Report Title:
Health Insurance Rates
Description:
Authorizes the Insurance Commissioner to approve or disapprove the rates of health insurers, including nonprofit medical indemnity and hospital service associations whether or not organized as mutual benefit societies, mutual benefit societies, and health maintenance organizations.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1371 |
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TWENTY-FIRST LEGISLATURE, 2001 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HEALTH INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that health insurance rates affect virtually all employers and workers in this state. Yet, unlike the rates of other types of insurance sold in Hawaii, health insurance rates are not subject to regulation by the state insurance commissioner. Rates may be excessive, and overburden employers and workers, or rates may be so inadequate that they threaten the ability of the insurer to cover the costs of claims. This was the case, recently, when an insurer who grossly undercharged for health insurance was placed in receivership by the insurance commissioner.
The purpose of this Act is to protect consumers of health insurance by authorizing the insurance commissioner to regulate health insurance rates.
SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 14 to be appropriately designated and to read as follows:
"§431:14- Medical or Health Insurance Rate Regulation. (a) Every health insurer, nonprofit medical indemnity or hospital service association, mutual benefit society, and health maintenance organization subject to regulation under part I, part II, or part III of article 10A of chapter 431, article 10H of chapter 431, article 1 of chapter 432, or chapter 432D, shall file with the commissioner:
(1) Health insurance agreements;
(2) Medical indemnity or hospital service association agreements;
(3) Subscription certificates; and
(4) Rates charged to subscribers.
Rates shall be filed within thirty days after their effective date.
(b) Rates shall be subject to disapproval by the commissioner if benefits provided are excessive, inadequate, or unfairly discriminatory. In disapproving any rate under this section, the commissioner shall determine whether such insurer or association employs a utilization review program and other techniques which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary.
(c) Except as otherwise provided by law, nothing in this section shall be construed to prohibit as unreasonable or unfairly discriminatory, the establishment of classifications or modifications of classifications of risks based upon size, expense, management, individual experience, purpose, location, or dispersion of hazard or any other reasonable considerations, or to prohibit retrospective refunds.
(d) All individual employers with fewer than ten employees in the same or similar line of business, profession, or trade shall be treated as a single group for purposes of establishing rates.
(e) The powers provided the commissioner under this section as well as the requirements imposed, shall be in addition to any other powers or requirements under applicable law."
SECTION 3. Section 431:14-102, Hawaii Revised Statutes, is amended to read as follows:
"§431:14-102 Scope. (a) This article shall apply to all classes, types, or forms of general casualty insurance as defined in section 431:1-209, surety insurance as defined in section 431:1-210, motor vehicle insurance, health insurance, including that provided by mutual benefit societies, nonprofit medical indemnity and hospital service associations, whether or not organized as mutual benefit societies, and health maintenance organizations, and workers' compensation and employers' liability insurance, on risks or operations in this State, and all classes, types, or forms of property insurance as defined in section 431:1-206, and marine and transportation insurance as defined in section 431:1-207, on risks located in this State. Inland marine insurance shall be deemed to include insurance now or hereafter defined as inland marine insurance by:
(1) Statute, or by interpretation thereof;
(2) Ruling of the commissioner, if not defined or interpreted; or
(3) By general custom of the business.
In this article, the terms inland marine insurance and marine insurance are used in their generally accepted trade meanings.
(b) This article shall not apply to:
(1) Reinsurance, other than joint reinsurance to the extent stated in section 431:14-112;
(2) Disability insurance[;] providing benefits for losses of income or losses other than hospital or medical treatment, supplies, and services;
(3) Insurance against loss or damage to aircraft or against liability, other than workers' compensation and employers' liability, arising out of the ownership, maintenance or use of aircraft;
(4) Insurance of vessels or craft, their cargoes, marine builder's risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies; and
(5) Insurance of hulls of aircraft, including their accessories and equipment, or against liability arising out of the ownership, maintenance or use of aircraft."
SECTION 4. Section 432:1-102, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Article 2 [and], article 13, and article 14 of chapter 431, and the powers there granted to the commissioner, shall apply to managed care plans, health maintenance organizations, or medical indemnity or hospital service associations, which are owned or controlled by mutual benefit societies, so long as such application in any particular case is in compliance with and is not preempted by applicable federal statutes or regulations."
SECTION 5. Chapter 432D, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) Article 2, [and] article 13, and article 14 of chapter 431, and the power there granted to the commissioner, shall apply to health maintenance organizations, so long as such application in any particular case is in compliance with and is not preempted by applicable federal statutes and regulations."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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