Bill Text: OR SB413 | 2013 | Regular Session | Engrossed
Bill Title: Relating to health insurance rate review; declaring an emergency.
Spectrum: Partisan Bill (Democrat 16-0)
Status: (Enrolled - Dead) 2013-07-08 - In conference committee upon adjournment. [SB413 Detail]
Download: Oregon-2013-SB413-Engrossed.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1299
B-Engrossed
Senate Bill 413
Ordered by the House June 3
Including Senate Amendments dated March 28 and House Amendments
dated June 3
Sponsored by Senator SHIELDS; Senator EDWARDS (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Requires insurer offering health benefit plans to provide
annual notice to policyholders { - and certificate holders - }
of specified information about Department of Consumer and
Business Services' rate review process { - and consumer
advocacy unit - } . { + Requires insurers to provide
opportunity for enrollees to subscribe to electronic mailing list
for rate filings. + }
{ - Limits public comment period for premium rate filings by
individual, portability or small employer health insurers to
health benefit plans offered by those insurers. - }
{ + Requires department and Oregon Health Authority to
jointly develop standards and metrics for health insurers' cost
containment strategies and incorporate standards into premium
rate review process. Requires department and authority to
establish process for jointly expanding or refining cost
containment strategies that may be considered in reviewing rate
filings. Applies to rate filings for coverage beginning on or
after January 1, 2015.
Requires department to establish by rule, and using public
process, methodology for projecting medical cost trends for use
by insurers in calculating proposed rates. Requires department to
specify exceptions to use of methodology. Applies to rate filings
for coverage beginning on or after January 1, 2015. + }
Requires Director of Department of Consumer and Business
Services to post to website of department { - of Consumer and
Business Services - } detailed explanation for approval of any
health insurance rate filing that increases rates. Makes
consideration of certain criteria related to approval of such
rate increases mandatory.
Declares emergency, effective October 1, 2013.
A BILL FOR AN ACT
Relating to health insurance rate review; creating new
provisions; amending ORS 742.003, 743.018 and 743.019; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. Sections 2 and 3 of this 2013 Act are added to and
made a part of the Insurance Code.
SECTION 2. { + (1) The Department of Consumer and Business
Services and the Oregon Health Authority shall jointly develop
standards and metrics for evaluating health insurers' cost
containment strategies and shall incorporate the standards into
the premium rate approval process under ORS 743.018.
(2) In evaluating whether to approve a premium rate, the
department shall conduct a comprehensive review of the insurer's
cost containment and quality improvement strategies. The
comprehensive review shall include, but is not limited to:
(a) An evaluation of the insurer's strategies in key areas in
which evidence-based and experience-tested strategies are
available; and
(b) A determination of whether the insurer's strategies are
feasible, comprehensive and sufficient to contain costs and
improve quality.
(3) The department and the authority shall also establish a
process for jointly expanding or refining the cost containment
strategies that may be considered in reviewing a rate filing.
(4) In determining whether a proposed premium rate meets the
criteria of ORS 743.018, the department shall consider:
(a) An insurer's specific, quantifiable goals for reducing
upward trends in medical costs as well as the insurer's detailed
rationale for choosing those particular goals;
(b) Whether an insurer met or exceeded the goals for reducing
upward trends in medical costs set forth in its previous rate
filing for the same category of health plan; and
(c) If the insurer's upward trends in medical costs failed to
meet the goals, the insurer's assessment of the causes of failure
and the insurer's plans to improve cost containment performance
in the future.
(5) The department and the authority shall regularly report to
the appropriate interim committees of the Legislative Assembly on
their progress toward implementation of this section and on any
recommended legislative changes to improve the review of cost
containment strategies in the rate review process. + }
SECTION 3. { + (1) The Department of Consumer and Business
Services shall establish by rule a methodology for projecting
anticipated changes in medical costs. Insurers must apply the
methodology in calculating proposed premium rates. The
methodology shall include:
(a) The adoption of a rate of inflation or deflation in medical
costs projected from the current year to the year to which a rate
filing applies; and
(b) Exceptions to the rate of inflation or deflation adopted
under paragraph (a) of this subsection based on special factors
including, but not limited to:
(A) Unique characteristics of the policyholders or certificate
holders of a health benefit plan; or
(B) Utilization controls used in a health benefit plan that
would cause the rate of change in medical costs to vary from a
state average.
(2) An insurer is required to use the rate of inflation or
deflation established under subsection (1)(a) of this section
unless the insurer provides the department with compelling
evidence that the insurer qualifies for an exception adopted by
the department under subsection (1)(b) of this section.
(3) The department shall adopt the rate and the methodology
described in subsection (1) of this section using a public
process. The department shall convene a group that includes
actuaries and other relevant experts to advise the department in
the adoption of the rate and methodology. All proceedings
conducted and documents produced or considered under this section
are subject to open meetings and public records laws under ORS
192.410 to 192.505 and 192.610 to 192.690. + }
SECTION 4. ORS 743.019 is amended to read:
743.019. (1) When an insurer files { + for approval by the
Director of the Department of Consumer and Business Services + }
a schedule or table of premium rates for { + an + } individual,
portability or small employer health { - insurance under ORS
743.018 - } { + benefit plan as defined in ORS 743.730 + }, the
director { - of the Department of Consumer and Business
Services - } shall open a 30-day public comment period on the
rate filing that begins on the date the insurer files the
schedule or table of premium rates. The director shall post all
comments to the website of the Department of Consumer and
Business Services without delay.
{ + (2) Each calendar year, on a date prescribed by the
department that is designed to coincide with the rate filing
deadline for qualified health plans offered through the health
insurance exchange, an insurer that offers a health benefit plan
to an individual or to a small employer shall send a written
notice to the policyholders of the individual or small employer
health benefit plans that contains:
(a) Information about the rate review process in this state and
how to provide public comments and participate in public hearings
on rate filings;
(b) The address of the department's rate review website;
(c) Instructions for how to sign up to receive rate filing
notifications through the department's electronic mailing list;
and
(d) Instructions for how to receive rate filing notifications
in formats other than the department's electronic mailing list.
(3) All enrollment forms and renewal notices provided to
enrollees in individual or small employer health benefit plans
must include, in a prominent manner, information about:
(a) The rate review process in this state;
(b) The rate review website maintained by the department;
(c) Enrollees' right to participate in the rate review process;
and
(d) How to elect to receive rate filing notifications through
the department's electronic mailing list.
(4) Insurers offering individual or small employer health
benefit plans shall provide, in a prominent location on the
enrollment and renewal forms, an opportunity for enrollees to
elect to receive rate filing notifications through the
department's electronic mailing list system. Insurers shall
subscribe enrollees who elect to receive rate filing
notifications, using the department's electronic notification
system.
(5) All explanations of benefits and all printed marketing
materials, newsletters and communications with insurance brokers
from an insurer offering individual or small employer health
benefit plans must include the information described in
subsection (3)(a), (b) and (c) of this section. + }
{ - (2) - } { + (6) + } The director shall give written
notice to an insurer approving or disapproving a rate filing or,
with the written consent of the insurer, modifying a rate filing
submitted under ORS 743.018 no later than 10 business days after
the close of the public comment period. The notice shall comply
with the requirements of ORS 183.415.
{ + (7) If the director approves a rate filing that increases
rates above the rates previously approved by the director for an
individual or small employer health benefit plan, the director
shall make available on the department's website a detailed
explanation of how the increased rates:
(a) Meet standards described in ORS 743.018 (4) and (5); and
(b) Are not subject to disapproval under ORS 742.005. + }
SECTION 5. ORS 743.018 is amended to read:
743.018. (1) Except for group life and health insurance, and
except as provided in ORS 743.015, every insurer shall file with
the Director of the Department of Consumer and Business Services
all schedules and tables of premium rates for life and health
insurance to be used on risks in this state, and shall file any
amendments to or corrections of such schedules and tables.
Premium rates are subject to approval, disapproval or withdrawal
of approval by the director as provided in ORS 742.003, 742.005
and 742.007.
(2) Except as provided in ORS 743.737 and 743.760 and
subsection (3) of this section, a rate filing by a carrier for
any of the following health benefit plans subject to ORS 743.730
to 743.773 shall be available for public inspection immediately
upon submission of the filing to the director:
(a) Health benefit plans for small employers.
(b) Portability health benefit plans.
(c) Individual health benefit plans.
(3) The director may by rule:
(a) Specify all information a carrier must submit as part of a
rate filing under this section; and
(b) Identify the information submitted that will be exempt from
disclosure under this section because the information constitutes
a trade secret and would, if disclosed, harm competition.
(4) The director, after conducting an actuarial review of the
rate filing, may approve a proposed premium rate for a health
benefit plan for small employers or for an individual health
benefit plan if, in the director's discretion, the proposed rates
are:
(a) Actuarially sound;
(b) Reasonable and not excessive, inadequate or unfairly
discriminatory; and
(c) Based upon reasonable administrative expenses.
(5) In order to determine whether the proposed premium rates
for a health benefit plan for small employers or for an
individual health benefit plan are reasonable and not excessive,
inadequate or unfairly discriminatory, the director { - may - }
{ + shall + } consider:
(a) The insurer's financial position, including but not limited
to profitability, surplus, reserves and investment savings.
(b) Historical and projected administrative costs and medical
and hospital expenses { + using the methodology for projecting
anticipated changes in medical costs adopted by the Department of
Consumer and Business Services under section 3 of this 2013
Act + }.
(c) Historical and projected loss ratio between the amounts
spent on medical services and earned premiums.
(d) Any anticipated change in the number of enrollees if the
proposed premium rate is approved.
(e) Changes to covered benefits or health benefit plan design.
(f) Changes in the insurer's health care cost containment and
quality improvement efforts since the insurer's last rate filing
for the same category of health benefit plan.
(g) Whether the proposed change in the premium rate is
necessary to maintain the insurer's solvency or to maintain rate
stability and prevent excessive rate increases in the future.
(h) Any public comments received under ORS 743.019 pertaining
to the standards set forth in subsection (4) of this section and
this subsection.
(6) With the written consent of the insurer, the director may
modify a schedule or table of premium rates filed in accordance
with subsection (1) of this section.
(7) The requirements of this section do not supersede other
provisions of law that require insurers, health care service
contractors or multiple employer welfare arrangements providing
health insurance to file schedules or tables of premium rates or
proposed premium rates with the director or to seek the
director's approval of rates or changes to rates.
SECTION 6. ORS 742.003 is amended to read:
742.003. (1) Except where otherwise provided by law, no basic
policy form, or application form where written application is
required and is to be made a part of the policy, or rider,
indorsement or renewal certificate form shall be delivered or
issued for delivery in this state until the form has been filed
with and approved by the Director of the Department of Consumer
and Business Services. This section does not apply to:
(a) Forms of unique character which are designed for and used
with respect to insurance upon a particular risk or subject;
(b) Forms issued at the request of a particular life or health
insurance policy owner or certificate holder and which relate to
the manner of distribution of benefits or to the reservation of
rights and benefits thereunder;
(c) Forms of group life or health insurance policies, or both,
that have been agreed upon as a result of negotiations between
the policyholder and the insurer; or
(d) Forms complying with specific requirements regarding
delivery or issuance for delivery in this state established by
the director by rule.
(2) { + Except as provided for rate filings under ORS
743.019, + } the director shall within 30 days after the filing
of any { - such - } form approve or disapprove the form. The
director shall give written notice of { - such action - } { +
the approval or disapproval + } to the insurer proposing to
deliver { - such - } { + the + } form and when a form is
disapproved the notice shall { - show wherein such form - }
{ + explain why the form + } does not comply with the law.
(3) The 30-day period referred to in subsection (2) of this
section may be extended by the director for an additional period
not to exceed 30 days if the director gives written notice within
the first 30-day period to the insurer proposing to deliver the
form that the director needs { - such - } additional time for
the consideration of { - such - } { + the + } form.
(4) The director may at any time request an insurer to furnish
the director a copy of any form exempted under subsection (1) of
this section.
SECTION 7. { + Sections 2 and 3 of this 2013 Act apply to
premium rate filings for individual and small group health
benefit plan coverage beginning on or after January 1, 2015. + }
SECTION 8. { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect October 1,
2013. + }
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