2015 -- S 0711

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LC001766

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO HEALTH INSURANCE - CATASTROPHIC HEALTH INSURANCE

     Introduced By: Senators Nesselbush, McCaffrey, Crowley, Pichardo, and Miller

     Date Introduced: March 18, 2015

     Referred To: Senate Health & Human Services

     (OHIC)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-62-13 of the General Laws in Chapter 42-62 entitled

"Catastrophic Health Insurance Plan Act" is hereby repealed.

     42-62-13. Rates charged. -- (a) The rates proposed to be charged or a rating formula

proposed to be used by any insurer or health maintenance organization under this section to

employers, the state or any political subdivision of the state, or individuals, shall be filed by the

insurer or health maintenance organization at the office of the director of business regulation.

This section does not apply to any entity subject to § 27-19-1 et seq., and/or § 27-20-1 et seq. The

rates proposed to be charged by those entities shall be governed by the provisions of § 27-19-1 et

seq., and/or § 27-20-1 et seq. Within sixty (60) days after receipt of the application, the director,

or the director's designee, may hold a hearing upon not less than ten (10) days' written notice

prior to the hearings. The notice shall contain a description of the rates proposed to be charged,

and a copy of the notice shall be sent to the applicant and to the consumer protection unit of the

department of attorney general. At any hearing held under this section, the applicant shall be

required to establish that the rates proposed to be charged or the rating formula proposed to be

used are consistent with the proper conduct of its business and with the interest of the public. Any

documents presented in support of a filing of proposed rates under this section shall be made

available for public examination at any time and place that the director may deem reasonable. The

director, or the director's designee, upon that hearing may administer oaths, examine and cross-

examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena

witnesses, compel their attendance and require the production of all books, papers, records,

correspondence, or other documents which he or she deems relevant. Any designee who shall

conduct a hearing pursuant to this section shall report his or her findings in writing to the director

within eighty (80) days of the filing with a recommendation for approval, disapproval, or

modification of the rates proposed to be charged by the applicant. The recommended decision

shall become part of the record. The director shall make and issue a decision not later than ten

(10) days following the issuance of the recommended decision or, if the director hears the

application without the appointment of a designee, as soon as is reasonably possible following the

completion of the hearing on the proposed rate change. The decision may approve, disapprove, or

modify the rates proposed to be charged by the applicant. Insurers requesting changes in rates

shall underwrite the reasonable expenses of the department of business regulation in connection

with the hearing, including any costs related to advertisements, stenographic reporting, and expert

witnesses fees. Notwithstanding any other provisions of law, the filing of proposed rates or a

rating formula and the holding and conduct of any hearings in connection with these proposed

rates or rating formula shall be pursuant to this section.

      (b) Whenever the term "designee" is used in this section, it shall mean a person who is

impartial, a member in good standing of the Rhode Island bar and a person who is sufficiently

acquainted with the rules of evidence as used in the superior court of the state so as to enable that

person to conduct a hearing as designee of the director. The reasonable per diem cost of the

designee as appointed by the director shall be paid by the insurers requesting changes in the rates.

     SECTION 2. Chapter 42-62 of the General Laws entitled "Catastrophic Health Insurance

Plan Act" is hereby amended by adding thereto the following section:

     42-62-13.2. Rates charged. -- (a) Filing of health insurance rates. The rates proposed to

be charged or a rating formula proposed to be used by any health insurer under this section to

employers, the state or any political subdivision of the state, or individuals, shall be filed by the

health insurer at the office of the health insurance commissioner. As used in this section, "health

insurer" means any entity that offers, issues or renews a "health benefit plan", as defined by §§

27-18-1.1(14), 27-19-1(6), and 27-20-1(16), or that offers, issues or renews "health benefits" as

defined by § 27-41-2(n). Notwithstanding any other provision of law, after April 1, 2015, the

filing and review of proposed rates or rating formulae, and the conduct of any hearings or public

meetings in connection with the proposed rates or rating formulae shall be pursuant to this

section.

     (b) Commissioner's review.

     (1) Within sixty (60) days after receipt of the application, the commissioner, or the

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commissioner's designee, may hold a hearing, in accordance with § 42-35-1 et seq., upon not less

than ten (10) days' written notice prior to the hearings. The notice shall contain a description of

the rates proposed to be charged, and a copy of the notice shall be sent to the applicant and to the

consumer protection unit of the department of attorney general. At any hearing held under this

section, the applicant shall be required to establish that the rates proposed to be charged or the

rating formula proposed to be used are consistent with the proper conduct of its business and with

the interest of the public. Any documents presented in support of a filing of proposed rates under

this section shall be made available for public examination at any time and place that the

commissioner may deem reasonable, subject to any privileges or limitation provided for by law.

The commissioner, or the commissioner's designee, upon that hearing may administer oaths,

examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the

power to subpoena witnesses, compel their attendance and require the production of all books,

papers, records, correspondence, or other documents which he or she deems relevant. Any

designee who shall conduct a hearing pursuant to this section shall report his or her findings in

writing to the commissioner within eighty (80) days of the filing with a recommendation for

approval, disapproval, or modification of the rates proposed to be charged by the applicant. The

recommended decision shall become part of the record. The commissioner shall make and issue a

decision not later than ten (10) days following the issuance of the recommended decision, unless

such time period is extended by the commissioner for good cause shown, or, if the commissioner

hears the application without the appointment of a designee, as soon as is reasonably possible

following the completion of the hearing on the proposed rate change. The commissioner's

decision may approve, disapprove, or modify the rates proposed to be charged by the applicant.

Insurers requesting changes in rates shall underwrite the reasonable expenses of the office of the

health insurance commissioner in connection with its review under this subsection, including any

costs related to advertisements, stenographic reporting, and expert witnesses' fees. Whenever the

term "designee" is used in subsection (b)(l) of this section, it shall mean a person who is

impartial, a member in good standing of the Rhode Island bar and a person who is sufficiently

acquainted with the rules of evidence as used in the superior court of the state so as to enable that

person to conduct a hearing as designee of the commissioner. The reasonable per diem cost of the

designee as appointed by the commissioner shall be paid by the health insurers requesting

changes in the rates.

      (2) If the commissioner does not conduct a hearing in accordance with subsection (b)(1)

of this section, the commissioner may hold one or more public meetings in accordance with

chapter 46 of title 42 upon not less than ten (10) days' written notice, for the purpose of providing

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consumers, employers, and other interested members of the public an opportunity to comment on

the health insurer's proposal. In connection with the commissioner's review under this subsection;

     (3) The health insurer shall be required to establish that the rates proposed to be charged

or the rating formulae proposed to be used are consistent with the proper conduct of its business

and with the interest of the public. Any documents presented in support of a filing of proposed

rates or rating formulae under this section shall be made available for public examination at any

time and place that the commissioner may deem reasonable, subject to any privileges or

limitations provided for by law. The commissioner's decision shall be made within ninety (90)

days of the health insurer's filing, unless extended by the commissioner for good cause shown.

The commissioner's decision may approve, disapprove, or modify the rates proposed to be

charged by the applicant. Health insurers requesting changes in rates or rating formulae shall

underwrite the reasonable rate review expenses of the office of the health insurance

commissioner.

     (c) Notwithstanding any other provisions of law, the filing of proposed rates or a rating

formula, the holding and conduct of any hearings in connection with such filing, and the

commissioner's review of such filing with or without a hearing shall be pursuant to this section.

     SECTION 3. Section 27-19-6 of the General Laws in Chapter 27-19 entitled "Nonprofit

Hospital Service Corporations" is hereby repealed.

     27-19-6. Rates charged subscribers -- Reserves. -- (a) Public hearings: - The rates

proposed to be charged or a rating formula proposed to be used by any corporation organized

under this chapter to employers, the state or any political subdivision of the state, or individuals,

shall be filed by the corporation at the office of the health insurance commissioner. Within sixty

(60) days after receipt of the application, the commissioner, or his or her designee shall hold a

hearing on all rates proposed for health insurance coverage offered in the individual market as

defined in § 27-18.5-2 upon not less than ten (10) days written notice prior to the hearing. With

regard to any other rates subject to the commissioner's jurisdiction the commissioner, or his or her

designee, may hold a hearing upon not less than ten (10) days written notice prior to the hearing.

The notice shall be published by the commissioner in a newspaper or newspapers having

aggregate general circulation throughout the state at least ten (10) days prior to the hearing. The

notice shall contain a description of the rates proposed to be charged and a copy of the notice

shall be sent to the applicant and to the department of the attorney general. In addition, the

applicant shall provide by mail, at least ten (10) days prior to the hearing, notice of the proposed

rate increase for health insurance coverage offered in the individual market as defined in § 27-

18.5-2 to all subscribers subject to the proposed rate increase.

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      (b) Filings with the Attorney General's Office: - The applicant shall provide a copy of

the filing on all rates proposed for health insurance coverage offered in the individual market as

defined in § 27-18.5-2 to the Insurance Advocacy Unit of the Attorney General's Office

simultaneously with the filing at the office of the health insurance commissioner.

      (c) Procedures: - At any hearing held under this section, the applicant shall be required to

establish that the rates proposed to be charged or the rating formula to be used are consistent with

the proper conduct of its business and with the interest of the public.

      Rates proposed to be charged by any corporation organized under this chapter shall be

sufficient to maintain total reserves in a dollar amount sufficient to pay claims and operating

expenses for not less than one month. Those reserves shall be computed as of each December

31st, and a report setting forth the computation shall be submitted to the commissioner together

with the corporation's Rhode Island annual statement to the commissioner. Any documents

presented in support of a filing of proposed rates under this section shall be made available for

inspection by any party entitled to participate in a hearing or admitted as an intervenor in a

hearing or such conditions as the commissioner may prescribe provided under this section at a

time and at a place as the commissioner may deem reasonable. The commissioner, or his or her

designee, upon the hearing, may administer oaths, examine and cross-examine witnesses, receive

oral and documentary evidence, and shall have the power to subpoena witnesses, compel their

attendance, and require the production of books, papers, records, correspondence, or other

documents which he or she deems relevant. The commissioner shall issue a decision as soon as is

reasonably possible following the completion of the hearing. The decision may approve,

disapprove, or modify the rates proposed to be charged by the applicant. Applicants requesting

changes in rates shall underwrite the reasonable expenses of the commissioner in connection with

the hearing, including any costs related to advertisements, stenographic reporting, and expert

witnesses fees.

      (d) The term "designee" as used in this section shall mean a person who is impartial, a

member in good standing of the Rhode Island bar and a person who is sufficiently acquainted

with the rules of evidence as used in the superior court of the state so as to enable that person to

conduct a hearing as designee of the commissioner. The reasonable per diem cost of the designee

as appointed by the commissioner shall be paid by the applicant requesting changes in the rates.

     SECTION 4. Section 27-20-6 of the General Laws in Chapter 27-20 entitled "Nonprofit

Medical Service Corporations" is hereby repealed.

     27-20-6. Rates charged subscribers -- Reserves -- Hearing by director. -- (a) Public

hearings: - The rates proposed to be charged or a rating formula proposed to be used by any

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corporation organized under this chapter to its subscribers, employers, the state or any political

subdivision of the state, or individuals, shall be filed by the corporation at the office of the health

insurance commissioner. Within sixty (60) days after receipt of the application, the

commissioner, or his or her designee, shall hold a hearing on all rates proposed for health

insurance coverage offered in the individual market as defined in § 27-18.5-2 upon not less than

ten (10) days written notice prior to the hearing. With regard to any other rates or rating formula

subject to the commissioner's jurisdiction the commissioner, or his or her designee, may hold a

hearing upon not less than ten (10) days written notice prior to the hearing. The notice shall be

published by the commissioner in a newspaper or newspapers having aggregate general

circulation throughout the state at least ten (10) days prior to the hearing. The notice shall contain

a description of the rates proposed to be charged and a copy of the notice shall be sent to the

applicant and to the department of the attorney general. In addition, the applicant shall provide

by mail, at least ten (10) days prior to the hearing, notice of the proposed rate increase for health

insurance coverage offered in the individual market as defined in § 27-18.5-2 to all subscribers

subject to the proposed rate increase.

      (b) Filings with the Attorney General's Office: - The applicant shall provide a copy of

the filing on all rates proposed for health insurance coverage offered in the individual market as

defined in § 27-18.5-2 or for a Medicare supplement policy as defined in § 27-18.2-1 to the

Insurance Advocacy Unit of the Attorney General's Office simultaneously with the filing at the

office of the health insurance commissioner.

      (c) Procedures: - At any hearing held under this section, the applicant shall be required to

establish that the rates proposed to be charged or the rating formula proposed to be used are

consistent with the proper conduct of its business and with the interest of the public.

      Rates proposed to be charged by any corporation organized under this chapter shall

maintain total reserves in a dollar amount sufficient to pay claims and operating expenses for not

less than one month. Those reserves shall be computed as of each December 31st, and a report

setting forth the computation shall be submitted to the commissioner together with the

corporation's Rhode Island annual statement to the insurance commissioner of the state of Rhode

Island. Any documents presented in support of a filing of proposed rates under this section shall

be made available for inspection by any party entitled to participate in a hearing or admitted as an

intervenor in a hearing on such conditions as the commissioner may prescribe provided pursuant

to this section at a time and at a place as the commissioner may deem reasonable. The

commissioner, or his or her designee, upon the hearing, may administer oaths, examine and cross

examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena

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witnesses, compel their attendance, and require the production of books, papers, records,

correspondence, or other documents which the director deems relevant. The commissioner shall

issue a decision as soon as is reasonably possible following completion of the hearing. The

decision may approve, disapprove, or modify the rates proposed to be charged by the applicant.

Applicants requesting changes in rates shall underwrite the reasonable expenses of the

commissioner in connection with the hearing, including any costs related to advertisements,

stenographic reporting, and expert witnesses fees.

      (d) The term "designee" as used in this section shall mean a person who is impartial, a

member in good standing of the Rhode Island bar and a person who is sufficiently acquainted

with the rules of evidence as used in the superior court of the state so as to enable that person to

conduct a hearing as designee of the commissioner. The reasonable per diem cost of the designee

as appointed by the commissioner shall be paid by the applicant requesting changes in the rates.

     SECTION 5. This act shall take effect upon passage.

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LC001766

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH INSURANCE - CATASTROPHIC HEALTH INSURANCE

***

     This act would provide that the office of the health insurance commissioner review direct

pay rate requests for health insurance policies sold to individuals in order to make the review

process more efficient and less cumbersome for stakeholders.

     This act would take effect upon passage.

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LC001766

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