BILL REQ. #:  S-0002.1 

Read first time 01/12/09.   Referred to Committee on Health & Long-Term Care.

     AN ACT Relating to health insurance options for young adults; amending RCW 48.43.041, 48.44.022, 48.46.064, and 48.20.029; and adding a new section to chapter 48.43 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 48.43.041 and 2000 c 79 s 26 are each amended to read as follows:
     (1) All individual health benefit plans, other than catastrophic health plans((, offered or renewed on or after October 1, 2000)) and plans for young adults described in subsection (3) 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.
     (3) Carriers may design and offer a separate health plan targeted at young adults between nineteen and thirty-four years of age. The plan may include the benefits required under subsections (1) and (2) of this section but is not required to include these benefits. The health plan designed for young adults is exempt from the requirements of RCW 48.43.045(1), 48.43.515(5), 48.44.327, 48.20.392, 48.46.277, 48.43.043, 48.20.580, 48.21.241, 48.44.341, and 48.46.291. Carriers who choose to exclude maternity services from a young adult plan offered under this section must allow enrollees who become pregnant to transfer to another health benefit plan with similar cost-sharing provisions that provides coverage for maternity services, once pregnancy is confirmed by a licensed provider. Carriers shall allow the transfer to occur without applying a preexisting condition waiting period or other limitation or penalty including, but not limited to, satisfying a new deductible or stop-loss requirement.

Sec. 2   RCW 48.44.022 and 2006 c 100 s 3 are each amended to read as follows:
     (1) Except for health benefit plans covered under RCW 48.44.021, 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) Except as provided in subsection (2) of this section, 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.
     (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.
     (2) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, except individuals purchasing coverage under RCW 48.44.021, 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. Carriers may treat young adults and products developed specifically for them consistent with RCW 48.43.041(3) as a single-banded experience pool for purposes of establishing rates. The rates established for this age group are not subject to subsection (1)(d) of this section.
     (3) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005.

Sec. 3   RCW 48.46.064 and 2006 c 100 s 5 are each amended to read as follows:
     (1) Except for health benefit plans covered under RCW 48.46.063, 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) Except as provided in subsection (2) of this section, 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.
     (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.
     (2) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, except individuals purchasing coverage under RCW 48.46.063, 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. Carriers may treat young adults and products developed specifically for them consistent with RCW 48.43.041(3) as a single-banded experience pool for purposes of establishing rates. The rates established for this age group are not subject to subsection (1)(d) of this section.
     (3) As used in this section and RCW 48.46.066, "health benefit plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in RCW 48.43.005.

Sec. 4   RCW 48.20.029 and 2006 c 100 s 2 are each amended to read as follows:
     (1) Premiums for health benefit plans for individuals who purchase the plan as a member of a purchasing pool:
     (a) Consisting of five hundred or more individuals affiliated with a particular industry;
     (b) To whom care management services are provided as a benefit of pool membership; and
     (c) Which allows contributions from more than one employer to be used towards the purchase of an individual's health benefit plan;
shall be calculated using the adjusted community rating method that spreads financial risk across the entire purchasing pool of which the individual is a member. All such rates shall conform to the following:
     (i) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:
     (A) Geographic area;
     (B) Family size;
     (C) Age;
     (D) Tenure discounts; and
     (E) Wellness activities.
     (ii) The adjustment for age in (c)(i)(C) 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.
     (iii) 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 are subject to the requirements of this subsection.
     (iv) Except as provided in subsection (2) of this section, 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.
     (v) 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.
     (vi) 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:
     (A) Changes to the family composition;
     (B) Changes to the health benefit plan requested by the individual; or
     (C) Changes in government requirements affecting the health benefit plan.
     (vii) 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.
     (viii) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent.
     (2) Adjusted community rates established under this section shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045. Carriers may treat young adults and products developed specifically for them consistent with RCW 48.43.041(3) as a single-banded experience pool for purposes of establishing rates. The rates established for this age group are not subject to subsection (1)(c)(iv) of this section.
     (3) As used in this section, "health benefit plan," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005.

NEW SECTION.  Sec. 5   A new section is added to chapter 48.43 RCW to read as follows:
     The office of the insurance commissioner shall make available educational and outreach materials targeted to young adults aged nineteen to thirty-four, as funding becomes available. Education and outreach efforts shall focus on educating young consumers on the importance and value of health insurance, including educational materials, public service messages, and other outreach activities. The commissioner is authorized to fund these activities with grants, donations, in-kind contributions, or other funding that may be available.