Affordable Health Bill

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SUMMARY

This initiated bill does the following.

Part A permits certain out-of-state health insurers, which are referred to as regional insurers in the bill, to offer their individual or group health plans for sale in this State if certain requirements of Maine law are met, including minimum capital and surplus and reserve requirements, disclosure and reporting requirements and grievance procedures. The bill defines the out-of-state health insurers as those insurers authorized to transact individual or group health insurance in one of the following states or jurisdictions: Connecticut, Massachusetts, New Hampshire, Rhode Island and Vermont. It also permits Maine health insurers to offer individual or group health plans of out-of-state parent or subsidiary health insurers if similar requirements are met. If out-of-state health plans are offered for sale in this State, the bill requires that prospective enrollees be provided adequate disclosure of how the plans differ from Maine health plans in a format approved by the Superintendent of Insurance.

Part B reforms the guaranteed issuance requirement in the individual health insurance market and creates the Comprehensive Guaranteed Access Health Insurance Association. The purpose of the association is to spread the cost of individuals not able to find coverage in the traditional individual market among all health insurers. The bill funds the association through an assessment on insurers. An individual insured through the association may be charged a premium up to 150% of the average premium rates charged by carriers for similar health insurance plans. The bill requires the State to submit an application to the Federal Government for federal assistance to create the association. While the statutory provisions establishing the Comprehensive Guaranteed Access Health Insurance Association are effective January 1, 2009, policies must be issued by the association no later than July 1, 2009. The provisions repealing guaranteed issuance become effective July 1, 2009 at the same time policies through the Comprehensive Guaranteed Access Health Insurance Association become available.

Part C permits individual health insurance carriers to forgo approval of premium rates if the carrier maintains a loss ratio of 68% over a continuous 36-month period. A carrier is still required to file rates with the Bureau of Insurance for informational purposes. Part C is effective July 1, 2009.

Part D broadens the community rating laws for individual and small group health plans. In the individual market, it allows a maximum rate differential for individual health plans on the basis of age, occupation or industry and geographic area of 4 to one and a maximum rate discount on the basis of health factors of up to 50%. In the small group market, Part D expands the community rating bands from 20% to 50% and permits a maximum rate discount on the basis of health factors and participation in wellness programs of up to 25%. Part D is effective July 1, 2009.

Part E repeals the savings offset payment, which under current law is used as a source of funding to support the subsidy program for Dirigo Choice enrollees and the Maine Quality Forum.

Part F repeals the statutory provisions governing the Capital Investment Fund and certificate of need.

Part G repeals the taxes imposed on hospitals, effective for tax years beginning on or after July 1, 2011.

Part H eliminates the premium tax on insurance companies with respect to health insurance and instead makes the income earned with respect to health insurance subject to the corporate income tax.

Part I requires the Department of Health and Human Services to make all interim MaineCare hospital settlements for hospital fiscal years ending in calendar year 2007 by October 15, 2010.

Part J provides a deduction from income for premiums paid for health insurance to the extent not paid for on a pretax basis through a payroll deduction program pursuant to federal law.

Part K puts a moratorium on the enactment of new laws for mandated health insurance benefits for 5 years until January 1, 2014.

Part L requires employers of 2 or more employees that offer a health insurance plan to adopt and maintain a payroll deduction plan that meets the requirements of the Internal Revenue Code Section 125 through which employees may purchase health insurance. Employers are not required to pay for or otherwise contribute to the cost of any health insurance purchased by their employees through the Section 125 plan.

Part M establishes an effective date for the bill of January 1, 2009 unless otherwise specified.