Bill Text: MN SF1910 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Minnesota comprehensive health association (MCHA) premium rate setting process flexibility authorization
Spectrum: Moderate Partisan Bill (Republican 4-1)
Status: (Introduced - Dead) 2012-04-04 - HF substituted on Calendar HF2216 [SF1910 Detail]
Download: Minnesota-2011-SF1910-Engrossed.html
1.2relating to insurance; the Minnesota Comprehensive Health Association;
1.3permitting flexibility in premium rate-setting process; permitting closing
1.4enrollment in two plans;amending Minnesota Statutes 2010, sections 62E.08,
1.5subdivisions 1, 3; 62E.091; 62E.12.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 62E.08, subdivision 1, is amended to read:
1.8 Subdivision 1. Establishment. The association shall establish the following
1.9maximum premiums to be charged for membership in the comprehensive health insurance
1.10plan:
1.11(a) the premium for the number one qualified plan shall range from a minimum of
1.12101 percent to a maximum of 125 percent of the weighted average of rates charged by
1.13those insurers and health maintenance organizations with individuals enrolled in:
1.14(1) $1,000 annual deductible individual plans of insurance in force in Minnesota;
1.15(2) individual health maintenance organization contracts of coverage with a $1,000
1.16annual deductible which are in force in Minnesota; and
1.17(3) other plans of coverage similar to plans offered by the association based on
1.18generally accepted actuarial principles;
1.19(b) the premium for the number two qualified plan shall range from a minimum of
1.20101 percent to a maximum of 125 percent of the weighted average of rates charged by
1.21those insurers and health maintenance organizations with individuals enrolled in:
1.22(1) $500 annual deductible individual plans of insurance in force in Minnesota;
1.23(2) individual health maintenance organization contracts of coverage with a $500
1.24annual deductible which are in force in Minnesota; and
2.1(3) other plans of coverage similar to plans offered by the association based on
2.2generally accepted actuarial principles;
2.3(c) the premiums for the plans with a $2,000, $5,000, or $10,000 annual deductible
2.4shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted
2.5average of rates charged by those insurers and health maintenance organizations with
2.6individuals enrolled in:
2.7(1) $2,000, $5,000, or $10,000 annual deductible individual plans, respectively, in
2.8force in Minnesota; and
2.9(2) individual health maintenance organization contracts of coverage with a $2,000,
2.10$5,000, or $10,000 annual deductible, respectively, which are in force in Minnesota; or
2.11(3) other plans of coverage similar to plans offered by the association based on
2.12generally accepted actuarial principles;
2.13(d) the premium for each type of Medicare supplement plan required to be offered
2.14by the association pursuant to section62E.12 shall range from a minimum of 101 percent
2.15to a maximum of 125 percent of be determined by calculating and applying the weighted
2.16average ofrates charged by those insurers and the rate increases approved for the period
2.17for which the association premiums are to be effective for the three insurers or health
2.18maintenance organizations with the most individuals enrolled in:
2.19(1) Medicare supplement plans in force in Minnesota;
2.20(2) health maintenance organization Medicare supplement contracts of coverage
2.21which are in force in Minnesota;and or
2.22(3) other plans of coverage similar to plans offered by the association based on
2.23generally accepted actuarial principles; and
2.24(e) the charge for health maintenance organization coverage shall be based on
2.25generally accepted actuarial principles.
2.26The list of insurers and health maintenance organizations whose rates are used to
2.27establish the premium for coverage offered by the association pursuant to paragraphs (a)
2.28to (d) shall be established by the commissioner on the basis of information which shall be
2.29provided to the association by all insurers and health maintenance organizations annually
2.30at the commissioner's request. This information shall include the number of individuals
2.31covered by each type of plan or contract specified in paragraphs (a) to (d) that is sold,
2.32issued, and renewed by the insurers and health maintenance organizations, including those
2.33plans or contracts available only on a renewal basis. The information shall also include
2.34the rates charged for each type of plan or contract.
2.35In establishing premiums pursuant to this section, the association shall utilize
2.36generally accepted actuarial principles, provided that the association shall not discriminate
3.1in charging premiums based upon sex. In order to compute a weighted average for each
3.2type of plan or contract specified under paragraphs (a) to (d), the association shall, using
3.3the information collected pursuant to this subdivision, list insurers and health maintenance
3.4organizations in rank order of the total number of individuals covered by each insurer or
3.5health maintenance organization. The association shall then compute a weighted average
3.6of the rates charged for coverage by all the insurers and health maintenance organizations
3.7by:
3.8(1) multiplying the numbers of individuals covered by each insurer or health
3.9maintenance organization by the rates charged for coverage;
3.10(2) separately summing both the number of individuals covered by all the insurers
3.11and health maintenance organizations and all the products computed under clause (1); and
3.12(3) dividing the total of the products computed under clause (1) by the total number
3.13of individuals covered.
3.14The association may elect to use a sample of information from the insurers and
3.15health maintenance organizations for purposes of computing a weighted average. In no
3.16case, however, may a sample used by the association to compute a weighted average
3.17include information from fewer than the two insurers or health maintenance organizations
3.18highest in rank order.
3.19(f) Notwithstanding the provisions of this section, in calculating premiums to be
3.20effective January 1, 2014, and thereafter, the association may utilize rates for individual
3.21plans of insurance, individual health maintenance organization contracts, and other
3.22individual plans of coverage that are similar to plans offered by the association based upon
3.23generally accepted actuarial principles, so long as such plans and contracts have been filed
3.24with the Department of Commerce and are reasonably anticipated to be in force and
3.25individuals are reasonably anticipated to be enrolled in them during the period for which
3.26the association premiums are to be effective, regardless of whether they are in force in
3.27Minnesota or have individuals enrolled in them at the time the association is engaged in
3.28the rate-setting process mandated by this section and section 62E.091. For purposes of
3.29determining a weighted average under paragraph (e), the association shall use generally
3.30accepted actuarial principles to project potential enrollment in plans of coverage for the
3.31period for which the association's premiums will be effective and for which no individuals
3.32have enrolled at the time the association engages in the premium setting process.
3.33EFFECTIVE DATE.This section is effective the day following final enactment.
3.34 Sec. 2. Minnesota Statutes 2010, section 62E.08, subdivision 3, is amended to read:
4.1 Subd. 3. Determination of rates. Premium rates under this section must be
4.2determined annually. These rates are effective July 1 of each year and must be based on
4.3a survey of approved rates of insurers and health maintenance organizations in effect,
4.4or to be in effect, on April 1 of the same calendar year. These rates may be trended to
4.5July 1 the midpoint of the period for which the premium rates will apply in order to reflect
4.6economic and inflationary changes. Notwithstanding the provisions of this subdivision,
4.7the association may set rates to be effective for the 18-month period July 1, 2012, through
4.8December 31, 2013. For calendar years beginning January 1, 2014, and thereafter,
4.9premium rates shall be determined annually and effective January 1 of each year. Premium
4.10rates shall be prospective and trended forward to the midpoint of the period for which the
4.11premium rates apply to ensure that the association's rates are based upon individual market
4.12rates for insurers and health maintenance organizations that will be in effect during the
4.13period for which the association's rates will be effective.
4.14EFFECTIVE DATE.This section is effective the day following final enactment.
4.15 Sec. 3. Minnesota Statutes 2010, section 62E.091, is amended to read:
4.1662E.091 APPROVAL OF STATE PLAN PREMIUMS.
4.17The association shall submit to the commissioner any premiums it proposes to
4.18become effective for coverage under the comprehensive health insurance plan, pursuant
4.19to section62E.08, subdivision 3 . No later than 45 days before the effective date for
4.20premiums specified in section62E.08, subdivision 3 , the commissioner shall approve,
4.21modify, or reject the proposed premiums on the basis of the following criteria:
4.22(a) whether the association has complied with the provisions of section62E.11,
4.23subdivision 11 ;
4.24(b) whether the association has submitted the proposed premiums in a manner which
4.25provides sufficient time for individuals covered under the comprehensive insurance plan
4.26to receive notice of any premium increase no less than 30 days prior to the effective
4.27date of the increase;
4.28(c) the degree to which the association's computations and conclusions are consistent
4.29with section62E.08 ;
4.30(d) the degree to which any sample used to compute a weighted average by the
4.31association pursuant to section62E.08 reasonably reflects circumstances existing projected
4.32to exist in the private marketplace for individual coverage through the use of accepted
4.33actuarial principles during the period to which the association's rates will apply;
5.1(e) the degree to which a weighted average computed pursuant to section62E.08
5.2that uses information pertaining to individual coverage available only on a renewal basis
5.3reflects the circumstancesexisting projected to exist through the use of accepted actuarial
5.4principles, in the private marketplace for individual coverage during the period to which
5.5the association's rates will apply;
5.6(f) a comparison of the proposed increases with increases in the cost of medical
5.7care and increasesexperienced projected to occur through the use of accepted actuarial
5.8principles in the private marketplace for individual coverage during the period to which
5.9the association's rates will apply;
5.10(g) the financial consequences to enrollees of the proposed increase;
5.11(h) the actuarially projected effect of the proposed increase upon both total
5.12enrollment in, and the nature of the risks assumed by, the comprehensive health insurance
5.13plan;
5.14(i) the relative solvency of the contributing members; and
5.15(j) other factors deemed relevant by the commissioner.
5.16In no case, however, may the commissioner approve premiums for those plans of
5.17coverage described in section62E.08, subdivision 1 , paragraphs (a) to (d), that are lower
5.18than 101 percent or greater than 125 percent of the weighted averages computed by the
5.19association pursuant to section62E.08 . The commissioner shall support a decision to
5.20approve, modify, or reject any premium proposed by the association with written findings
5.21and conclusions addressing each criterion specified in this section. If the commissioner
5.22does not approve, modify, or reject the premiums proposed by the association sooner than
5.2345 days before the effective date for premiums specified in section62E.08, subdivision 3 ,
5.24the premiums proposed by the association under this section become effective.
5.25EFFECTIVE DATE.This section is effective the day following final enactment.
5.26 Sec. 4. Minnesota Statutes 2010, section 62E.12, is amended to read:
5.2762E.12 MINIMUM BENEFITS OF COMPREHENSIVE HEALTH
5.28INSURANCE PLAN.
5.29 (a) The association through its comprehensive health insurance plan shall offer
5.30policies which provide the benefits of a number one qualified plan and a number two
5.31qualified plan, except that the maximum lifetime benefit on these plans shall be $5,000,000;
5.32and an extended basic Medicare supplement plan and a basic Medicare supplement plan
5.33as described in sections62A.3099 to
62A.44 . The association may also offer a plan that
5.34is identical to a number one and number two qualified plan except that it has a $2,000
6.1annual deductible and a $5,000,000 maximum lifetime benefit. The association, subject to
6.2the approval of the commissioner, may also offer plans that are identical to the number
6.3one or number two qualified plan, except that they have annual deductibles of $5,000 and
6.4$10,000, respectively; have limitations on total annual out-of-pocket expenses equal to
6.5those annual deductibles and therefore cover 100 percent of the allowable cost of covered
6.6services in excess of those annual deductibles; and have a $5,000,000 maximum lifetime
6.7benefit. The association, subject to approval of the commissioner, may also offer plans
6.8that meet all other requirements of state law except those that are inconsistent with high
6.9deductible health plans as defined in sections 220 and 223 of the Internal Revenue Code
6.10and supporting regulations. As of January 1, 2006, the association shall no longer be
6.11required to offer an extended basic Medicare supplement plan.
6.12 (b) The requirement that a policy issued by the association must be a qualified plan
6.13is satisfied if the association contracts with a preferred provider network and the level of
6.14benefits for services provided within the network satisfies the requirements of a qualified
6.15plan. If the association uses a preferred provider network, payments to nonparticipating
6.16providers must meet the minimum requirements of section72A.20, subdivision 15 .
6.17 (c) The association shall offer health maintenance organization contracts in those
6.18areas of the state where a health maintenance organization has agreed to make the
6.19coverage available and has been selected as a writing carrier.
6.20 (d) Notwithstanding the provisions of section62E.06 and unless those charges
6.21are billed by a provider that is part of the association's preferred provider network, the
6.22state plan shall exclude coverage of services of a private duty nurse other than on an
6.23inpatient basis and any charges for treatment in a hospital or other inpatient facility located
6.24outside of the state of Minnesota in which the covered person is receiving treatment for a
6.25mental or nervous disorder, unless similar treatment for the mental or nervous disorder is
6.26medically necessary, unavailable in Minnesota and provided upon referral by a licensed
6.27Minnesota medical practitioner.
6.28(e) Notwithstanding the provisions of this section, the association may cease offering
6.29a number one qualified plan and a number two qualified plan on or after January 1, 2013.
6.30EFFECTIVE DATE.This section is effective the day following final enactment.
1.3permitting flexibility in premium rate-setting process; permitting closing
1.4enrollment in two plans;amending Minnesota Statutes 2010, sections 62E.08,
1.5subdivisions 1, 3; 62E.091; 62E.12.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 62E.08, subdivision 1, is amended to read:
1.8 Subdivision 1. Establishment. The association shall establish the following
1.9maximum premiums to be charged for membership in the comprehensive health insurance
1.10plan:
1.11(a) the premium for the number one qualified plan shall range from a minimum of
1.12101 percent to a maximum of 125 percent of the weighted average of rates charged by
1.13those insurers and health maintenance organizations with individuals enrolled in:
1.14(1) $1,000 annual deductible individual plans of insurance in force in Minnesota;
1.15(2) individual health maintenance organization contracts of coverage with a $1,000
1.16annual deductible which are in force in Minnesota; and
1.17(3) other plans of coverage similar to plans offered by the association based on
1.18generally accepted actuarial principles;
1.19(b) the premium for the number two qualified plan shall range from a minimum of
1.20101 percent to a maximum of 125 percent of the weighted average of rates charged by
1.21those insurers and health maintenance organizations with individuals enrolled in:
1.22(1) $500 annual deductible individual plans of insurance in force in Minnesota;
1.23(2) individual health maintenance organization contracts of coverage with a $500
1.24annual deductible which are in force in Minnesota; and
2.1(3) other plans of coverage similar to plans offered by the association based on
2.2generally accepted actuarial principles;
2.3(c) the premiums for the plans with a $2,000, $5,000, or $10,000 annual deductible
2.4shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted
2.5average of rates charged by those insurers and health maintenance organizations with
2.6individuals enrolled in:
2.7(1) $2,000, $5,000, or $10,000 annual deductible individual plans, respectively, in
2.8force in Minnesota; and
2.9(2) individual health maintenance organization contracts of coverage with a $2,000,
2.10$5,000, or $10,000 annual deductible, respectively, which are in force in Minnesota; or
2.11(3) other plans of coverage similar to plans offered by the association based on
2.12generally accepted actuarial principles;
2.13(d) the premium for each type of Medicare supplement plan required to be offered
2.14by the association pursuant to section
2.15
2.16average of
2.17for which the association premiums are to be effective for the three insurers or health
2.18maintenance organizations with the most individuals enrolled in:
2.19(1) Medicare supplement plans in force in Minnesota;
2.20(2) health maintenance organization Medicare supplement contracts of coverage
2.21which are in force in Minnesota;
2.22(3) other plans of coverage similar to plans offered by the association based on
2.23generally accepted actuarial principles; and
2.24(e) the charge for health maintenance organization coverage shall be based on
2.25generally accepted actuarial principles.
2.26The list of insurers and health maintenance organizations whose rates are used to
2.27establish the premium for coverage offered by the association pursuant to paragraphs (a)
2.28to (d) shall be established by the commissioner on the basis of information which shall be
2.29provided to the association by all insurers and health maintenance organizations annually
2.30at the commissioner's request. This information shall include the number of individuals
2.31covered by each type of plan or contract specified in paragraphs (a) to (d) that is sold,
2.32issued, and renewed by the insurers and health maintenance organizations, including those
2.33plans or contracts available only on a renewal basis. The information shall also include
2.34the rates charged for each type of plan or contract.
2.35In establishing premiums pursuant to this section, the association shall utilize
2.36generally accepted actuarial principles, provided that the association shall not discriminate
3.1in charging premiums based upon sex. In order to compute a weighted average for each
3.2type of plan or contract specified under paragraphs (a) to (d), the association shall, using
3.3the information collected pursuant to this subdivision, list insurers and health maintenance
3.4organizations in rank order of the total number of individuals covered by each insurer or
3.5health maintenance organization. The association shall then compute a weighted average
3.6of the rates charged for coverage by all the insurers and health maintenance organizations
3.7by:
3.8(1) multiplying the numbers of individuals covered by each insurer or health
3.9maintenance organization by the rates charged for coverage;
3.10(2) separately summing both the number of individuals covered by all the insurers
3.11and health maintenance organizations and all the products computed under clause (1); and
3.12(3) dividing the total of the products computed under clause (1) by the total number
3.13of individuals covered.
3.14The association may elect to use a sample of information from the insurers and
3.15health maintenance organizations for purposes of computing a weighted average. In no
3.16case, however, may a sample used by the association to compute a weighted average
3.17include information from fewer than the two insurers or health maintenance organizations
3.18highest in rank order.
3.19(f) Notwithstanding the provisions of this section, in calculating premiums to be
3.20effective January 1, 2014, and thereafter, the association may utilize rates for individual
3.21plans of insurance, individual health maintenance organization contracts, and other
3.22individual plans of coverage that are similar to plans offered by the association based upon
3.23generally accepted actuarial principles, so long as such plans and contracts have been filed
3.24with the Department of Commerce and are reasonably anticipated to be in force and
3.25individuals are reasonably anticipated to be enrolled in them during the period for which
3.26the association premiums are to be effective, regardless of whether they are in force in
3.27Minnesota or have individuals enrolled in them at the time the association is engaged in
3.28the rate-setting process mandated by this section and section 62E.091. For purposes of
3.29determining a weighted average under paragraph (e), the association shall use generally
3.30accepted actuarial principles to project potential enrollment in plans of coverage for the
3.31period for which the association's premiums will be effective and for which no individuals
3.32have enrolled at the time the association engages in the premium setting process.
3.33EFFECTIVE DATE.This section is effective the day following final enactment.
3.34 Sec. 2. Minnesota Statutes 2010, section 62E.08, subdivision 3, is amended to read:
4.1 Subd. 3. Determination of rates. Premium rates under this section must be
4.2determined annually. These rates are effective July 1 of each year and must be based on
4.3a survey of approved rates of insurers and health maintenance organizations in effect,
4.4or to be in effect, on April 1 of the same calendar year. These rates may be trended to
4.5
4.6economic and inflationary changes. Notwithstanding the provisions of this subdivision,
4.7the association may set rates to be effective for the 18-month period July 1, 2012, through
4.8December 31, 2013. For calendar years beginning January 1, 2014, and thereafter,
4.9premium rates shall be determined annually and effective January 1 of each year. Premium
4.10rates shall be prospective and trended forward to the midpoint of the period for which the
4.11premium rates apply to ensure that the association's rates are based upon individual market
4.12rates for insurers and health maintenance organizations that will be in effect during the
4.13period for which the association's rates will be effective.
4.14EFFECTIVE DATE.This section is effective the day following final enactment.
4.15 Sec. 3. Minnesota Statutes 2010, section 62E.091, is amended to read:
4.1662E.091 APPROVAL OF STATE PLAN PREMIUMS.
4.17The association shall submit to the commissioner any premiums it proposes to
4.18become effective for coverage under the comprehensive health insurance plan, pursuant
4.19to section
4.20premiums specified in section
4.21modify, or reject the proposed premiums on the basis of the following criteria:
4.22(a) whether the association has complied with the provisions of section
4.23subdivision 11
4.24(b) whether the association has submitted the proposed premiums in a manner which
4.25provides sufficient time for individuals covered under the comprehensive insurance plan
4.26to receive notice of any premium increase no less than 30 days prior to the effective
4.27date of the increase;
4.28(c) the degree to which the association's computations and conclusions are consistent
4.29with section
4.30(d) the degree to which any sample used to compute a weighted average by the
4.31association pursuant to section
4.32to exist in the private marketplace for individual coverage through the use of accepted
4.33actuarial principles during the period to which the association's rates will apply;
5.1(e) the degree to which a weighted average computed pursuant to section
5.2that uses information pertaining to individual coverage available only on a renewal basis
5.3reflects the circumstances
5.4principles, in the private marketplace for individual coverage during the period to which
5.5the association's rates will apply;
5.6(f) a comparison of the proposed increases with increases in the cost of medical
5.7care and increases
5.8principles in the private marketplace for individual coverage during the period to which
5.9the association's rates will apply;
5.10(g) the financial consequences to enrollees of the proposed increase;
5.11(h) the actuarially projected effect of the proposed increase upon both total
5.12enrollment in, and the nature of the risks assumed by, the comprehensive health insurance
5.13plan;
5.14(i) the relative solvency of the contributing members; and
5.15(j) other factors deemed relevant by the commissioner.
5.16In no case, however, may the commissioner approve premiums for those plans of
5.17coverage described in section
5.18than 101 percent or greater than 125 percent of the weighted averages computed by the
5.19association pursuant to section
5.20approve, modify, or reject any premium proposed by the association with written findings
5.21and conclusions addressing each criterion specified in this section. If the commissioner
5.22does not approve, modify, or reject the premiums proposed by the association sooner than
5.2345 days before the effective date for premiums specified in section
5.24the premiums proposed by the association under this section become effective.
5.25EFFECTIVE DATE.This section is effective the day following final enactment.
5.26 Sec. 4. Minnesota Statutes 2010, section 62E.12, is amended to read:
5.2762E.12 MINIMUM BENEFITS OF COMPREHENSIVE HEALTH
5.28INSURANCE PLAN.
5.29 (a) The association through its comprehensive health insurance plan shall offer
5.30policies which provide the benefits of a number one qualified plan and a number two
5.31qualified plan, except that the maximum lifetime benefit on these plans shall be $5,000,000;
5.32and an extended basic Medicare supplement plan and a basic Medicare supplement plan
5.33as described in sections
5.34is identical to a number one and number two qualified plan except that it has a $2,000
6.1annual deductible and a $5,000,000 maximum lifetime benefit. The association, subject to
6.2the approval of the commissioner, may also offer plans that are identical to the number
6.3one or number two qualified plan, except that they have annual deductibles of $5,000 and
6.4$10,000, respectively; have limitations on total annual out-of-pocket expenses equal to
6.5those annual deductibles and therefore cover 100 percent of the allowable cost of covered
6.6services in excess of those annual deductibles; and have a $5,000,000 maximum lifetime
6.7benefit. The association, subject to approval of the commissioner, may also offer plans
6.8that meet all other requirements of state law except those that are inconsistent with high
6.9deductible health plans as defined in sections 220 and 223 of the Internal Revenue Code
6.10and supporting regulations. As of January 1, 2006, the association shall no longer be
6.11required to offer an extended basic Medicare supplement plan.
6.12 (b) The requirement that a policy issued by the association must be a qualified plan
6.13is satisfied if the association contracts with a preferred provider network and the level of
6.14benefits for services provided within the network satisfies the requirements of a qualified
6.15plan. If the association uses a preferred provider network, payments to nonparticipating
6.16providers must meet the minimum requirements of section
6.17 (c) The association shall offer health maintenance organization contracts in those
6.18areas of the state where a health maintenance organization has agreed to make the
6.19coverage available and has been selected as a writing carrier.
6.20 (d) Notwithstanding the provisions of section
6.21are billed by a provider that is part of the association's preferred provider network, the
6.22state plan shall exclude coverage of services of a private duty nurse other than on an
6.23inpatient basis and any charges for treatment in a hospital or other inpatient facility located
6.24outside of the state of Minnesota in which the covered person is receiving treatment for a
6.25mental or nervous disorder, unless similar treatment for the mental or nervous disorder is
6.26medically necessary, unavailable in Minnesota and provided upon referral by a licensed
6.27Minnesota medical practitioner.
6.28(e) Notwithstanding the provisions of this section, the association may cease offering
6.29a number one qualified plan and a number two qualified plan on or after January 1, 2013.
6.30EFFECTIVE DATE.This section is effective the day following final enactment.
