HF 2762

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to Minnesota Comprehensive Health 
  1.3             Association; increasing the minimum premium rate; 
  1.4             authorizing a reduced premium rate for participation 
  1.5             in a disease management program; phasing out 
  1.6             Medicare-extended basic supplement plans; requiring 
  1.7             two rejections before eligible for a state plan; 
  1.8             clarifying eligibility if employer-sponsored coverage 
  1.9             is available; amending Minnesota Statutes 2002, 
  1.10            sections 62E.02, subdivision 13; 62E.10, subdivisions 
  1.11            2, 10; 62E.141; Minnesota Statutes 2003 Supplement, 
  1.12            sections 62E.08, subdivision 1; 62E.091; 62E.12; 
  1.13            62E.14, subdivision 1. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 2002, section 62E.02, 
  1.16  subdivision 13, is amended to read: 
  1.17     Subd. 13.  [ELIGIBLE PERSON.] (a) "Eligible person" means 
  1.18  an individual who: 
  1.19     (1) is currently and has been a resident of Minnesota for 
  1.20  the six months immediately preceding the date of receipt by the 
  1.21  association or its writing carrier of a completed certificate of 
  1.22  eligibility; 
  1.23     (2) meets the enrollment requirements of section 62E.14; 
  1.24  and 
  1.25     (3) is not otherwise ineligible under this subdivision. 
  1.26  For purposes of eligibility under section 62E.14, subdivision 
  1.27  4c, paragraph (b), this definition is modified as provided in 
  1.28  that paragraph. 
  1.29     (b) No individual is eligible for coverage under a 
  2.1   qualified or a Medicare supplement plan issued by the 
  2.2   association for whom a premium is paid or reimbursed by the 
  2.3   medical assistance program or general assistance medical care 
  2.4   program as of the first day of any term for which a premium 
  2.5   amount is paid or reimbursed if the individual is eligible for 
  2.6   the medical assistance program, the general assistance medical 
  2.7   care program, or the MinnesotaCare program. 
  2.8      Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  2.9   62E.08, subdivision 1, is amended to read: 
  2.10     Subdivision 1.  [ESTABLISHMENT.] The association shall 
  2.11  establish the following maximum premiums to be charged for 
  2.12  membership in the comprehensive health insurance plan: 
  2.13     (a) the premium for the number one qualified plan shall 
  2.14  range from a minimum of 101 115 percent to a maximum of 125 135 
  2.15  percent of the weighted average of rates charged by those 
  2.16  insurers and health maintenance organizations with individuals 
  2.17  enrolled in: 
  2.18     (1) $1,000 annual deductible individual plans of insurance 
  2.19  in force in Minnesota; 
  2.20     (2) individual health maintenance organization contracts of 
  2.21  coverage with a $1,000 annual deductible which are in force in 
  2.22  Minnesota; and 
  2.23     (3) other plans of coverage similar to plans offered by the 
  2.24  association based on generally accepted actuarial principles; 
  2.25     (b) the premium for the number two qualified plan shall 
  2.26  range from a minimum of 101 115 percent to a maximum of 125 135 
  2.27  percent of the weighted average of rates charged by those 
  2.28  insurers and health maintenance organizations with individuals 
  2.29  enrolled in: 
  2.30     (1) $500 annual deductible individual plans of insurance in 
  2.31  force in Minnesota; 
  2.32     (2) individual health maintenance organization contracts of 
  2.33  coverage with a $500 annual deductible which are in force in 
  2.34  Minnesota; and 
  2.35     (3) other plans of coverage similar to plans offered by the 
  2.36  association based on generally accepted actuarial principles; 
  3.1      (c) the premiums for the plans with a $2,000, $5,000, or 
  3.2   $10,000 annual deductible shall range from a minimum of 101 115 
  3.3   percent to a maximum of 125 135 percent of the weighted average 
  3.4   of rates charged by those insurers and health maintenance 
  3.5   organizations with individuals enrolled in: 
  3.6      (1) $2,000, $5,000, or $10,000 annual deductible individual 
  3.7   plans, respectively, in force in Minnesota; and 
  3.8      (2) individual health maintenance organization contracts of 
  3.9   coverage with a $2,000, $5,000, or $10,000 annual deductible, 
  3.10  respectively, which are in force in Minnesota; or 
  3.11     (3) other plans of coverage similar to plans offered by the 
  3.12  association based on generally accepted actuarial principles; 
  3.13     (d) the premium for each type of Medicare supplement plan 
  3.14  required to be offered by the association pursuant to section 
  3.15  62E.12 shall range from a minimum of 101 115 percent to a 
  3.16  maximum of 125 135 percent of the weighted average of rates 
  3.17  charged by those insurers and health maintenance organizations 
  3.18  with individuals enrolled in:  
  3.19     (1) Medicare supplement plans in force in Minnesota; 
  3.20     (2) health maintenance organization Medicare supplement 
  3.21  contracts of coverage which are in force in Minnesota; and 
  3.22     (3) other plans of coverage similar to plans offered by the 
  3.23  association based on generally accepted actuarial principles; 
  3.24  and 
  3.25     (e) the charge for health maintenance organization coverage 
  3.26  shall be based on generally accepted actuarial principles. 
  3.27     The list of insurers and health maintenance organizations 
  3.28  whose rates are used to establish the premium for coverage 
  3.29  offered by the association pursuant to paragraphs (a) to (d) 
  3.30  shall be established by the commissioner on the basis of 
  3.31  information which shall be provided to the association by all 
  3.32  insurers and health maintenance organizations annually at the 
  3.33  commissioner's request.  This information shall include the 
  3.34  number of individuals covered by each type of plan or contract 
  3.35  specified in paragraphs (a) to (d) that is sold, issued, and 
  3.36  renewed by the insurers and health maintenance organizations, 
  4.1   including those plans or contracts available only on a renewal 
  4.2   basis.  The information shall also include the rates charged for 
  4.3   each type of plan or contract.  
  4.4      In establishing premiums pursuant to this section, the 
  4.5   association shall utilize generally accepted actuarial 
  4.6   principles, provided that the association shall not discriminate 
  4.7   in charging premiums based upon sex.  In order to compute a 
  4.8   weighted average for each type of plan or contract specified 
  4.9   under paragraphs (a) to (d), the association shall, using the 
  4.10  information collected pursuant to this subdivision, list 
  4.11  insurers and health maintenance organizations in rank order of 
  4.12  the total number of individuals covered by each insurer or 
  4.13  health maintenance organization.  The association shall then 
  4.14  compute a weighted average of the rates charged for coverage by 
  4.15  all the insurers and health maintenance organizations by: 
  4.16     (1) multiplying the numbers of individuals covered by each 
  4.17  insurer or health maintenance organization by the rates charged 
  4.18  for coverage; 
  4.19     (2) separately summing both the number of individuals 
  4.20  covered by all the insurers and health maintenance organizations 
  4.21  and all the products computed under clause (1); and 
  4.22     (3) dividing the total of the products computed under 
  4.23  clause (1) by the total number of individuals covered.  
  4.24     The association may elect to use a sample of information 
  4.25  from the insurers and health maintenance organizations for 
  4.26  purposes of computing a weighted average.  In no case, however, 
  4.27  may a sample used by the association to compute a weighted 
  4.28  average include information from fewer than the two insurers or 
  4.29  health maintenance organizations highest in rank order.  
  4.30     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  4.31  62E.091, is amended to read: 
  4.32     62E.091 [APPROVAL OF STATE PLAN PREMIUMS.] 
  4.33     The association shall submit to the commissioner any 
  4.34  premiums it proposes to become effective for coverage under the 
  4.35  comprehensive health insurance plan, pursuant to section 62E.08, 
  4.36  subdivision 3.  No later than 45 days before the effective date 
  5.1   for premiums specified in section 62E.08, subdivision 3, the 
  5.2   commissioner shall approve, modify, or reject the proposed 
  5.3   premiums on the basis of the following criteria:  
  5.4      (a) whether the association has complied with the 
  5.5   provisions of section 62E.11, subdivision 11; 
  5.6      (b) whether the association has submitted the proposed 
  5.7   premiums in a manner which provides sufficient time for 
  5.8   individuals covered under the comprehensive insurance plan to 
  5.9   receive notice of any premium increase no less than 30 days 
  5.10  prior to the effective date of the increase; 
  5.11     (c) the degree to which the association's computations and 
  5.12  conclusions are consistent with section 62E.08; 
  5.13     (d) the degree to which any sample used to compute a 
  5.14  weighted average by the association pursuant to section 62E.08 
  5.15  reasonably reflects circumstances existing in the private 
  5.16  marketplace for individual coverage; 
  5.17     (e) the degree to which a weighted average computed 
  5.18  pursuant to section 62E.08 that uses information pertaining to 
  5.19  individual coverage available only on a renewal basis reflects 
  5.20  the circumstances existing in the private marketplace for 
  5.21  individual coverage; 
  5.22     (f) a comparison of the proposed increases with increases 
  5.23  in the cost of medical care and increases experienced in the 
  5.24  private marketplace for individual coverage; 
  5.25     (g) the financial consequences to enrollees of the proposed 
  5.26  increase; 
  5.27     (h) the actuarially projected effect of the proposed 
  5.28  increase upon both total enrollment in, and the nature of the 
  5.29  risks assumed by, the comprehensive health insurance plan; 
  5.30     (i) the relative solvency of the contributing members; and 
  5.31     (j) other factors deemed relevant by the commissioner. 
  5.32     In no case, however, may the commissioner approve premiums 
  5.33  for those plans of coverage described in section 62E.08, 
  5.34  subdivision 1, paragraphs (a) to (d), that are lower than 101 
  5.35  115 percent or greater than 125 135 percent of the weighted 
  5.36  averages computed by the association pursuant to section 
  6.1   62E.08.  The commissioner shall support a decision to approve, 
  6.2   modify, or reject any premium proposed by the association with 
  6.3   written findings and conclusions addressing each criterion 
  6.4   specified in this section.  If the commissioner does not 
  6.5   approve, modify, or reject the premiums proposed by the 
  6.6   association sooner than 45 days before the effective date for 
  6.7   premiums specified in section 62E.08, subdivision 3, the 
  6.8   premiums proposed by the association under this section become 
  6.9   effective.  
  6.10     Sec. 4.  Minnesota Statutes 2002, section 62E.10, 
  6.11  subdivision 2, is amended to read: 
  6.12     Subd. 2.  [BOARD OF DIRECTORS; ORGANIZATION.] The board of 
  6.13  directors of the association shall be made up of nine 11 members 
  6.14  as follows:  five three directors selected by contributing 
  6.15  members, subject to approval by the commissioner; four three 
  6.16  public directors selected by the commissioner, at least two of 
  6.17  whom must be plan enrollees.  Public members may include 
  6.18  licensed insurance agents; two directors representing small 
  6.19  employers selected by the commissioner; one licensed physician 
  6.20  director selected by the Minnesota Medical Association subject 
  6.21  to approval by the commissioner; one health economist director 
  6.22  selected by the commissioner; and one health care provider 
  6.23  director selected by the commissioner.  In determining voting 
  6.24  rights at members' meetings, each member shall be entitled to 
  6.25  vote in person or proxy.  The vote shall be a weighted vote 
  6.26  based upon the member's cost of self-insurance, accident and 
  6.27  health insurance premium, subscriber contract charges, health 
  6.28  maintenance contract payment, or community integrated service 
  6.29  network payment derived from or on behalf of Minnesota residents 
  6.30  in the previous calendar year, as determined by the 
  6.31  commissioner.  In approving directors of the board, the 
  6.32  commissioner shall consider, among other things, whether all 
  6.33  types of members are fairly represented.  Directors selected by 
  6.34  contributing members may be reimbursed from the money of the 
  6.35  association for expenses incurred by them as directors, but 
  6.36  shall not otherwise be compensated by the association for their 
  7.1   services.  The costs of conducting meetings of the association 
  7.2   and its board of directors shall be borne by members of the 
  7.3   association. 
  7.4      Sec. 5.  Minnesota Statutes 2002, section 62E.10, 
  7.5   subdivision 10, is amended to read: 
  7.6      Subd. 10.  [COST CONTAINMENT GOALS.] (a) By July 1, 2001, 
  7.7   the association shall investigate managed care delivery systems, 
  7.8   and if cost effective, enter into contracts with third-party 
  7.9   entities as provided in section 62E.101. 
  7.10     (b) By July 1, 2001, the association shall establish a 
  7.11  system to annually identify individuals insured by the Minnesota 
  7.12  Comprehensive Health Association who may be eligible for private 
  7.13  health care coverage, medical assistance, state drug programs, 
  7.14  or other state or federal programs and notify them about their 
  7.15  eligibility for these programs. 
  7.16     (c) The association shall endeavor to reduce health care 
  7.17  costs using additional methods consistent with effective patient 
  7.18  care.  At a minimum, by July 1, 2001, the association shall: 
  7.19     (1) develop a focused chronic disease management and case 
  7.20  management program; 
  7.21     (2) develop a comprehensive program of preventive care; and 
  7.22     (3) implement a total drug formulary program. 
  7.23     The association may establish a reduced premium rate or 
  7.24  other enrollee incentive may be offered based on enrollee 
  7.25  participation in the chronic disease management and case 
  7.26  management program developed under this section.  
  7.27     Sec. 6.  Minnesota Statutes 2003 Supplement, section 
  7.28  62E.12, is amended to read: 
  7.29     62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
  7.30  PLAN.] 
  7.31     (a) The association through its comprehensive health 
  7.32  insurance plan shall offer policies which provide the benefits 
  7.33  of a number one qualified plan and a number two qualified plan, 
  7.34  except that the maximum lifetime benefit on these plans shall be 
  7.35  $2,800,000; and an extended basic Medicare supplement plan and a 
  7.36  basic Medicare supplement plan as described in sections 62A.31 
  8.1   to 62A.44.  The association may also offer a plan that is 
  8.2   identical to a number one and number two qualified plan except 
  8.3   that it has a $2,000 annual deductible and a $2,800,000 maximum 
  8.4   lifetime benefit.  The association, subject to the approval of 
  8.5   the commissioner, may also offer plans that are identical to the 
  8.6   number one or number two qualified plan, except that they have 
  8.7   annual deductibles of $5,000 and $10,000, respectively; have 
  8.8   limitations on total annual out-of-pocket expenses equal to 
  8.9   those annual deductibles and therefore cover 100 percent of the 
  8.10  allowable cost of covered services in excess of those annual 
  8.11  deductibles; and have a $2,800,000 maximum lifetime benefit.  As 
  8.12  of January 1, 2006, the association shall no longer be required 
  8.13  to offer an extended basic Medicare supplement plan.  
  8.14     (b) The requirement that a policy issued by the association 
  8.15  must be a qualified plan is satisfied if the association 
  8.16  contracts with a preferred provider network and the level of 
  8.17  benefits for services provided within the network satisfies the 
  8.18  requirements of a qualified plan.  If the association uses a 
  8.19  preferred provider network, payments to nonparticipating 
  8.20  providers must meet the minimum requirements of section 72A.20, 
  8.21  subdivision 15.  
  8.22     (c) The association shall offer health maintenance 
  8.23  organization contracts in those areas of the state where a 
  8.24  health maintenance organization has agreed to make the coverage 
  8.25  available and has been selected as a writing carrier.  
  8.26     (d) Notwithstanding the provisions of section 62E.06 and 
  8.27  unless those charges are billed by a provider that is part of 
  8.28  the association's preferred provider network, the state plan 
  8.29  shall exclude coverage of services of a private duty nurse other 
  8.30  than on an inpatient basis and any charges for treatment in a 
  8.31  hospital located outside of the state of Minnesota in which the 
  8.32  covered person is receiving treatment for a mental or nervous 
  8.33  disorder, unless similar treatment for the mental or nervous 
  8.34  disorder is medically necessary, unavailable in Minnesota and 
  8.35  provided upon referral by a licensed Minnesota medical 
  8.36  practitioner. 
  9.1      Sec. 7.  Minnesota Statutes 2003 Supplement, section 
  9.2   62E.14, subdivision 1, is amended to read: 
  9.3      Subdivision 1.  [APPLICATION, CONTENTS.] The comprehensive 
  9.4   health insurance plan shall be open for enrollment by eligible 
  9.5   persons.  An eligible person shall enroll by submission of an 
  9.6   application to the writing carrier.  The application must 
  9.7   provide the following: 
  9.8      (a) name, address, age, list of residences for the 
  9.9   immediately preceding six months and length of time at current 
  9.10  residence of the applicant; 
  9.11     (b) name, address, and age of spouse and children if any, 
  9.12  if they are to be insured; 
  9.13     (c) evidence of rejection, a requirement of restrictive 
  9.14  riders, a rate up, or a preexisting conditions limitation on a 
  9.15  qualified plan, the effect of which is to substantially reduce 
  9.16  coverage from that received by a person considered a standard 
  9.17  risk, by at least one two association member members within six 
  9.18  months of the date of the application, or other eligibility 
  9.19  requirements adopted by rule by the commissioner which are not 
  9.20  inconsistent with this chapter and which evidence that a person 
  9.21  is unable to obtain coverage substantially similar to that which 
  9.22  may be obtained by a person who is considered a standard risk; 
  9.23     (d) if the applicant has been terminated from individual 
  9.24  health coverage which does not provide replacement coverage, 
  9.25  evidence that no replacement coverage that meets the 
  9.26  requirements of section 62D.121 was offered, and evidence of 
  9.27  termination of individual health coverage by an insurer, 
  9.28  nonprofit health service plan corporation, or health maintenance 
  9.29  organization, provided that the contract or policy has been 
  9.30  terminated for reasons other than (1) failure to pay the charge 
  9.31  for health care coverage; (2) failure to make co-payments 
  9.32  required by the health care plan; (3) enrollee moving out of the 
  9.33  area served; or (4) a materially false statement or 
  9.34  misrepresentation by the enrollee in the application for the 
  9.35  terminated contract or policy; and 
  9.36     (e) a designation of the coverage desired. 
 10.1      An eligible person may not purchase more than one policy 
 10.2   from the state plan.  Upon ceasing to be a resident of Minnesota 
 10.3   a person is no longer eligible to purchase or renew coverage 
 10.4   under the state plan, except as required by state or federal law 
 10.5   with respect to renewal of Medicare supplement coverage. 
 10.6      Sec. 8.  Minnesota Statutes 2002, section 62E.141, is 
 10.7   amended to read: 
 10.8      62E.141 [INCLUSION IN EMPLOYER-SPONSORED PLAN.] 
 10.9      (a) No employee of an employer that offers a health plan, 
 10.10  under which the employee is eligible for coverage, is eligible 
 10.11  to enroll, or continue to be enrolled, in the comprehensive 
 10.12  health association, except for enrollment or continued 
 10.13  enrollment necessary to cover conditions that are subject to an 
 10.14  unexpired preexisting condition limitation, preexisting 
 10.15  condition exclusion, or exclusionary rider under the employer's 
 10.16  health plan.  This section paragraph does not apply to persons 
 10.17  enrolled in the Comprehensive Health Association as of June 30, 
 10.18  1993 2004.  With respect to persons eligible to enroll in the 
 10.19  health plan of an employer that has more than 29 current 
 10.20  employees, as defined in section 62L.02, this section paragraph 
 10.21  does not apply to persons enrolled in the Comprehensive Health 
 10.22  Association as of December 31, 1994. 
 10.23     (b) Paragraph (a) applies to an employee's dependents if 
 10.24  the employer offers dependent coverage and the dependent is 
 10.25  eligible for coverage but does not apply to persons enrolled in 
 10.26  the Comprehensive Health Association as of June 30, 2004. 
 10.27     Sec. 9.  [PRESUMPTIVE CONDITIONS STUDY.] 
 10.28     The commissioner of commerce, in consultation with the 
 10.29  Minnesota Comprehensive Health Association, shall contract with 
 10.30  an independent entity to conduct an analysis of the eligibility 
 10.31  standards used for enrollment for coverage under the Minnesota 
 10.32  Comprehensive Health Association in terms of the use of 
 10.33  presumptive conditions for automatic eligibility and the 
 10.34  underwriting practices for the individual market regarding the 
 10.35  denial or limitations of coverage due to preexisting 
 10.36  conditions.  The analysis must compare the Minnesota 
 11.1   Comprehensive Health Association's practices with that of other 
 11.2   states' high-risk pools and examine the basis for denials within 
 11.3   the individual market.  The analysis must also determine whether 
 11.4   there should be additional guidelines or standards in place 
 11.5   before the existence of a specific condition or diagnosis is 
 11.6   denied coverage in the individual market or deemed automatically 
 11.7   eligible for coverage under the Minnesota Comprehensive Health 
 11.8   Association.  
 11.9      The commissioner of commerce shall submit the results of 
 11.10  the study and any recommendations to the legislature by January 
 11.11  15, 2005.