SF 1937

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to health; establishing premium growth goals; 
  1.3             amending Minnesota Statutes 1998, sections 60A.15, 
  1.4             subdivision 1; 62A.65, subdivision 3; 62J.04, 
  1.5             subdivision 3, and by adding a subdivision; 62J.301, 
  1.6             subdivision 3; 62J.38; and 62L.08, subdivision 8. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 60A.15, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
  1.11  before April 1, June 1, and December 1 of each year, every 
  1.12  domestic and foreign company, including town and farmers' mutual 
  1.13  insurance companies, domestic mutual insurance companies, marine 
  1.14  insurance companies, health maintenance organizations, community 
  1.15  integrated service networks, and nonprofit health service plan 
  1.16  corporations, shall pay to the commissioner of revenue 
  1.17  installments equal to one-third of the insurer's total estimated 
  1.18  tax for the current year.  Except as provided in paragraphs (d), 
  1.19  (e), (h), and (i), installments must be based on a sum equal to 
  1.20  two percent of the premiums described in paragraph (b). 
  1.21     (b) Installments under paragraph (a), (d), or (e) are 
  1.22  percentages of gross premiums less return premiums on all direct 
  1.23  business received by the insurer in this state, or by its agents 
  1.24  for it, in cash or otherwise, during such year. 
  1.25     (c) Failure of a company to make payments of at least 
  1.26  one-third of either (1) the total tax paid during the previous 
  2.1   calendar year or (2) 80 percent of the actual tax for the 
  2.2   current calendar year shall subject the company to the penalty 
  2.3   and interest provided in this section, unless the total tax for 
  2.4   the current tax year is $500 or less. 
  2.5      (d) For health maintenance organizations, nonprofit health 
  2.6   service plan corporations, and community integrated service 
  2.7   networks, the installments must be based on an amount determined 
  2.8   under paragraph (h) or (i). 
  2.9      (e) For purposes of computing installments for town and 
  2.10  farmers' mutual insurance companies and for mutual property 
  2.11  casualty companies with total assets on December 31, 1989, of 
  2.12  $1,600,000,000 or less, the following rates apply: 
  2.13     (1) for all life insurance, two percent; 
  2.14     (2) for town and farmers' mutual insurance companies and 
  2.15  for mutual property and casualty companies with total assets of 
  2.16  $5,000,000 or less, on all other coverages, one percent; and 
  2.17     (3) for mutual property and casualty companies with total 
  2.18  assets on December 31, 1989, of $1,600,000,000 or less, on all 
  2.19  other coverages, 1.26 percent. 
  2.20     (f) If the aggregate amount of premium tax payments under 
  2.21  this section and the fire marshal tax payments under section 
  2.22  299F.21 made during a calendar year is equal to or exceeds 
  2.23  $120,000, all tax payments in the subsequent calendar year must 
  2.24  be paid by means of a funds transfer as defined in section 
  2.25  336.4A-104, paragraph (a).  The funds transfer payment date, as 
  2.26  defined in section 336.4A-401, must be on or before the date the 
  2.27  payment is due.  If the date the payment is due is not a funds 
  2.28  transfer business day, as defined in section 336.4A-105, 
  2.29  paragraph (a), clause (4), the payment date must be on or before 
  2.30  the funds transfer business day next following the date the 
  2.31  payment is due.  
  2.32     (g) Premiums under medical assistance, general assistance 
  2.33  medical care, the MinnesotaCare program, and the Minnesota 
  2.34  comprehensive health insurance plan and all payments, revenues, 
  2.35  and reimbursements received from the federal government for 
  2.36  Medicare-related coverage as defined in section 62A.31, 
  3.1   subdivision 3, paragraph (e), are not subject to tax under this 
  3.2   section. 
  3.3      (h) For calendar years 1997, 1998, and 1999, the 
  3.4   installments for health maintenance organizations, community 
  3.5   integrated service networks, and nonprofit health service plan 
  3.6   corporations must be based on an amount equal to one percent of 
  3.7   premiums described under paragraph (b).  Health maintenance 
  3.8   organizations, community integrated service networks, and 
  3.9   nonprofit health service plan corporations that have met the 
  3.10  cost containment goals established under section 62J.04 in the 
  3.11  individual and small employer market for calendar year 1996 are 
  3.12  exempt from payment of the tax imposed under this section for 
  3.13  premiums paid after March 30, 1997, and before April 1, 1998.  
  3.14  Health maintenance organizations, community integrated service 
  3.15  networks, and nonprofit health service plan corporations that 
  3.16  have met the cost containment goals established under section 
  3.17  62J.04 in the individual and small employer market for calendar 
  3.18  year 1997 are exempt from payment of the tax imposed under this 
  3.19  section for premiums paid after March 30, 1998, and before April 
  3.20  1, 1999.  Health maintenance organizations, community integrated 
  3.21  service networks, and nonprofit health service plan corporations 
  3.22  that have met the cost containment goals established under 
  3.23  section 62J.04 in the individual and small employer market for 
  3.24  calendar year 1998 are exempt from payment of the tax imposed 
  3.25  under this section for premiums paid after March 30, 1999, and 
  3.26  before January 1, 2000.  
  3.27     (i) For calendar years after 1999, the commissioner of 
  3.28  finance shall determine the balance of the health care access 
  3.29  fund on September 1 of each year beginning September 1, 1999.  
  3.30  If the commissioner determines that there is no structural 
  3.31  deficit for the next fiscal year, no tax shall be imposed under 
  3.32  paragraph (d) for the following calendar year for health 
  3.33  maintenance organizations, community integrated service 
  3.34  networks, and nonprofit health service plan corporations that 
  3.35  have met the premium growth goals established under section 
  3.36  62J.04 for the previous calendar year in the individual and 
  4.1   small employer market.  For health maintenance organizations, 
  4.2   community integrated service networks, and nonprofit health 
  4.3   service plan corporations that have not met the premium growth 
  4.4   goals for the previous calendar year in the individual and small 
  4.5   employer market, the tax must be paid based on an amount equal 
  4.6   to one percent of premiums described in paragraph (b).  If the 
  4.7   commissioner determines that there will be a structural deficit 
  4.8   in the fund for the following fiscal year, then the 
  4.9   commissioner, in consultation with the commissioner of revenue, 
  4.10  shall determine the amount needed to eliminate the structural 
  4.11  deficit and a tax shall be imposed under paragraph (d) for the 
  4.12  following calendar year.  The commissioner shall determine the 
  4.13  rate of the tax as either one-quarter of one percent, one-half 
  4.14  of one percent, three-quarters of one percent, or one percent of 
  4.15  premiums described in paragraph (b), whichever is the lowest of 
  4.16  those rates that the commissioner determines will produce 
  4.17  sufficient revenue to eliminate the projected structural 
  4.18  deficit.  The commissioner of finance shall publish in the State 
  4.19  Register by October 1 of each year the amount of tax to be 
  4.20  imposed for the following calendar year.  In determining the 
  4.21  structural balance of the health care access fund for fiscal 
  4.22  years 2000 and 2001, the commissioner shall disregard the 
  4.23  transfer amount from the health care access fund to the general 
  4.24  fund for expenditures associated with the services provided to 
  4.25  pregnant women and children under the age of two enrolled in the 
  4.26  MinnesotaCare program.  
  4.27     (j) In approving the premium rates as required in sections 
  4.28  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
  4.29  commissioners of health and commerce shall ensure that any 
  4.30  exemption from the tax as described in paragraphs (h) and (i) is 
  4.31  reflected in the premium rate. 
  4.32     Sec. 2.  Minnesota Statutes 1998, section 62A.65, 
  4.33  subdivision 3, is amended to read: 
  4.34     Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
  4.35  plan may be offered, sold, issued, or renewed to a Minnesota 
  4.36  resident unless the premium rate charged is determined in 
  5.1   accordance with the following requirements:  
  5.2      (a) Premium rates must be no more than 25 percent above and 
  5.3   no more than 25 percent below the index rate charged to 
  5.4   individuals for the same or similar coverage, adjusted pro rata 
  5.5   for rating periods of less than one year.  The premium 
  5.6   variations permitted by this paragraph must be based only upon 
  5.7   health status, claims experience, and occupation.  For purposes 
  5.8   of this paragraph, health status includes refraining from 
  5.9   tobacco use or other actuarially valid lifestyle factors 
  5.10  associated with good health, provided that the lifestyle factor 
  5.11  and its effect upon premium rates have been determined by the 
  5.12  commissioner to be actuarially valid and have been approved by 
  5.13  the commissioner.  Variations permitted under this paragraph 
  5.14  must not be based upon age or applied differently at different 
  5.15  ages.  This paragraph does not prohibit use of a constant 
  5.16  percentage adjustment for factors permitted to be used under 
  5.17  this paragraph. 
  5.18     (b) Premium rates may vary based upon the ages of covered 
  5.19  persons only as provided in this paragraph.  In addition to the 
  5.20  variation permitted under paragraph (a), each health carrier may 
  5.21  use an additional premium variation based upon age of up to plus 
  5.22  or minus 50 percent of the index rate. 
  5.23     (c) A health carrier may request approval by the 
  5.24  commissioner to establish no more than three geographic regions 
  5.25  and to establish separate index rates for each region, provided 
  5.26  that the index rates do not vary between any two regions by more 
  5.27  than 20 percent.  Health carriers that do not do business in the 
  5.28  Minneapolis/St. Paul metropolitan area may request approval for 
  5.29  no more than two geographic regions, and clauses (2) and (3) do 
  5.30  not apply to approval of requests made by those health 
  5.31  carriers.  The commissioner may grant approval if the following 
  5.32  conditions are met: 
  5.33     (1) the geographic regions must be applied uniformly by the 
  5.34  health carrier; 
  5.35     (2) one geographic region must be based on the 
  5.36  Minneapolis/St. Paul metropolitan area; 
  6.1      (3) for each geographic region that is rural, the index 
  6.2   rate for that region must not exceed the index rate for the 
  6.3   Minneapolis/St. Paul metropolitan area; and 
  6.4      (4) the health carrier provides actuarial justification 
  6.5   acceptable to the commissioner for the proposed geographic 
  6.6   variations in index rates, establishing that the variations are 
  6.7   based upon differences in the cost to the health carrier of 
  6.8   providing coverage. 
  6.9      (d) Health carriers may use rate cells and must file with 
  6.10  the commissioner the rate cells they use.  Rate cells must be 
  6.11  based upon the number of adults or children covered under the 
  6.12  policy and may reflect the availability of Medicare coverage.  
  6.13  The rates for different rate cells must not in any way reflect 
  6.14  generalized differences in expected costs between principal 
  6.15  insureds and their spouses. 
  6.16     (e) In developing its index rates and premiums for a health 
  6.17  plan, a health carrier shall take into account only the 
  6.18  following factors: 
  6.19     (1) actuarially valid differences in rating factors 
  6.20  permitted under paragraphs (a) and (b); and 
  6.21     (2) actuarially valid geographic variations if approved by 
  6.22  the commissioner as provided in paragraph (c). 
  6.23     (f) All premium variations must be justified in initial 
  6.24  rate filings and upon request of the commissioner in rate 
  6.25  revision filings.  All rate variations are subject to approval 
  6.26  by the commissioner. 
  6.27     (g) The loss ratio must comply with the section 62A.021 
  6.28  requirements for individual health plans. 
  6.29     (h) The rates must not be approved, unless the commissioner 
  6.30  has determined that the rates are reasonable.  In determining 
  6.31  reasonableness, the commissioner shall consider the growth rates 
  6.32  applied under section 62J.04, subdivision subdivisions 1, 
  6.33  paragraph (b),; and 1b, to the calendar year or years that the 
  6.34  proposed premium rate would be in effect, actuarially valid 
  6.35  changes in risks associated with the enrollee populations, and 
  6.36  actuarially valid changes as a result of statutory changes in 
  7.1   Laws 1992, chapter 549. 
  7.2      Sec. 3.  Minnesota Statutes 1998, section 62J.04, is 
  7.3   amended by adding a subdivision to read: 
  7.4      Subd. 1b.  [PREMIUM GROWTH GOALS.] (a) For calendar year 
  7.5   1999 and each year thereafter, the commissioner shall set annual 
  7.6   premium growth goals for health plan companies, as provided in 
  7.7   paragraph (b).  The premium growth goals shall apply only to 
  7.8   small group and individual health insurance markets, must be set 
  7.9   at levels that the commissioner determines to be realistic and 
  7.10  achievable, and must reflect changes in overall prices and 
  7.11  medical prices.  For the purpose of this subdivision, premium 
  7.12  growth is measured as the percentage change in per member per 
  7.13  month premium revenue from the current year to the previous 
  7.14  year.  Premium growth rates shall be calculated for the 
  7.15  following lines of business:  individual, small group, and large 
  7.16  group.  Data used for premium growth rate calculations shall be 
  7.17  submitted as part of the cost containment filing under section 
  7.18  62J.38. 
  7.19     (b) The premium growth goals set by the commissioner shall 
  7.20  be the following: 
  7.21     (1) for calendar year 1999, the rate of growth of per 
  7.22  member per month premium revenues in the small group and 
  7.23  individual markets during 1998 shall be no greater than the 
  7.24  growth of per member per month premium revenues in the large 
  7.25  group market during 1998; 
  7.26     (2) for calendar year 2000, the rate of growth of per 
  7.27  member per month premium revenues in the small group and 
  7.28  individual markets during 1999 shall be no greater than the 
  7.29  growth of per member per month premium revenues in the large 
  7.30  group market during 1999; 
  7.31     (3) for calendar year 2001, the rate of growth of per 
  7.32  member per month premium revenues in the small group and 
  7.33  individual markets during 2000 shall be no greater than the 
  7.34  growth of per member per month premium revenues in the large 
  7.35  group market during 2000; and 
  7.36     (4) for years beyond calendar year 2001, the commissioner 
  8.1   shall determine and set premium growth goals in accordance with 
  8.2   paragraph (a). 
  8.3      Sec. 4.  Minnesota Statutes 1998, section 62J.04, 
  8.4   subdivision 3, is amended to read: 
  8.5      Subd. 3.  [COST CONTAINMENT DUTIES.] After obtaining the 
  8.6   advice and recommendations of the Minnesota health care 
  8.7   commission, The commissioner shall: 
  8.8      (1) establish statewide and regional cost containment goals 
  8.9   for total health care spending under this section and collect 
  8.10  data as described in sections 62J.38 to 62J.41 to monitor 
  8.11  statewide achievement of the cost containment goals and premium 
  8.12  growth goals; 
  8.13     (2) divide the state into no fewer than four regions, with 
  8.14  one of those regions being the Minneapolis/St. Paul metropolitan 
  8.15  statistical area but excluding Chisago, Isanti, Wright, and 
  8.16  Sherburne counties, for purposes of fostering the development of 
  8.17  regional health planning and coordination of health care 
  8.18  delivery among regional health care systems and working to 
  8.19  achieve the cost containment goals; 
  8.20     (3) provide technical assistance to regional coordinating 
  8.21  boards; 
  8.22     (4) monitor the quality of health care throughout the state 
  8.23  and take action as necessary to ensure an appropriate level of 
  8.24  quality; 
  8.25     (5) issue recommendations regarding uniform billing forms, 
  8.26  uniform electronic billing procedures and data interchanges, 
  8.27  patient identification cards, and other uniform claims and 
  8.28  administrative procedures for health care providers and private 
  8.29  and public sector payers.  In developing the recommendations, 
  8.30  the commissioner shall review the work of the work group on 
  8.31  electronic data interchange (WEDI) and the American National 
  8.32  Standards Institute (ANSI) at the national level, and the work 
  8.33  being done at the state and local level.  The commissioner may 
  8.34  adopt rules requiring the use of the Uniform Bill 82/92 form, 
  8.35  the National Council of Prescription Drug Providers (NCPDP) 3.2 
  8.36  electronic version, the Health Care Financing Administration 
  9.1   1500 form, or other standardized forms or procedures; 
  9.2      (6) undertake health planning responsibilities as provided 
  9.3   in section 62J.15; 
  9.4      (7) authorize, fund, or promote research and 
  9.5   experimentation on new technologies and health care procedures; 
  9.6      (8) within the limits of appropriations for these purposes, 
  9.7   administer or contract for statewide consumer education and 
  9.8   wellness programs that will improve the health of Minnesotans 
  9.9   and increase individual responsibility relating to personal 
  9.10  health and the delivery of health care services, undertake 
  9.11  prevention programs including initiatives to improve birth 
  9.12  outcomes, expand childhood immunization efforts, and provide 
  9.13  start-up grants for worksite wellness programs; 
  9.14     (9) undertake other activities to monitor and oversee the 
  9.15  delivery of health care services in Minnesota with the goal of 
  9.16  improving affordability, quality, and accessibility of health 
  9.17  care for all Minnesotans; and 
  9.18     (10) make the cost containment goal and premium growth goal 
  9.19  data available to the public in a consumer-oriented manner. 
  9.20     Sec. 5.  Minnesota Statutes 1998, section 62J.301, 
  9.21  subdivision 3, is amended to read: 
  9.22     Subd. 3.  [GENERAL DUTIES.] The commissioner shall: 
  9.23     (1) collect and maintain data which enable population-based 
  9.24  monitoring and trending of the access, utilization, quality, and 
  9.25  cost of health care services within Minnesota; 
  9.26     (2) collect and maintain data for the purpose of estimating 
  9.27  total Minnesota health care expenditures and trends; 
  9.28     (3) collect and maintain data for the purposes of setting 
  9.29  cost containment goals and premium growth goals under section 
  9.30  62J.04, and measuring cost containment goal and premium growth 
  9.31  goal compliance; 
  9.32     (4) conduct applied research using existing and new data 
  9.33  and promote applications based on existing research; 
  9.34     (5) develop and implement data collection procedures to 
  9.35  ensure a high level of cooperation from health care providers 
  9.36  and health plan companies, as defined in section 62Q.01, 
 10.1   subdivision 4; 
 10.2      (6) work closely with health plan companies and health care 
 10.3   providers to promote improvements in health care efficiency and 
 10.4   effectiveness; and 
 10.5      (7) participate as a partner or sponsor of private sector 
 10.6   initiatives that promote publicly disseminated applied research 
 10.7   on health care delivery, outcomes, costs, quality, and 
 10.8   management. 
 10.9      Sec. 6.  Minnesota Statutes 1998, section 62J.38, is 
 10.10  amended to read: 
 10.11     62J.38 [COST CONTAINMENT DATA FROM GROUP PURCHASERS.] 
 10.12     (a) The commissioner shall require group purchasers to 
 10.13  submit detailed data on total health care spending for each 
 10.14  calendar year.  Group purchasers shall submit data for the 1993 
 10.15  calendar year by April 1, 1994, and each April 1 thereafter 
 10.16  shall submit data for the preceding calendar year. 
 10.17     (b) The commissioner shall require each group purchaser to 
 10.18  submit data on revenue, expenses, and member months, as 
 10.19  applicable.  Revenue data must distinguish between premium 
 10.20  revenue and revenue from other sources and must also include 
 10.21  information on the amount of revenue in reserves and changes in 
 10.22  reserves.  Premium revenue data, information on aggregate 
 10.23  enrollment, and data on member months must be broken down to 
 10.24  distinguish between individual market, small group market, and 
 10.25  large group market.  Filings under this section for calendar 
 10.26  year 1998 must also include information broken down by 
 10.27  individual market, small group market, and large group market 
 10.28  for calendar year 1997.  Expenditure data, including raw data 
 10.29  from claims, may be provided separately for the following 
 10.30  categories or for other categories required by the 
 10.31  commissioner:  physician services, dental services, other 
 10.32  professional services, inpatient hospital services, outpatient 
 10.33  hospital services, emergency, pharmacy services and other 
 10.34  nondurable medical goods, mental health, and chemical dependency 
 10.35  services, other expenditures, subscriber liability, and 
 10.36  administrative costs.  The commissioner may require each group 
 11.1   purchaser to submit any other data, including data in 
 11.2   unaggregated form, for the purposes of developing spending 
 11.3   estimates, setting spending limits, and monitoring actual 
 11.4   spending and costs. 
 11.5      (c) The commissioner may collect information on: 
 11.6      (1) premiums, benefit levels, managed care procedures, and 
 11.7   other features of health plan companies; 
 11.8      (2) prices, provider experience, and other information for 
 11.9   services less commonly covered by insurance or for which 
 11.10  patients commonly face significant out-of-pocket expenses; and 
 11.11     (3) information on health care services not provided 
 11.12  through health plan companies, including information on prices, 
 11.13  costs, expenditures, and utilization. 
 11.14     (d) All group purchasers shall provide the required data 
 11.15  using a uniform format and uniform definitions, as prescribed by 
 11.16  the commissioner. 
 11.17     Sec. 7.  Minnesota Statutes 1998, section 62L.08, 
 11.18  subdivision 8, is amended to read: 
 11.19     Subd. 8.  [FILING REQUIREMENT.] No later than July 1, 1993, 
 11.20  and each year thereafter, a health carrier that offers, sells, 
 11.21  issues, or renews a health benefit plan for small employers 
 11.22  shall file with the commissioner the index rates and must 
 11.23  demonstrate that all rates shall be within the rating 
 11.24  restrictions defined in this chapter.  Such demonstration must 
 11.25  include the allowable range of rates from the index rates and a 
 11.26  description of how the health carrier intends to use demographic 
 11.27  factors including case characteristics in calculating the 
 11.28  premium rates.  The rates shall not be approved, unless the 
 11.29  commissioner has determined that the rates are reasonable.  In 
 11.30  determining reasonableness, the commissioner shall consider the 
 11.31  growth rates applied under section 62J.04, subdivision 
 11.32  subdivisions 1, paragraph (b),; and 1b, to the calendar year or 
 11.33  years that the proposed premium rate would be in effect, 
 11.34  actuarially valid changes in risk associated with the enrollee 
 11.35  population, and actuarially valid changes as a result of 
 11.36  statutory changes in Laws 1992, chapter 549.  For premium rates 
 12.1   proposed to go into effect between July 1, 1993 and December 31, 
 12.2   1993, the pertinent growth rate is the growth rate applied under 
 12.3   section 62J.04, subdivision 1, paragraph (b), to calendar year 
 12.4   1994.