their parent or
parents who are eligible for the plan. The structure of periodic premiums
shall be applied to subsidized enrollees entering the plan as individuals
pursuant to subsection (9) of this section and to the share of the cost of the
plan due from subsidized enrollees entering the plan as employees pursuant to
subsection (10) of this section.
(b)
To determine the periodic premiums due the administrator from nonsubsidized
enrollees. Premiums due from nonsubsidized enrollees shall be in an amount
equal to the cost charged by the managed health care system provider to the
state for the plan plus the administrative cost of providing the plan to those
enrollees and the premium tax under RCW 48.14.0201.
(c)
An employer or other financial sponsor may, with the prior approval of the
administrator, pay the premium, rate, or any other amount on behalf of a
subsidized or nonsubsidized enrollee, by arrangement with the enrollee and
through a mechanism acceptable to the administrator.
(((d)
To develop, as an offering by every health carrier providing coverage identical
to the basic health plan, as configured on January 1, 1996, a basic health plan
model plan with uniformity in enrollee cost-sharing requirements.))
(3)
To design and implement a structure of enrollee cost-sharing due a
managed health care system from subsidized and nonsubsidized enrollees. The
structure shall discourage inappropriate enrollee utilization of health care
services, and may utilize copayments, deductibles, and other cost-sharing
mechanisms, but shall not be so costly to enrollees as to constitute a barrier
to appropriate utilization of necessary health care services.
(4)
To limit enrollment of persons who qualify for subsidies so as to prevent an
overexpenditure of appropriations for such purposes. Whenever the
administrator finds that there is danger of such an overexpenditure, the
administrator shall close enrollment until the administrator finds the danger
no longer exists.
(5)
To limit the payment of subsidies to subsidized enrollees, as defined in RCW
70.47.020. The level of subsidy provided to persons who qualify may be based
on the lowest cost plans, as defined by the administrator.
(6)
To adopt a schedule for the orderly development of the delivery of services and
availability of the plan to residents of the state, subject to the limitations
contained in RCW 70.47.080 or any act appropriating funds for the plan.
(7)
To solicit and accept applications from managed health care systems, as defined
in this chapter, for inclusion as eligible basic health care providers under
the plan for either subsidized enrollees, or nonsubsidized enrollees, or
both. The administrator shall endeavor to assure that covered basic health
care services are available to any enrollee of the plan from among a selection
of two or more participating managed health care systems. In adopting any
rules or procedures applicable to managed health care systems and in its
dealings with such systems, the administrator shall consider and make suitable
allowance for the need for health care services and the differences in local
availability of health care resources, along with other resources, within and
among the several areas of the state. Contracts with participating managed
health care systems shall ensure that basic health plan enrollees who become
eligible for medical assistance may, at their option, continue to receive
services from their existing providers within the managed health care system if
such providers have entered into provider agreements with the department of
social and health services.
(8)
To receive periodic premiums from or on behalf of subsidized and nonsubsidized
enrollees, deposit them in the basic health plan operating account, keep
records of enrollee status, and authorize periodic payments to managed health
care systems on the basis of the number of enrollees participating in the
respective managed health care systems.
(9)
To accept applications from individuals residing in areas served by the plan,
on behalf of themselves and their spouses and dependent children, for
enrollment in the Washington basic health plan as subsidized or nonsubsidized
enrollees, to establish appropriate minimum-enrollment periods for enrollees as
may be necessary, and to determine, upon application and on a reasonable
schedule defined by the authority, or at the request of any enrollee,
eligibility due to current gross family income for sliding scale premiums.
Funds received by a family as part of participation in the adoption support
program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall
not be counted toward a family's current gross family income for the purposes
of this chapter. When an enrollee fails to report income or income changes accurately,
the administrator shall have the authority either to bill the enrollee for the
amounts overpaid by the state or to impose civil penalties of up to two hundred
percent of the amount of subsidy overpaid due to the enrollee incorrectly
reporting income. The administrator shall adopt rules to define the
appropriate application of these sanctions and the processes to implement the
sanctions provided in this subsection, within available resources. No subsidy
may be paid with respect to any enrollee whose current gross family income
exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a
recipient of medical assistance or medical care services under chapter 74.09
RCW. If a number of enrollees drop their enrollment for no apparent good
cause, the administrator may establish appropriate rules or requirements that
are applicable to such individuals before they will be allowed to reenroll in
the plan.
(10)
To accept applications from business owners on behalf of themselves and their employees,
spouses, and dependent children, as subsidized or nonsubsidized enrollees, who
reside in an area served by the plan. The administrator may require all or the
substantial majority of the eligible employees of such businesses to enroll in
the plan and establish those procedures necessary to facilitate the orderly
enrollment of groups in the plan and into a managed health care system. The
administrator may require that a business owner pay at least an amount equal to
what the employee pays after the state pays its portion of the subsidized
premium cost of the plan on behalf of each employee enrolled in the plan.
Enrollment is limited to those not eligible for medicare who wish to enroll in
the plan and choose to obtain the basic health care coverage and services from
a managed care system participating in the plan. The administrator shall
adjust the amount determined to be due on behalf of or from all such enrollees
whenever the amount negotiated by the administrator with the participating
managed health care system or systems is modified or the administrative cost of
providing the plan to such enrollees changes.
(11)
To determine the rate to be paid to each participating managed health care
system in return for the provision of covered basic health care services to
enrollees in the system. Although the schedule of covered basic health care
services will be the same or actuarially equivalent for similar
enrollees, the rates negotiated with participating managed health care systems
may vary among the systems. In negotiating rates with participating systems,
the administrator shall consider the characteristics of the populations served
by the respective systems, economic circumstances of the local area, the need
to conserve the resources of the basic health plan trust account, and other
factors the administrator finds relevant.
(12)
To monitor the provision of covered services to enrollees by participating
managed health care systems in order to assure enrollee access to good quality
basic health care, to require periodic data reports concerning the utilization
of health care services rendered to enrollees in order to provide adequate
information for evaluation, and to inspect the books and records of
participating managed health care systems to assure compliance with the
purposes of this chapter. In requiring reports from participating managed
health care systems, including data on services rendered enrollees, the
administrator shall endeavor to minimize costs, both to the managed health care
systems and to the plan. The administrator shall coordinate any such reporting
requirements with other state agencies, such as the insurance commissioner and
the department of health, to minimize duplication of effort.
(13)
To evaluate the effects this chapter has on private employer-based health care
coverage and to take appropriate measures consistent with state and federal
statutes that will discourage the reduction of such coverage in the state.
(14)
To develop a program of proven preventive health measures and to integrate it
into the plan wherever possible and consistent with this chapter.
(15)
To provide, consistent with available funding, assistance for rural residents,
underserved populations, and persons of color.
(16)
In consultation with appropriate state and local government agencies, to
establish criteria defining eligibility for persons confined or residing in
government-operated institutions.
(17)
To administer the premium discounts provided under RCW 48.41.200(3)(a) (i) and
(ii) pursuant to a contract with the Washington state health insurance pool.
Sec.
35. RCW
70.47.100 and 1987 1st ex.s. c 5 s 12 are each amended to read as follows:
(1)
A managed health care ((systems)) system participating in the
plan shall do so by contract with the administrator and shall provide, directly
or by contract with other health care providers, covered basic health care
services to each enrollee covered by its contract with the administrator
as long as payments from the administrator on behalf of the enrollee are
current. A participating managed health care system may offer, without
additional cost, health care benefits or services not included in the schedule
of covered services under the plan. A participating managed health care system
shall not give preference in enrollment to enrollees who accept such additional
health care benefits or services. Managed health care systems participating in
the plan shall not discriminate against any potential or current enrollee based
upon health status, sex, race, ethnicity, or religion. The administrator may
receive and act upon complaints from enrollees regarding failure to provide
covered services or efforts to obtain payment, other than authorized
copayments, for covered services directly from enrollees, but nothing in this
chapter empowers the administrator to impose any sanctions under Title 18 RCW
or any other professional or facility licensing statute.
(2)
The plan shall allow, at least annually, an opportunity for enrollees to transfer
their enrollments among participating managed health care systems serving their
respective areas. The administrator shall establish a period of at least
twenty days in a given year when this opportunity is afforded enrollees, and in
those areas served by more than one participating managed health care system
the administrator shall endeavor to establish a uniform period for such
opportunity. The plan shall allow enrollees to transfer their enrollment to
another participating managed health care system at any time upon a showing of
good cause for the transfer.
((Any
contract between a hospital and a participating managed health care system
under this chapter is subject to the requirements of RCW 70.39.140(1) regarding
negotiated rates.))
(3)
Prior to negotiating with any managed health care system, the administrator
shall determine, on an actuarially sound basis, the reasonable cost of
providing the schedule of basic health care services, expressed in terms of
upper and lower limits, and recognizing variations in the cost of providing the
services through the various systems and in different areas of the state.
(4)
In negotiating with managed health care systems for participation in the plan,
the administrator shall adopt a uniform procedure that includes at least the
following:
(((1)))
(a) The administrator shall issue a request for proposals, including
standards regarding the quality of services to be provided; financial integrity
of the responding systems; and responsiveness to the unmet health care needs of
the local communities or populations that may be served;
(((2)))
(b) The administrator shall then review responsive proposals and may
negotiate with respondents to the extent necessary to refine any proposals;
(((3)))
(c) The administrator may then select one or more systems to provide the
covered services within a local area; and
(((4)))
(d) The administrator may adopt a policy that gives preference to
respondents, such as nonprofit community health clinics, that have a history of
providing quality health care services to low-income persons.
(5)
The administrator may contract with a managed health care system to provide
covered basic health care services to either subsidized enrollees, or
nonsubsidized enrollees, or both.
(6)
The administrator may establish procedures and policies to further negotiate
and contract with managed health care systems following completion of the
request for proposal process in subsection (4) of this section, upon a
determination by the administrator that it is necessary to provide access, as
defined in the request for proposal documents, to covered basic health care
services for enrollees.
(7)(a)
The administrator shall implement a self-funded or self-insured method of
providing insurance coverage to subsidized enrollees, as provided under RCW
41.05.140, if one of the following conditions is met:
(i)
The authority determines that no managed health care system other than the
authority is willing and able to provide access, as defined in the request for
proposal documents, to covered basic health care services for all subsidized
enrollees in an area; or
(ii)
The authority determines that no other managed health care system is willing to
provide access, as defined in the request for proposal documents, for one
hundred thirty-three percent of the state-wide benchmark price or less, and the
authority is able to offer such coverage at a price that is less than the
lowest price at which any other managed health care system is willing to
provide such access in an area.
(b)
The authority shall initiate steps to provide the coverage described in (a) of
this subsection within ninety days of making its determination that the
conditions for providing a self-funded or self-insured method of providing
insurance have been met.
(c)
The administrator may not implement a self-funded or self-insured method of
providing insurance in an area unless the administrator has received a
certification from a member of the American academy of actuaries that the
funding available in the basic health plan self-insurance reserve account is
sufficient for the self-funded or self-insured risk assumed, or expected to be
assumed, by the administrator.
NEW
SECTION. Sec. 36. A
new section is added to chapter 48.41 RCW to read as follows:
The
Washington state health insurance pool account is created in the custody of the
state treasurer. All receipts from moneys specifically appropriated to the
account must be deposited in the account. Expenditures from this account shall
be used to cover deficits incurred by the Washington state health insurance
pool under this chapter in excess of the threshold established in this
section. To the extent funds are available in the account, funds shall be
expended from the account to offset that portion of the deficit that would
otherwise have to be recovered by imposing an assessment on members in excess
of a threshold of seventy cents per insured person per month. The commissioner
shall authorize expenditures from the account, to the extent that funds are
available in the account, upon certification by the pool board that assessments
will exceed the threshold level established in this section. The account is
subject to the allotment procedures under chapter 43.88 RCW, but an
appropriation is not required for expenditures.
Sec.
37. RCW
43.84.092 and 1999 c 380 s 8, 1999 c 309 s 928, 1999 c 268 s 4, and 1999 c 94 s
2 are each reenacted and amended to read as follows:
(1)
All earnings of investments of surplus balances in the state treasury shall be
deposited to the treasury income account, which account is hereby established
in the state treasury.
(2)
The treasury income account shall be utilized to pay or receive funds
associated with federal programs as required by the federal cash management
improvement act of 1990. The treasury income account is subject in all
respects to chapter 43.88 RCW, but no appropriation is required for refunds or
allocations of interest earnings required by the cash management improvement
act. Refunds of interest to the federal treasury required under the cash
management improvement act fall under RCW 43.88.180 and shall not require
appropriation. The office of financial management shall determine the amounts
due to or from the federal government pursuant to the cash management
improvement act. The office of financial management may direct transfers of
funds between accounts as deemed necessary to implement the provisions of the
cash management improvement act, and this subsection. Refunds or allocations
shall occur prior to the distributions of earnings set forth in subsection (4)
of this section.
(3)
Except for the provisions of RCW 43.84.160, the treasury income account may be
utilized for the payment of purchased banking services on behalf of treasury
funds including, but not limited to, depository, safekeeping, and disbursement
functions for the state treasury and affected state agencies. The treasury
income account is subject in all respects to chapter 43.88 RCW, but no
appropriation is required for payments to financial institutions. Payments
shall occur prior to distribution of earnings set forth in subsection (4) of
this section.
(4)
Monthly, the state treasurer shall distribute the earnings credited to the
treasury income account. The state treasurer shall credit the general fund
with all the earnings credited to the treasury income account except:
(a)
The following accounts and funds shall receive their proportionate share of
earnings based upon each account's and fund's average daily balance for the
period: The capitol building construction account, the Cedar River channel
construction and operation account, the Central Washington University capital
projects account, the charitable, educational, penal and reformatory
institutions account, the common school construction fund, the county criminal
justice assistance account, the county sales and use tax equalization account,
the data processing building construction account, the deferred compensation
administrative account, the deferred compensation principal account, the
department of retirement systems expense account, the drinking water assistance
account, the Eastern Washington University capital projects account, the
education construction fund, the emergency reserve fund, the federal forest
revolving account, the health services account, the public health services
account, the health system capacity account, the personal health services
account, the state higher education construction account, the higher education
construction account, the highway infrastructure account, the industrial
insurance premium refund account, the judges' retirement account, the judicial
retirement administrative account, the judicial retirement principal account,
the local leasehold excise tax account, the local real estate excise tax
account, the local sales and use tax account, the medical aid account, the
mobile home park relocation fund, the municipal criminal justice assistance
account, the municipal sales and use tax equalization account, the natural resources
deposit account, the perpetual surveillance and maintenance account, the public
employees' retirement system plan 1 account, the public employees' retirement
system plan 2 account, the Puyallup tribal settlement account, the resource
management cost account, the site closure account, the special wildlife
account, the state employees' insurance account, the state employees' insurance
reserve account, the state investment board expense account, the state
investment board commingled trust fund accounts, the supplemental pension
account, the teachers' retirement system plan 1 account, the teachers'
retirement system plan 2 account, the tobacco prevention and control account,
the tobacco settlement account, the transportation infrastructure account, the
tuition recovery trust fund, the University of Washington bond retirement fund,
the University of Washington building account, the volunteer fire fighters' and
reserve officers' relief and pension principal ((account)) fund,
the volunteer fire fighters' ((relief and pension)) and reserve
officers' administrative ((account)) fund, the Washington
judicial retirement system account, the Washington law enforcement officers'
and fire fighters' system plan 1 retirement account, the Washington law
enforcement officers' and fire fighters' system plan 2 retirement account, the
Washington state health insurance pool account, the Washington state patrol
retirement account, the Washington State University building account, the
Washington State University bond retirement fund, the water pollution control
revolving fund, and the Western Washington University capital projects
account. Earnings derived from investing balances of the agricultural
permanent fund, the normal school permanent fund, the permanent common school fund,
the scientific permanent fund, and the state university permanent fund shall be
allocated to their respective beneficiary accounts. All earnings to be
distributed under this subsection (4)(a) shall first be reduced by the
allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
(b)
The following accounts and funds shall receive eighty percent of their
proportionate share of earnings based upon each account's or fund's average
daily balance for the period: The aeronautics account, the aircraft search and
rescue account, the county arterial preservation account, the department of
licensing services account, the essential rail assistance account, the ferry
bond retirement fund, the grade crossing protective fund, the high capacity transportation
account, the highway bond retirement fund, the highway safety account, the
marine operating fund, the motor vehicle fund, the motorcycle safety education
account, the pilotage account, the public transportation systems account, the
Puget Sound capital construction account, the Puget Sound ferry operations
account, the recreational vehicle account, the rural arterial trust account,
the safety and education account, the special category C account, the state
patrol highway account, the transportation equipment fund, the transportation
fund, the transportation improvement account, the transportation improvement
board bond retirement account, and the urban arterial trust account.
(5)
In conformance with Article II, section 37 of the state Constitution, no
treasury accounts or funds shall be allocated earnings without the specific
affirmative directive of this section.
Sec.
38. RCW
43.84.092 and 1999 c 380 s 8, 1999 c 309 s 928, 1999 c 268 s 4, 1999 c 94 s 3,
and 1999 c 94 s 2 are each reenacted and amended to read as follows:
(1)
All earnings of investments of surplus balances in the state treasury shall be
deposited to the treasury income account, which account is hereby established
in the state treasury.
(2)
The treasury income account shall be utilized to pay or receive funds
associated with federal programs as required by the federal cash management
improvement act of 1990. The treasury income account is subject in all
respects to chapter 43.88 RCW, but no appropriation is required for refunds or
allocations of interest earnings required by the cash management improvement
act. Refunds of interest to the federal treasury required under the cash
management improvement act fall under RCW 43.88.180 and shall not require
appropriation. The office of financial management shall determine the amounts
due to or from the federal government pursuant to the cash management improvement
act. The office of financial management may direct transfers of funds between
accounts as deemed necessary to implement the provisions of the cash management
improvement act, and this subsection. Refunds or allocations shall occur prior
to the distributions of earnings set forth in subsection (4) of this section.
(3)
Except for the provisions of RCW 43.84.160, the treasury income account may be
utilized for the payment of purchased banking services on behalf of treasury
funds including, but not limited to, depository, safekeeping, and disbursement
functions for the state treasury and affected state agencies. The treasury
income account is subject in all respects to chapter 43.88 RCW, but no
appropriation is required for payments to financial institutions. Payments
shall occur prior to distribution of earnings set forth in subsection (4) of
this section.
(4)
Monthly, the state treasurer shall distribute the earnings credited to the
treasury income account. The state treasurer shall credit the general fund
with all the earnings credited to the treasury income account except:
(a)
The following accounts and funds shall receive their proportionate share of
earnings based upon each account's and fund's average daily balance for the
period: The capitol building construction account, the Cedar River channel
construction and operation account, the Central Washington University capital
projects account, the charitable, educational, penal and reformatory
institutions account, the common school construction fund, the county criminal
justice assistance account, the county sales and use tax equalization account,
the data processing building construction account, the deferred compensation
administrative account, the deferred compensation principal account, the department
of retirement systems expense account, the drinking water assistance account,
the Eastern Washington University capital projects account, the education
construction fund, the emergency reserve fund, the federal forest revolving
account, the health services account, the public health services account, the
health system capacity account, the personal health services account, the state
higher education construction account, the higher education construction
account, the highway infrastructure account, the industrial insurance premium
refund account, the judges' retirement account, the judicial retirement
administrative account, the judicial retirement principal account, the local
leasehold excise tax account, the local real estate excise tax account, the
local sales and use tax account, the medical aid account, the mobile home park
relocation fund, the municipal criminal justice assistance account, the
municipal sales and use tax equalization account, the natural resources deposit
account, the perpetual surveillance and maintenance account, the public
employees' retirement system plan 1 account, the public employees' retirement
system plan 2 account, the Puyallup tribal settlement account, the resource
management cost account, the site closure account, the special wildlife
account, the state employees' insurance account, the state employees' insurance
reserve account, the state investment board expense account, the state
investment board commingled trust fund accounts, the supplemental pension
account, the teachers' retirement system plan 1 account, the teachers'
retirement system plan 2 account, the tobacco prevention and control account,
the tobacco settlement account, the transportation infrastructure account, the
tuition recovery trust fund, the University of Washington bond retirement fund,
the University of Washington building account, the volunteer fire fighters' and
reserve officers' relief and pension principal ((account)) fund,
the volunteer fire fighters' ((relief and pension)) and reserve
officers' administrative ((account)) fund, the Washington
judicial retirement system account, the Washington law enforcement officers'
and fire fighters' system plan 1 retirement account, the Washington law
enforcement officers' and fire fighters' system plan 2 retirement account, the
Washington state health insurance pool account, the Washington state patrol
retirement account, the Washington State University building account, the
Washington State University bond retirement fund, the water pollution control
revolving fund, and the Western Washington University capital projects
account. Earnings derived from investing balances of the agricultural
permanent fund, the normal school permanent fund, the permanent common school
fund, the scientific permanent fund, and the state university permanent fund
shall be allocated to their respective beneficiary accounts. All earnings to
be distributed under this subsection (4)(a) shall first be reduced by the
allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
(b)
The following accounts and funds shall receive eighty percent of their
proportionate share of earnings based upon each account's or fund's average
daily balance for the period: The aeronautics account, the aircraft search and
rescue account, the county arterial preservation account, the department of
licensing services account, the essential rail assistance account, the ferry
bond retirement fund, the grade crossing protective fund, the high capacity
transportation account, the highway bond retirement fund, the highway safety
account, the motor vehicle fund, the motorcycle safety education account, the
pilotage account, the public transportation systems account, the Puget Sound
capital construction account, the Puget Sound ferry operations account, the
recreational vehicle account, the rural arterial trust account, the safety and
education account, the special category C account, the state patrol highway
account, the transportation equipment fund, the transportation fund, the
transportation improvement account, the transportation improvement board bond
retirement account, and the urban arterial trust account.
(5)
In conformance with Article II, section 37 of the state Constitution, no
treasury accounts or funds shall be allocated earnings without the specific
affirmative directive of this section.
Sec.
39. RCW
43.84.092 and 1999 c 380 s 9, 1999 c 309 s 929, 1999 c 268 s 5, and 1999 c 94 s
4 are each reenacted and amended to read as follows:
(1)
All earnings of investments of surplus balances in the state treasury shall be
deposited to the treasury income account, which account is hereby established
in the state treasury.
(2)
The treasury income account shall be utilized to pay or receive funds
associated with federal programs as required by the federal cash management
improvement act of 1990. The treasury income account is subject in all
respects to chapter 43.88 RCW, but no appropriation is required for refunds or
allocations of interest earnings required by the cash management improvement
act. Refunds of interest to the federal treasury required under the cash
management improvement act fall under RCW 43.88.180 and shall not require
appropriation. The office of financial management shall determine the amounts
due to or from the federal government pursuant to the cash management
improvement act. The office of financial management may direct transfers of
funds between accounts as deemed necessary to implement the provisions of the
cash management improvement act, and this subsection. Refunds or allocations
shall occur prior to the distributions of earnings set forth in subsection (4)
of this section.
(3)
Except for the provisions of RCW 43.84.160, the treasury income account may be
utilized for the payment of purchased banking services on behalf of treasury
funds including, but not limited to, depository, safekeeping, and disbursement
functions for the state treasury and affected state agencies. The treasury
income account is subject in all respects to chapter 43.88 RCW, but no
appropriation is required for payments to financial institutions. Payments
shall occur prior to distribution of earnings set forth in subsection (4) of
this section.
(4)
Monthly, the state treasurer shall distribute the earnings credited to the
treasury income account. The state treasurer shall credit the general fund
with all the earnings credited to the treasury income account except:
(a)
The following accounts and funds shall receive their proportionate share of
earnings based upon each account's and fund's average daily balance for the
period: The capitol building construction account, the Cedar River channel
construction and operation account, the Central Washington University capital
projects account, the charitable, educational, penal and reformatory
institutions account, the common school construction fund, the county criminal
justice assistance account, the county sales and use tax equalization account,
the data processing building construction account, the deferred compensation administrative
account, the deferred compensation principal account, the department of
retirement systems expense account, the drinking water assistance account, the
Eastern Washington University capital projects account, the education
construction fund, the emergency reserve fund, the federal forest revolving
account, the health services account, the public health services account, the
health system capacity account, the personal health services account, the state
higher education construction account, the higher education construction
account, the highway infrastructure account, the industrial insurance premium
refund account, the judges' retirement account, the judicial retirement
administrative account, the judicial retirement principal account, the local leasehold
excise tax account, the local real estate excise tax account, the local sales
and use tax account, the medical aid account, the mobile home park relocation
fund, the municipal criminal justice assistance account, the municipal sales
and use tax equalization account, the natural resources deposit account, the
perpetual surveillance and maintenance account, the public employees'
retirement system plan 1 account, the public employees' retirement system plan
2 account, the Puyallup tribal settlement account, the resource management cost
account, the site closure account, the special wildlife account, the state
employees' insurance account, the state employees' insurance reserve account,
the state investment board expense account, the state investment board
commingled trust fund accounts, the supplemental pension account, the teachers'
retirement system plan 1 account, the teachers' retirement system combined plan
2 and plan 3 account, the tobacco prevention and control account, the tobacco
settlement account, the transportation infrastructure account, the tuition
recovery trust fund, the University of Washington bond retirement fund, the
University of Washington building account, the volunteer fire fighters' and
reserve officers' relief and pension principal ((account)) fund,
the volunteer fire fighters' ((relief and pension)) and reserve
officers' administrative ((account)) fund, the Washington
judicial retirement system account, the Washington law enforcement officers'
and fire fighters' system plan 1 retirement account, the Washington law
enforcement officers' and fire fighters' system plan 2 retirement account, the
Washington school employees' retirement system combined plan 2 and 3 account, the
Washington state health insurance pool account, the Washington state patrol
retirement account, the Washington State University building account, the
Washington State University bond retirement fund, the water pollution control
revolving fund, and the Western Washington University capital projects account.
Earnings derived from investing balances of the agricultural permanent fund,
the normal school permanent fund, the permanent common school fund, the
scientific permanent fund, and the state university permanent fund shall be
allocated to their respective beneficiary accounts. All earnings to be
distributed under this subsection (4)(a) shall first be reduced by the
allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
(b)
The following accounts and funds shall receive eighty percent of their
proportionate share of earnings based upon each account's or fund's average
daily balance for the period: The aeronautics account, the aircraft search and
rescue account, the county arterial preservation account, the department of
licensing services account, the essential rail assistance account, the ferry
bond retirement fund, the grade crossing protective fund, the high capacity
transportation account, the highway bond retirement fund, the highway safety
account, the motor vehicle fund, the motorcycle safety education account, the
pilotage account, the public transportation systems account, the Puget Sound
capital construction account, the Puget Sound ferry operations account, the
recreational vehicle account, the rural arterial trust account, the safety and
education account, the special category C account, the state patrol highway
account, the transportation equipment fund, the transportation fund, the
transportation improvement account, the transportation improvement board bond
retirement account, and the urban arterial trust account.
(5)
In conformance with Article II, section 37 of the state Constitution, no
treasury accounts or funds shall be allocated earnings without the specific
affirmative directive of this section.
NEW
SECTION. Sec. 40. A
new section is added to chapter 48.01 RCW to read as follows:
(1)
Except as required in RCW 48.21.045, 48.44.023, and 48.46.066, nothing in this
title shall be construed to require a carrier, as defined in RCW 48.43.005, to
offer any health benefit plan for sale.
(2)
Nothing in this title shall prohibit a carrier as defined in RCW 48.43.005 from
ceasing sale of any or all health benefit plans to new applicants if the closed
plans are closed to all new applicants.
(3)
This section is intended to clarify, and not modify, existing law.
NEW
SECTION. Sec. 41. (1)
The task force on health care reinsurance is created, and is composed of seven
members, including: Three members appointed by the governor, one of whom shall
be the chair of the Washington state health insurance pool; two members of the
senate, one member of each party caucus appointed by the president of the
senate; and two members of the house of representatives, one member of each
party caucus appointed by the co-speakers of the house of representatives. The
chair shall be elected by the task force from among its members.
(2)
The task force shall:
(a)
Monitor the provisions of this act regarding its effect on:
(i)
Carrier participation in the individual market, especially in areas where
coverage is currently minimal or not available;
(ii)
Affordability and availability of private health plan coverage;
(iii)
Washington state health insurance pool operations;
(iv)
The Washington basic health plan operations;
(v)
The cost of the Washington state insurance pool;
(vi)
Premium affordability in the individual and small group market;
(vii)
The ability of consumers to purchase, renew, and change their health insurance
coverage;
(viii)
The availability of coverage for medical benefits such as, but not limited to,
maternity and prescription drugs in the individual market; and
(ix)
The number of uninsured people in the state of Washington;
(b)
After studying the feasibility of reinsurance as a method of health insurance
market stability, if appropriate, develop a reinsurance system implementation
plan; and
(c)
Seek participation from interested parties, including but not limited to
consumer, carriers, health care providers, health care purchasers, and
insurance brokers and agents, in an effective manner.
(3)
In the conduct of its business, the task force shall have access to all health
data available by statute to health-related state agencies and may, to the
extent that funds are available, purchase necessary analytical and staff
support.
(4)
Task force members will receive no compensation for their service.
(5)
The task force shall submit an interim report to the governor and the
legislature in December 2000 and December 2001, and a final report no later
than December 1, 2002.
(6)
The task force expires December 31, 2002.
Sec.
42. RCW
70.47.010 and 1993 c 492 s 208 are each amended to read as follows:
(1)(a)
The legislature finds that limitations on access to health care services for
enrollees in the state, such as in rural and underserved areas, are
particularly challenging for the basic health plan. Statutory restrictions
have reduced the options available to the administrator to address the access
needs of basic health plan enrollees. It is the intent of the legislature to
authorize the administrator to develop alternative purchasing strategies to
ensure access to basic health plan enrollees in all areas of the state,
including: (i) The use of differential rating for managed health care systems
based on geographic differences in costs; and (ii) limited use of
self-insurance in areas where adequate access cannot be assured through other
options.
(b)
In developing alternative purchasing strategies to address health care access
needs, the administrator shall consult with interested persons including health
carriers, health care providers, and health facilities, and with other
appropriate state agencies including the office of the insurance commissioner
and the office of community and rural health. In pursuing such alternatives,
the administrator shall continue to give priority to prepaid managed care as
the preferred method of assuring access to basic health plan enrollees followed,
in priority order, by preferred providers, fee for service, and self-funding.
(2)
The legislature further finds that:
(a)
A significant percentage of the population of this state does not have
reasonably available insurance or other coverage of the costs of necessary
basic health care services;
(b)
This lack of basic health care coverage is detrimental to the health of the
individuals lacking coverage and to the public welfare, and results in
substantial expenditures for emergency and remedial health care, often at the
expense of health care providers, health care facilities, and all purchasers of
health care, including the state; and
(c)
The use of managed health care systems has significant potential to reduce the
growth of health care costs incurred by the people of this state generally, and
by low-income pregnant women, and at-risk children and adolescents who need
greater access to managed health care.
(((2)))
(3) The purpose of this chapter is to provide or make more readily
available necessary basic health care services in an appropriate setting to
working persons and others who lack coverage, at a cost to these persons that
does not create barriers to the utilization of necessary health care services.
To that end, this chapter establishes a program to be made available to those
residents not eligible for medicare who share in a portion of the cost or who
pay the full cost of receiving basic health care services from a managed health
care system.
(((3)))
(4) It is not the intent of this chapter to provide health care services
for those persons who are presently covered through private employer-based
health plans, nor to replace employer-based health plans. However, the
legislature recognizes that cost-effective and affordable health plans may not
always be available to small business employers. Further, it is the intent of
the legislature to expand, wherever possible, the availability of private
health care coverage and to discourage the decline of employer-based coverage.
(((4)))
(5)(a) It is the purpose of this chapter to acknowledge the initial
success of this program that has (i) assisted thousands of families in their
search for affordable health care; (ii) demonstrated that low-income, uninsured
families are willing to pay for their own health care coverage to the extent of
their ability to pay; and (iii) proved that local health care providers are
willing to enter into a public-private partnership as a managed care system.
(b)
As a consequence, the legislature intends to extend an option to enroll to
certain citizens above two hundred percent of the federal poverty guidelines
within the state who reside in communities where the plan is operational and
who collectively or individually wish to exercise the opportunity to purchase
health care coverage through the basic health plan if the purchase is done at
no cost to the state. It is also the intent of the legislature to allow
employers and other financial sponsors to financially assist such individuals to
purchase health care through the program so long as such purchase does not
result in a lower standard of coverage for employees.
(c)
The legislature intends that, to the extent of available funds, the program be
available throughout Washington state to subsidized and nonsubsidized
enrollees. It is also the intent of the legislature to enroll subsidized
enrollees first, to the maximum extent feasible.
(d)
The legislature directs that the basic health plan administrator identify
enrollees who are likely to be eligible for medical assistance and assist these
individuals in applying for and receiving medical assistance. The
administrator and the department of social and health services shall implement
a seamless system to coordinate eligibility determinations and benefit coverage
for enrollees of the basic health plan and medical assistance recipients.
Sec.
43. RCW
70.47.020 and 1997 c 335 s 1 are each amended to read as follows:
As
used in this chapter:
(1)
"Washington basic health plan" or "plan" means the system
of enrollment and payment ((on a prepaid capitated basis)) for basic
health care services, administered by the plan administrator through
participating managed health care systems, created by this chapter.
(2)
"Administrator" means the Washington basic health plan administrator,
who also holds the position of administrator of the Washington state health
care authority.
(3)
"Managed health care system" means: (a) Any health care
organization, including health care providers, insurers, health care service
contractors, health maintenance organizations, or any combination thereof, that
provides directly or by contract basic health care services, as defined by the
administrator and rendered by duly licensed providers, ((on a prepaid
capitated basis)) to a defined patient population enrolled in the plan and
in the managed health care system; or (b) a self-funded or self-insured
method of providing insurance coverage to subsidized enrollees provided under
RCW 41.05.140 and subject to the limitations under RCW 70.47.100(7).
(4)
"Subsidized enrollee" means an individual, or an individual plus the
individual's spouse or dependent children: (a) Who is not eligible for
medicare; (b) who is not confined or residing in a government-operated
institution, unless he or she meets eligibility criteria adopted by the
administrator; (c) who resides in an area of the state served by a managed
health care system participating in the plan; (d) whose gross family income at
the time of enrollment does not exceed ((twice)) two hundred percent
of the federal poverty level as adjusted for family size and determined
annually by the federal department of health and human services; and (e) who
chooses to obtain basic health care coverage from a particular managed health
care system in return for periodic payments to the plan. To the extent that
state funds are specifically appropriated for this purpose, with a
corresponding federal match, "subsidized enrollee" also means an
individual, or an individual's spouse or dependent children, who meets the
requirements in (a) through (c) and (e) of this subsection and whose gross
family income at the time of enrollment is more than two hundred percent, but
less than two hundred fifty-one percent, of the federal poverty level as
adjusted for family size and determined annually by the federal department of
health and human services.
(5)
"Nonsubsidized enrollee" means an individual, or an individual plus
the individual's spouse or dependent children: (a) Who is not eligible for
medicare; (b) who is not confined or residing in a government-operated
institution, unless he or she meets eligibility criteria adopted by the
administrator; (c) who resides in an area of the state served by a managed
health care system participating in the plan; (d) who chooses to obtain basic
health care coverage from a particular managed health care system; and (e) who
pays or on whose behalf is paid the full costs for participation in the plan,
without any subsidy from the plan.
(6)
"Subsidy" means the difference between the amount of periodic payment
the administrator makes to a managed health care system on behalf of a
subsidized enrollee plus the administrative cost to the plan of providing the
plan to that subsidized enrollee, and the amount determined to be the
subsidized enrollee's responsibility under RCW 70.47.060(2).
(7)
"Premium" means a periodic payment, based upon gross family income
which an individual, their employer or another financial sponsor makes to the
plan as consideration for enrollment in the plan as a subsidized enrollee or a
nonsubsidized enrollee.
(8)
"Rate" means the ((per capita)) amount, negotiated by the
administrator with and paid to a participating managed health care system, that
is based upon the enrollment of subsidized and nonsubsidized enrollees in the
plan and in that system.
Sec.
44. RCW
41.05.140 and 1994 c 153 s 10 are each amended to read as follows:
(1)
Except for property and casualty insurance, the authority may self-fund,
self-insure, or enter into other methods of providing insurance coverage for
insurance programs under its jurisdiction ((except property and casualty
insurance)), including the basic health plan as provided in chapter
70.47 RCW. The authority shall contract for payment of claims or other
administrative services for programs under its jurisdiction. If a program does
not require the prepayment of reserves, the authority shall establish such
reserves within a reasonable period of time for the payment of claims as are
normally required for that type of insurance under an insured program. The
authority shall endeavor to reimburse basic health plan health care providers
under this section at rates similar to the average reimbursement rates offered
by the state-wide benchmark plan determined through the request for proposal
process.
(2)
Reserves established by the authority for employee and retiree benefit programs
shall be held in a separate trust fund by the state treasurer and shall be
known as the public employees' and retirees' insurance reserve fund. The state
investment board shall act as the investor for the funds and, except as
provided in RCW 43.33A.160, one hundred percent of all earnings from these
investments shall accrue directly to the public employees' and retirees'
insurance reserve fund.
(3)
Any savings realized as a result of a program created for employees and
retirees under this section shall not be used to increase benefits unless such
use is authorized by statute.
(4)
Reserves established by the authority to provide insurance coverage for the
basic health plan under chapter 70.47 RCW shall be held in a separate trust
account in the custody of the state treasurer and shall be known as the basic
health plan self-insurance reserve account. The state investment board shall
act as the investor for the funds and, except as provided in RCW 43.33A.160, one
hundred percent of all earnings from these investments shall accrue directly to
the basic health plan self-insurance reserve account.
(5)
Any program created under this section shall be subject to the examination
requirements of chapter 48.03 RCW as if the program were a domestic insurer.
In conducting an examination, the commissioner shall determine the adequacy of
the reserves established for the program.
(((5)))
(6) The authority shall keep full and adequate accounts and records of
the assets, obligations, transactions, and affairs of any program created under
this section.
(((6)))
(7) The authority shall file a quarterly statement of the financial
condition, transactions, and affairs of any program created under this section
in a form and manner prescribed by the insurance commissioner. The statement
shall contain information as required by the commissioner for the type of
insurance being offered under the program. A copy of the annual statement
shall be filed with the speaker of the house of representatives and the
president of the senate.
Sec.
45. RCW
43.79A.040 and 1999 c 384 s 8 and 1999 c 182 s 2 are each reenacted and amended
to read as follows:
(1)
Money in the treasurer's trust fund may be deposited, invested, and reinvested
by the state treasurer in accordance with RCW 43.84.080 in the same manner and
to the same extent as if the money were in the state treasury.
(2)
All income received from investment of the treasurer's trust fund shall be set
aside in an account in the treasury trust fund to be known as the investment
income account.
(3)
The investment income account may be utilized for the payment of purchased
banking services on behalf of treasurer's trust funds including, but not
limited to, depository, safekeeping, and disbursement functions for the state
treasurer or affected state agencies. The investment income account is subject
in all respects to chapter 43.88 RCW, but no appropriation is required for
payments to financial institutions. Payments shall occur prior to distribution
of earnings set forth in subsection (4) of this section.
(4)(a)
Monthly, the state treasurer shall distribute the earnings credited to the
investment income account to the state general fund except under (b) and (c) of
this subsection.
(b)
The following accounts and funds shall receive their proportionate share of
earnings based upon each account's or fund's average daily balance for the
period: The Washington advanced college tuition payment program account, the
agricultural local fund, the American Indian scholarship endowment fund, the
basic health plan self-insurance reserve account, the Washington
international exchange scholarship endowment fund, the developmental
disabilities endowment trust fund, the energy account, the fair fund, the game
farm alternative account, the grain inspection revolving fund, the juvenile
accountability incentive account, the rural rehabilitation account, the stadium
and exhibition center account, the youth athletic facility grant account, the
self-insurance revolving fund, the sulfur dioxide abatement account, and the
children's trust fund. However, the earnings to be distributed shall first be
reduced by the allocation to the state treasurer's service fund pursuant to RCW
43.08.190.
(c)
The following accounts and funds shall receive eighty percent of their
proportionate share of earnings based upon each account's or fund's average
daily balance for the period: The advanced right of way revolving fund, the
advanced environmental mitigation revolving account, the federal narcotics
asset forfeitures account, the high occupancy vehicle account, the local rail
service assistance account, and the miscellaneous transportation programs
account.
(5)
In conformance with Article II, section 37 of the state Constitution, no trust
accounts or funds shall be allocated earnings without the specific affirmative
directive of this section.
NEW
SECTION. Sec. 46. A
new section is added to chapter 41.05 RCW to read as follows:
(1)
The administrator shall design and offer a plan of health care coverage as
described in subsection (2) of this section, for any person eligible under
subsection (3) of this section. The health care coverage shall be designed and
offered only to the extent that state funds are specifically appropriated for
this purpose.
(2)
The plan of health care coverage shall have the following components:
(a)
Services covered more limited in scope than those contained in RCW
48.41.110(3);
(b)
Enrollee cost-sharing that may include but not be limited to point-of-service
cost-sharing for covered services;
(c)
Deductibles of three thousand dollars on a per person per calendar year basis,
and four thousand dollars on a per family per calendar year basis. The
deductible shall be applied to the first three thousand dollars, or four
thousand dollars, of eligible expenses incurred by the covered person or
family, respectively, except that the deductible shall not be applied to
clinical preventive services as recommended by the United States public health
service. Enrollee out-of-pocket expenses required to be paid under the plan
for cost-sharing and deductibles shall not exceed five thousand dollars per person,
or six thousand dollars per family;
(d)
Payment methodologies for network providers may include but are not limited to
resource-based relative value fee schedules, capitation payments, diagnostic
related group fee schedules, and other similar strategies including
risk-sharing arrangements; and
(e)
Other appropriate care management and cost-containment measures determined
appropriate by the administrator, including but not limited to care
coordination, provider network limitations, preadmission certification, and
utilization review.
(3)
Any person is eligible for coverage in the plan who resides in a county of the
state where no carrier, as defined in RCW 48.43.005, or insurer regulated under
chapter 48.15 RCW offers to the public an individual health benefit plan as
defined in RCW 48.43.005 other than a catastrophic health plan as defined in
RCW 48.43.005 at the time of application to the administrator. Such
eligibility may terminate pursuant to subsection (7) of this section.
(4)
The administrator may not reject an individual for coverage based upon
preexisting conditions of the individual or deny, exclude, or otherwise limit
coverage for an individual's preexisting health conditions; except that it
shall impose a nine-month benefit waiting period for preexisting conditions for
which medical advice was given, or for which a health care provider recommended
or provided treatment, or for which a prudent layperson would have sought
advice or treatment, within six months before the effective date of coverage.
The preexisting condition waiting period shall not apply to prenatal care
services. Credit against the waiting period shall be provided pursuant to
subsection (5) of this section.
(5)
The administrator shall credit any preexisting condition waiting period in the
plan for a person who was enrolled at any time during the sixty-three day
period immediately preceding the date of application for the plan in a group
health benefit plan or an individual health benefit plan other than a
catastrophic health plan. The administrator must credit the period of coverage
the person was continuously covered under the immediately preceding health plan
toward the waiting period of the new health plan. For the purposes of this
subsection, a preceding health plan includes an employer-provided self-funded
health plan.
(6)
The administrator shall set the rates to be charged plan enrollees.
(7)
When a carrier, as defined in RCW 48.43.005, or an insurer regulated under
chapter 48.15 RCW, begins to offer an individual health benefit plan as defined
in RCW 48.43.005 in a county where no carrier or insurer had been offering an
individual health benefit plan:
(a)
If the health benefit plan offered is other than a catastrophic health plan as
defined in RCW 48.43.005, any person enrolled in the plan under subsection (3)
of this section in that county shall no longer be eligible;
(b)
The administrator shall provide written notice to any person who is no longer
eligible for coverage under the plan within thirty days of the administrator's
determination that the person is no longer eligible. The notice shall: (i)
Indicate that coverage under the plan will cease ninety days from the date that
the notice is dated; (ii) describe any other coverage options available to the
person; and (iii) describe the enrollment process for the available options.
NEW
SECTION. Sec. 47. RCW
48.41.180 (Offer of coverage to eligible persons) and 1987 c 431
s 18 are each repealed.
NEW
SECTION. Sec. 48. If
any provision of this act or its application to any person or circumstance is
held invalid, the remainder of the act or the application of the provision to
other persons or circumstances is not affected.
NEW
SECTION. Sec. 49.
Sections 37 and 38 of this act expire September 1, 2000.
NEW
SECTION. Sec. 50. (1)
Section 38 of this act takes effect July 1, 2000.
(2)
Section 39 of this act takes effect September 1, 2000.
(3)
Section 26 of this act takes effect on the first day of the month following the
expiration of a one hundred eighty-day period beginning on the effective date
of section 25 of this act.
NEW
SECTION. Sec. 51.
Except for sections 26, 38, and 39 of this act, this act is necessary for the
immediate preservation of the public peace, health, or safety, or support of
the state government and its existing public institutions, and takes effect
immediately.
