HB1362 Makes various changes in the health insurance pool.
Sponsor: Harlan, Tim (23) Effective Date:00/00/0000
CoSponsor: Treadway, Joseph L. (96) LR Number: 3311L.03C
Last Action: 05/01/2000 - SEE COMMENTS
PURSUANT TO RULE 47 BILL HAS BEEN DROPPED FROM
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HCS HB 1362
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Available Bill Summaries for HB1362 Copyright(c)
* Committee * Introduced

Available Bill Text for HB1362
* Committee * Introduced *

BILL SUMMARIES

COMMITTEE

HCS HB 1362 -- HEALTH INSURANCE

SPONSOR:  Harlan

COMMITTEE ACTION:  Voted "do pass" by the Committee on Critical
Issues by a vote of 18 to 3.

This substitute makes several changes to health insurance law.
In its major provisions, the substitute:

(1)  Establishes the Advisory Commission on Health Insurance
Mandates to be composed of the director of the Department of
Insurance, the chairperson of the Insurance Committee of the
House of Representatives, one member of the minority party of
the House of Representatives, the chairperson of the Insurance
and Housing Committee of the Senate, and one member of the
minority party of the Senate.  The commission is charged with
studying the costs and benefits of each health insurance benefit
or offer mandated by Missouri law.  The commission must report
by January 1, 2001, the results of its study to the Governor,
the Speaker of the House of Representatives, and the President
Pro Tem of the Senate;

(2)  Allows individuals to be eligible for coverage through the
Missouri Health Insurance Pool (also referred to as the "high
risk pool") if they have been refused coverage, offered coverage
at a rate exceeding 135% of the standard rate, or had coverage
for not less than 12 months.  The rate for coverage under the
pool is 135% of the standard rate for individuals who had
continuous coverage through a date not less than 63 days prior
to the effective date of pool coverage or who enroll during the
open enrollment period.  The rate for other eligible individuals
is 200% of the standard rate;

(3)  Modifies the Small Employer Health Insurance Availability
Act so that it complies with the federal Health Insurance
Portability and Accountability Act of 1996 (P.L. 104-191).  A
small employer employs 2 to 50 employees under the substitute's
revised provisions.  Small employer plans are allowed to apply
preexisting condition exclusions during the first 12 months of
coverage but are required to waive the exclusions for the period
of time that an individual has coverage continuous to a date not
less than 63 days prior to obtaining the new coverage.  The
exclusion must also be waived if the individual's prior coverage
is for a period of 12 of the most recent 18 months.  Insurers
may discontinue offering a plan under certain conditions.  No
preexisting condition exclusions are allowed relating to
pregnancy or a condition for which medical advice was received
during a period when the person had qualifying coverage.  The
substitute also removes from the act language that requires a
husband and wife working for the same small employer to be
considered one eligible employee;

(4)  Requires the Department of Insurance to administer a grant
program to assist in the establishment of health insurance
purchasing cooperatives.  Each grant is limited to $25,000.
Funds for the grants must be appropriated from general revenue
and the total amount of grants may not exceed $400,000; and

(5)  Prohibits insurance companies from requiring the purchase
of life insurance as a condition of purchasing health insurance.

The substitute also includes several provisions with an
effective date of July 1, 2001.  Those provisions:

(1)  Require insurers to issue individual policies of health
insurance without medical underwriting if the applicant had
prior creditable coverage which was terminated within 63 days
prior to the application, the period of creditable coverage is
not less than 12  months, and the individual has exhausted any
COBRA coverage.  An insurer is not required to issue individual
health benefit coverage without medical underwriting when such
plans constitute 2% or more of that insurer's earned premium on
an annual basis from individual health plans.  The substitute
also includes several rating restrictions for individual health
insurance policies;

(2)  Establish an individual health benefit reinsurance
association and require all entities providing health insurance
or health benefits subject to state insurance regulation to be
members of the association.  Those entities that provide plans
only for Medicaid recipients are exempted from membership.  The
association's board is responsible for developing a plan to
provide for the sharing of losses related to individuals
enrolled in health plans without medical underwriting.  Board
members are immune from civil liability for performing duties
required by the substitute's provisions;

(3)  Allow entities issuing individual health insurance policies
to apply preexisting condition exclusions during the first 12
months of coverage but are required to waive the exclusions for
the period of time that an individual has coverage continuous to
a date not less than 63 days prior to obtaining new coverage; and

(4)  Require health insurers to follow certain procedures if
they close a block of business.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$1,012,064 to $4,217,273 in FY 2001, $1,221,952 to $7,205,822 in
FY 2002, and $1,235,897 to $8,631,772 in FY 2003.  Estimated Net
Loss to County Foreign Insurance Fund of $623,233 to $3,828,442
in FY 2001, $124,647 to $2,903,308 in FY 2002, and $0 to
$664,125 in FY 2003.

PROPONENTS:  Supporters say that legislation is needed to
facilitate access to affordable health care insurance.  Many
self-employed individuals and those working for small businesses
are unable to obtain health insurance at affordable rates once
they file claims or develop health risks.  Because many
individuals are able to obtain insurance only through employment
with a large business or the government, they are unable to
start a small business or remain employed by a small business
such as a family farm.  This substitute includes rating reforms
that allow people who have been insured for years to be able to
continue to afford health insurance when they develop health
risks.  The substitute's reforms also allow uninsured people to
obtain more affordable insurance rates.  In addition, the
substitute includes risk-sharing protections for losses by
insurers.

Testifying for the bill were Representative Harlan; Speaker Gaw;
Representatives Shields, Treadway, and Froelker; Dana Murray;
Jared England; Missouri Association of Realtors; American
Association of Retired Persons; Branson Chamber of Commerce;
National Federation of Independent Business; American Family
Insurance; Paraquad, Inc.- St. Louis; Missouri State
Chiropractors Association; Missouri Optometric Association;
Missouri Association of Osteopathic Physicians and Surgeons; and
Governor's Council on Disability.

OPPONENTS:  Those who oppose the bill say that the bill's rate
reforms and provisions guaranteeing the issue of health
insurance policies will be too costly for insurers which will
force them to discontinue writing policies in Missouri.  Also,
the reforms will increase the rates of currently insured
individuals which will cause many of them to terminate their
health insurance coverage.  Reforming the practices of the
insurance industry will not allow more individuals access to
affordable health insurance because the problem of affordable
coverage is caused by the rapidly increasing costs of health
care.

Testifying against the bill were Brent Speight; Missouri Health
Underwriters; Blue Cross/Blue Shield of St. Louis; Missouri
Association of Health Plans; Health Insurance Association of
America; Humana; Missouri Chamber of Commerce; Golden Rule
Insurance; Kaiser Permanente; General American Life Insurance
Co.; and Missouri Insurance Coalition.

Katharine Barondeau, Legislative Analyst


INTRODUCED

HB 1362 -- Health Insurance

Co-Sponsors:  Harlan, Treadway, Gaw, Foley, Crump, Froelker,
Backer, Leake, Dolan, Levin, Shields, Dougherty

This bill makes several changes to health insurance law.  In its
major provisions, the bill:

(1)  Establishes the Advisory Commission on Health Insurance
Mandates to be composed of the director of the Department of
Insurance, the chairperson of the Insurance Committee of the
House of Representatives, one member of the minority party of
the House of Representatives, the chairperson of the Insurance
and Housing Committee of the Senate, and one member of the
minority party of the Senate.  The commission is charged with
studying the costs and benefits of each health insurance benefit
or offer mandated by Missouri law.  The commission must report
by January 1, 2001, the results of its study to the Governor,
the Speaker of the House of Representatives, and the President
Pro Tem of the Senate;

(2)  Allows individuals to be eligible for coverage through the
Missouri Health Insurance Pool (also referred to as the "high
risk pool") if they have been refused coverage, offered coverage
at a rate exceeding 135% of the standard rate, or had coverage
for not less than 12 months.  The rate for coverage under the
pool is 135% of the standard rate for individuals who had
continuous coverage through a date not less than 63 days prior
to the effective date of pool coverage or who enroll during the
open enrollment period.  The rate for other eligible individuals
is 200% of the standard rate;

(3)  Modifies the Small Employer Health Insurance Availability
Act so that it complies with the federal Health Insurance
Portability and Accountability Act of 1996 (P.L. 104-191).  A
small employer employs 2 to 50 employees under the bill's
revised provisions.  Small employer plans are allowed to apply
preexisting condition exclusions during the first 12 months of
coverage but are required to waive the exclusions for the period
of time that an individual has coverage continuous to a date not
less than 63 days prior to obtaining the new coverage.  The
exclusion must also be waived if the individual's prior coverage
is for a period of 12 of the most recent 18 months.  Insurers
may discontinue offering a plan under certain conditions.  No
preexisting condition exclusions are allowed relating to
pregnancy or a condition for which medical advice was received
during a period when the person had qualifying coverage.  The
bill also removes from the act language that requires a husband
and wife working for the same small employer to be considered
one eligible employee;

(4)  Requires the Department of Insurance to administer a grant
program to assist in the establishment of health insurance
purchasing cooperatives.  Each grant is limited to $25,000.
Funds for the grants must be appropriated from general revenue
and the total amount of grants may not exceed $400,000; and

(5)  Prohibits insurance companies from requiring the purchase
of life insurance as a condition of purchasing health insurance.

The bill also includes several provisions with an effective date
of July 1, 2001.  Those provisions:

(1)  Require insurers to issue individual policies of health
insurance without medical underwriting if the applicant had
prior creditable coverage which was terminated within 63 days
prior to the application, the period of creditable coverage is
not less than 12  months, and the individual has exhausted any
COBRA coverage.  An insurer is not required to issue individual
health benefit coverage without medical underwriting when such
plans constitute 2% or more of that insurer's earned premium on
an annual basis from individual health plans.  The bill also
includes several rating restrictions for individual health
insurance policies;

(2)  Establish an individual health benefit reinsurance
association and require all entities providing health insurance
or health benefits subject to state insurance regulation to be
members of the association.  Those entities that provide plans
only for Medicaid recipients are exempted from membership.  The
association's board is responsible for developing a plan to
provide for the sharing of losses related to individuals
enrolled in health plans without medical underwriting.  Board
members are immune from civil liability for performing duties
required by the bill's provisions;

(3)  Allow entities issuing individual health insurance policies
to apply preexisting condition exclusions during the first 12
months of coverage but are required to waive the exclusions for
the period of time that an individual has coverage continuous to
a date not less than 63 days prior to obtaining new coverage; and

(4)  Require health insurers to follow certain procedures if
they close a block of business.


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