97S2 HB3 HB 3/FN/LM (BR 10) - R. Damron, B. DeWeese

     AN ACT relating to health insurance and declaring an emergency.
     Create new sections of Subtitle 17A of KRS Chapter 304, the insurance code, to make health insurance policies issued or renewed after January 1, 1998, comply with federal law provisions on guaranteed issue, guaranteed renewability, and pre-existing conditions; permit health insurers that previously ceased doing business in Kentucky to return to the insurance market in Kentucky; direct the commissioner to define one standard health benefit plan which must be offered by all insurers doing business in the individual and small group markets; require a benefits comparison be delivered to prospective applicants for individual and small group coverage that compares the standard plan to the plan being offered the applicant; prohibit an insurer from representing that a provider is a member of the insurer network of providers unless the provider has agreed to it in writing or there is a written contract between insurer and provider or an agreement by the provider to abide by terms for participation established by the insurer; require health insurers to file premium and classification rates with the commissioner and the Attorney General before use; allow premium rates to be based on any factor deemed necessary by the insurer; prohibit use of rates the commissioner determines are unreasonable; provide that rates may be used upon filing; permit the commissioner to hold a hearing within forty-five days after filing; require the commissioner to hold a hearing upon written request of the Attorney General; require rates to be guaranteed for 12 months or the contract period, whichever is longer; amend KRS 304.17A-080, 304.17A-135, 304.17A-140, 304.17A-145, and 304.17A-170 to conform; create a new section of KRS Chapter 6 to require a financial impact statement to be filed with a standing committee of the General Assembly for any bill or amendment that contains a mandated health benefit; amend KRS 304.18-050 to delete the exemption from community rating provided to associations; provide that premium rates for individuals with similar case characteristics for same coverage cannot vary from the index rate by more than 35 percent of the index rate; provide rating methodology for percentage increase in premium rates charged to an individual for a new rating period; provide rating methodology for plans issued to individuals with high-cost conditions from July 15, 1995, until the effective date of this Act; provide that premium rates for small groups with similar case characteristics for the similar coverage cannot vary from the index rate by more than 25 percent of the index rate; provide rating methodology for percentage increase in premium rates charged to small groups for a new rating period; prohibit use of case characteristics other than age, gender, occupation or industry, geographic area, family composition, and group size without prior approval of the commissioner; provide that the ratio of the highest rate factor to the lowest rate factor within a class of business cannot exceed 5 to 1; allow commissioner to approve additional classes of business; prohibit rate adjustments for claims experience, health status, and duration of coverage for an individual group member or his dependents; create a new section of Subtitle 17A of KRS Chapter 304 to require plans in the group market segment to be guaranteed issued; permit an insurer to refuse issuance of group coverage if the network plan lacks capacity; permit an insurer to refuse to issue group coverage to an applicant if the plan lacks necessary financial reserves; require a group plan to allow an individual or individual's dependents who are eligible to enroll for coverage in accordance with administrative regulations; provide for the regulation of rates of employer organized association health plans; create new sections of Subtitle 17A of KRS Chapter 304 to create the Kentucky Guaranteed Issue Funding Program; require the program to be operational by January 1, 1998; establish duties and responsibilities of the program; permit health insurers to elect to participate in providing health insurance coverage to individuals with high-cost conditions under the program; create the Kentucky Safety Net portion of the program to be available on a guaranteed issue basis for certain persons with a high-cost condition; permit insurers to charge a premium for high-cost policies that is 150 percent of the premium that could be charged for an identical policy with identical benefits issued to the same policyholder without a high-cost condition; allow commissioner to permit a premium of 200 percent for good cause shown; require annual reporting to commissioner and the program by insurers; require commissioner at end of calendar year to calculate and provide to each insurer who filed a report certain information including the amount of the insurer's assessment or refund; require the Health Insurance Advisory Council to review list of high-cost conditions and make recommendations to the commissioner; require each reinsurer to pay an assessment to the program in the amount of two dollars for each one hundred dollars in reinsurance premiums; allow any insurer that participates in the program a credit in the amount of the insurer's assessment less any refund against state premium taxes; amend KRS 304.2-310 to conform; create new sections of Subtitle 17A of KRS Chapter 304 to prohibit persons who are not state employees from purchasing or renewing policies available to state employees; require an insurer to disclose certain information to enrollees at the time of enrollment and upon request thereafter; require additional disclosures for managed care plans; require managed care plans to arrange for a sufficient number of primary care providers, telephone access, and reasonable standards for waiting times; establish provisions for right to use specialists and continuity of care; establish procedure for termination of providers and prohibit gag rules; require drug utilization review program; require quality assurance or improvement standards; establish a patient's right of privacy in the content of the patient's record and communications between patient and provider as to mental health and chemical dependency; prohibit an insurance contract from containing a most-favored-nation provision unless the commissioner determines the market share of the insurer is nominal; amend KRS 304.14-120, and 304.38-200 to conform; repeal KRS 304.17-380, 304.17-383, 304.17A-010, 304.17A-020, 304.17A-030, 304.17A-040, 304.17A-050, 304.17A-060, 304.17A-070, 304.17A-090, 304.17A-095, 304.17A-100, 304.17A-110, 304.17A-120, 304.17A-130, 304.17A-150, 304.17A-160; EMERGENCY.

     Sep 30-introduced in House; to Appropriations and Revenue (H); posting waived

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