1997 Minnesota Statutes

     62E.08 State plan premium. 

    Subdivision 1.    Establishment.  The association shall 
 establish the following maximum premiums to be charged for 
 membership in the comprehensive health insurance plan: 

    (a) the premium for the number one qualified plan shall 
 range from a minimum of 101 percent to a maximum of 125 percent 
 of the weighted average of rates charged by those insurers and 
 health maintenance organizations with individuals enrolled in: 

    (1) number one individual qualified plans of insurance in 
 force in Minnesota; 

    (2) individual health maintenance organization contracts of 
 coverage which are in force in Minnesota and which are, or are 
 adjusted to be, actuarially equivalent to number one individual 
 qualified plans; and 

    (3) individual policies and individual health maintenance 
 organization contracts of coverage which are in force in 
 Minnesota, are not qualified under section 62E.06, are, or are 
 adjusted to be, actuarially equivalent to number one individual 
 qualified plans, and do not fall under clause (2); 

    (b) the premium for the number two qualified plan shall 
 range from a minimum of 101 percent to a maximum of 125 percent 
 of the weighted average of rates charged by those insurers and 
 health maintenance organizations with individuals enrolled in: 

    (1) number two individual qualified plans of insurance in 
 force in Minnesota; 

    (2) individual health maintenance organization contracts of 
 coverage which are in force in Minnesota and which are, or are 
 adjusted to be, actuarially equivalent to number two individual 
 qualified plans; and 

    (3) individual policies and individual health maintenance 
 organization contracts of coverage which are in force in 
 Minnesota, are not qualified under section 62E.06, are, or are 
 adjusted to be, actuarially equivalent to number two individual 
 qualified plans, and do not fall under clause (2); 

    (c) the premium for each type of qualified Medicare 
 supplement plan required to be offered by the association 
 pursuant to section 62E.12 shall range from a minimum of 101 
 percent to a maximum of 125 percent of the weighted average of 
 rates charged by those insurers and health maintenance 
 organizations with individuals enrolled in:  

    (1) qualified Medicare supplement plans in force in 
 Minnesota; 

    (2) health maintenance organization Medicare supplement 
 contracts of coverage which are in force in Minnesota and which 
 are, or are adjusted to be, actuarially equivalent to qualified 
 Medicare supplement plans; and 

    (3) Medicare supplement policies and health maintenance 
 organization Medicare supplement contracts of coverage which are 
 in force in Minnesota, are not qualified under section 62E.07, 
 are, or are adjusted to be, actuarially equivalent to qualified 
 Medicare supplement plans, and do not fall under clause (2); and 

    (d) the charge for health maintenance organization coverage 
 shall be based on generally accepted actuarial principles. 

    The list of insurers and health maintenance organizations 
 whose rates are used to establish the premium for coverage 
 offered by the association pursuant to paragraphs (a) to (c) 
 shall be established by the commissioner on the basis of 
 information which shall be provided to the association by all 
 insurers and health maintenance organizations annually at the 
 commissioner's request.  This information shall include the 
 number of individuals covered by each type of plan or contract 
 specified in paragraphs (a) to (c) that is sold, issued, and 
 renewed by the insurers and health maintenance organizations, 
 including those plans or contracts available only on a renewal 
 basis.  The information shall also include the rates charged for 
 each type of plan or contract.  

    In establishing premiums pursuant to this section, the 
 association shall utilize generally accepted actuarial 
 principles, provided that the association shall not discriminate 
 in charging premiums based upon sex.  In order to compute a 
 weighted average for each type of plan or contract specified 
 under paragraphs (a) to (c), the association shall, using the 
 information collected pursuant to this subdivision, list 
 insurers and health maintenance organizations in rank order of 
 the total number of individuals covered by each insurer or 
 health maintenance organization.  The association shall then 
 compute a weighted average of the rates charged for coverage by 
 all the insurers and health maintenance organizations by: 

    (1) multiplying the numbers of individuals covered by each 
 insurer or health maintenance organization by the rates charged 
 for coverage; 

    (2) separately summing both the number of individuals 
 covered by all the insurers and health maintenance organizations 
 and all the products computed under clause (1); and 

    (3) dividing the total of the products computed under 
 clause (1) by the total number of individuals covered.  

    The association may elect to use a sample of information 
 from the insurers and health maintenance organizations for 
 purposes of computing a weighted average.  If the association so 
 elects, the sample of information from insurers and health 
 maintenance organizations shall, at a minimum, include 
 information from those insurers and health maintenance 
 organizations which, according to their order of ranking from 
 the largest number of individuals covered to the smallest 
 number, account for at least the first 51 percent of all 
 individuals covered.  In no case, however, may a sample used by 
 the association to compute a weighted average include 
 information from fewer than the two insurers or health 
 maintenance organizations highest in rank order.  

    Subd. 2.    Self-supporting.  Subject to subdivision 1, 
 the schedule of premiums for coverage under the comprehensive 
 health insurance plan shall be designed to be self-supporting 
 and based on generally accepted actuarial principles. 

    Subd. 3.    Determination of rates.  Premium rates under 
 this section must be determined annually.  These rates are 
 effective July 1 of each year and must be based on a survey of 
 approved rates of insurers and health maintenance organizations 
 in effect, or to be in effect, on April 1 of the same calendar 
 year. 

    HIST: 1976 c 296 art 1 s 8; 1977 c 409 s 12; 1979 c 272 s 6; 
 1983 c 123 s 1; 1991 c 165 s 2; 1993 c 324 s 1