SB 48: "An Act relating to health insurance provided by and provisions relating to the Comprehensive Health Insurance Association."
00SENATE BILL NO. 48 01 "An Act relating to health insurance provided by and provisions relating to the 02 Comprehensive Health Insurance Association." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 21.55.020 is repealed and reenacted to read: 05 Sec. 21.55.020. Board of directors; organization. (a) The board of directors 06 of the association consists of seven individuals. Five board members shall be selected 07 by association members, subject to approval by the director of the division of 08 insurance, and two board members shall be consumers selected by the director of the 09 division of insurance. The director or the director's designee is a nonvoting ex officio 10 member of the board. A member of the board serves for a term of three years and 11 may be reappointed to an unlimited number of terms. The term of a board member 12 shall continue until a successor is appointed. 13 (b) In approving members of the board, the director shall consider, among 14 other things, whether all types of association members are fairly represented.
01 (c) In determining voting rights at association meetings, an association member 02 is entitled to vote in person or by proxy. The vote shall be a weighted vote based on 03 the association member's premiums for health insurance for major medical coverage 04 on an expense incurred basis, or the association member's subscriber fees, derived from 05 or on behalf of state residents in the previous calendar year, as determined by the 06 director. 07 (d) At board meetings, a board member is entitled to one vote in person or by 08 proxy. 09 (e) A member of the board may be reimbursed from the association for 10 expenses incurred as a result of board activities, but may not otherwise be 11 compensated for services by the association. The costs of conducting meetings of the 12 association and its board of directors shall be the responsibility of the members of the 13 association. 14 (f) The board shall study and prepare a report at least once every three years 15 on the effectiveness of this chapter. The report must include an analysis of the 16 effectiveness of this chapter in promoting rate stability, product availability, and 17 affordability of coverage. The report may contain recommendations for legislative or 18 other regulatory action. The board shall notify the legislature that the report is 19 available. 20 (g) In this section, "board" means the board of directors of the association. 21 * Sec. 2. AS 21.55.100(a) is amended to read: 22 (a) The association shall make available to residents who are eligible for 23 coverage under this chapter at least one [HIGH RISKS OR TO FEDERALLY 24 DEFINED ELIGIBLE INDIVIDUALS AN] individual state plan of health insurance. 25 The association shall offer a plan with the deductible, copayment, and calendar 26 year maximum limits [THREE ALTERNATIVES RELATED TO DEDUCTIBLES] 27 as described in AS 21.55.120 and may offer additional deductible , copayment, and 28 calendar year maximum limits as approved by the director [ALTERNATIVES]. 29 * Sec. 3. AS 21.55.100(c) is amended to read: 30 (c) The association may not refuse to offer coverage under a state plan to 31 residents [WHO ARE HIGH RISKS, OR TO FEDERALLY DEFINED ELIGIBLE
01 INDIVIDUALS,] who are eligible under this chapter. The association may not refuse 02 coverage under a state plan to residents who [ARE HIGH RISKS, OR TO 03 FEDERALLY DEFINED ELIGIBLE INDIVIDUALS, WHO] are eligible under this 04 chapter, apply for coverage, and pay the required premium. 05 * Sec. 4. AS 21.55.100(d) is amended to read: 06 (d) The association may make available to residents who are high risks and to 07 federally defined eligible individuals coverage through a health maintenance 08 organization or other managed care arrangement if [AS] approved by the director. 09 Deductible, copayment, and calendar year maximum limits provided through an 10 organization or arrangement are not subject to the limits described in 11 AS 21.55.120, but the limits must be approved by the director. 12 * Sec. 5. AS 21.55.110 is amended to read: 13 Sec. 21.55.110. Minimum benefits of state health insurance plan. Except 14 as provided in AS 21.55.120 - 21.55.140, the minimum standard benefits of a health 15 insurance plan offered under AS 21.55.100(a) shall be benefits with a lifetime 16 maximum of $1,000,000 for each [PER] individual for usual, customary, reasonable, 17 or prevailing charges or, when applicable, the allowance agreed upon between a 18 provider and the plan administrator [WRITING CARRIER] for charges . The 19 minimum standard benefits of the plan must cover [, FOR] the following medical 20 services performed for an individual covered by the plan for the diagnosis or treatment 21 of nonoccupational disease or nonoccupational injury: 22 (1) hospital services; 23 (2) subject to the limitations of AS 21.36.090(d), professional services 24 that are rendered by a physician or by a registered nurse at the physician's direction, 25 other than services for mental or dental conditions; 26 (3) the diagnosis or treatment of mental conditions, as defined in 27 regulations of the director, rendered during the year on other than an inpatient basis, 28 up to a yearly maximum benefit of $4,000; 29 (4) legend drugs requiring a physician's prescription; 30 (5) services of a skilled nursing facility for not more than 120 days in 31 a policy year;
01 (6) home health agency services up to a maximum of 270 visits in a 02 calendar year if the services commence within seven days following confinement in 03 a hospital or skilled nursing facility of at least three consecutive days for the same 04 condition, except that in the case of an individual diagnosed by a physician as 05 terminally ill with a prognosis of six months or less to live, the home health agency 06 services may commence irrespective of whether the covered person was previously 07 confined or, if the covered person was confined, irrespective of the seven-day period, 08 and the yearly benefit for medical social services may not exceed $200; 09 (7) hospice services for up to six months in a calendar year; 10 (8) use of radium or other radioactive materials; 11 (9) outpatient chemotherapy; 12 (10) oxygen; 13 (11) anesthetics; 14 (12) nondental prosthesis and maxillo-facial prosthesis used to replace 15 any anatomic structure lost during treatment for head and neck tumors or additional 16 appliances essential for the support of the prosthesis; 17 (13) rental, or purchase if purchase is more cost effective than rental, 18 of durable medical equipment that has no personal use in the absence of the condition 19 for which it was prescribed; 20 (14) diagnostic x-rays and laboratory tests; 21 (15) oral surgery for excision of partially or completely unerupted 22 impacted teeth or excision of a tooth root without the extraction of the entire tooth; 23 (16) services of a licensed physical therapist rendered under the 24 direction of a physician; 25 (17) transportation by a local ambulance operated by licensed or 26 certified personnel to the nearest health care institution for treatment of the illness or 27 injury and round trip transportation by air to the nearest health care institution for 28 treatment of the illness or injury if the treatment is not available locally; if the patient 29 is a child under 12 years of age, the transportation charges of a parent or legal 30 guardian accompanying the child may be paid if the attending physician certifies the 31 need for the accompaniment;
01 (18) confinement in a licensed or certified facility established primarily 02 for the treatment of alcohol or drug abuse , or in a part of a hospital used primarily for 03 this treatment, for a period of at least 45 days within any calendar year; 04 (19) alternatives to inpatient services as defined by the association in 05 the state plan benefits; 06 (20) second surgical opinions; 07 (21) other services that are medically necessary in the treatment or 08 diagnosis of an illness or injury as may be designated or approved by the director. 09 * Sec. 6. AS 21.55.120(a) is amended to read: 10 (a) A state plan other than a Medicare supplement plan may require a 11 deductible [DEDUCTIBLES] of not less than [$200 A PERSON,] $500 a person as 12 determined by the board and approved by the director [, OR $1,000 A PERSON]. 13 The amount of the deductible may not be greater when a service is rendered on an 14 outpatient basis than when that service is offered on an inpatient basis. Expenses 15 incurred during the last three months of a calendar year and actually applied to an 16 individual's deductible for that year shall also be applied to that individual's deductible 17 in the following calendar year. [THE $200 MAXIMUM, THE $500 MAXIMUM, 18 AND THE $1,000 MAXIMUM MAY BE ADJUSTED YEARLY TO CORRESPOND 19 WITH THE CHANGE IN THE MEDICAL CARE COMPONENT OF THE 20 CONSUMER PRICE INDEX, AS ADJUSTED BY THE DIRECTOR. THE BASE 21 YEAR FOR THE COMPUTATION SHALL BE THE FIRST FULL CALENDAR 22 YEAR OF OPERATION OF THE ASSOCIATION.] 23 * Sec. 7. AS 21.55.120(c) is amended to read: 24 (c) The [EXCEPT AS PROVIDED IN (e) OF THIS SECTION, THE] sum of 25 the deductible and copayments required in any calendar year under a plan may not 26 exceed a maximum limit of $2,500 plus the deductible [$2,000 PER COVERED 27 INDIVIDUAL]. Covered expenses incurred after the applicable maximum limit has 28 been reached shall be paid at the rate of 100 percent of usual, customary, reasonable, 29 or prevailing charges, except that expenses incurred for treatment of mental and 30 nervous conditions shall be paid at the rate of 50 percent. [THE $2,000 MAXIMUM 31 SHALL BE ADJUSTED YEARLY TO CORRESPOND WITH THE CHANGE IN
01 THE MEDICAL CARE COMPONENT OF THE CONSUMER PRICE INDEX 02 AS ADJUSTED BY THE DIRECTOR.] 03 * Sec. 8. AS 21.55.130(c) is amended to read: 04 (c) A state plan issued to a person whose previous subscriber contract, health 05 policy, or Medicare supplement policy was involuntarily terminated shall credit the 06 time covered under the previous contract or policy toward an exclusion for preexisting 07 conditions under the state plan if the previous contract or policy had a similar 08 preexisting condition exclusion and the person applies for a state plan within 31 days 09 after termination of the previous contract or policy. If a person covered by this 10 subsection is accepted by the plan administrator [WRITING CARRIER] and pays a 11 specified premium for retroactive coverage, the state plan is effective retroactively to 12 the date that the person's previous contract or policy terminated. 13 * Sec. 9. AS 21.55.150 is amended to read: 14 Sec. 21.55.150. State plan premiums. (a) The association may not charge 15 a rate for coverage issued by or through the association that is [EXCESSIVE, 16 INADEQUATE, OR] unfairly discriminatory. The board shall submit premium 17 rates to the director for approval before use. 18 (b) The association may [SHALL] use separate scales of premium rates based 19 on age and geographic location of the insured. The association may use separate scales 20 of premium rates based on other factors, including use or nonuse of tobacco, if 21 approved by the director. 22 (c) The board shall determine standard risk premium rates by considering 23 the premium rates charged by members of the association offering, to residents 24 of the state, health insurance [THE FIVE MEMBERS OF THE ASSOCIATION 25 THAT INSURE, OR HAVE SUBSCRIBER CONTRACTS WITH, THE LARGEST 26 NUMBER OF INDIVIDUALS IN THE STATE UNDER PLANS WITH] benefits 27 substantially equivalent to benefits under the state plan [BENEFITS SHALL SUBMIT 28 TO THE ASSOCIATION AN ESTIMATE OF THE RATE THAT WOULD BE 29 ACTUARIALLY SOUND FOR A PERSON WHO IS A STANDARD RISK FOR 30 COVERAGE SUBSTANTIALLY EQUIVALENT TO THE STATE PLAN]. The 31 premium for a state plan may not exceed 200 percent of the standard risk premium
01 rates determined by the board [AVERAGE OF THOSE FIVE ESTIMATES]. 02 * Sec. 10. AS 21.55.200 is amended to read: 03 Sec. 21.55.200. Selection of a plan administrator [WRITING CARRIERS]. 04 The board [ASSOCIATION] shall develop bid specifications and select a plan 05 administrator through a competitive bidding process [FOR MEMBERS THAT 06 WISH TO BE SELECTED AS A WRITING CARRIER TO ADMINISTER A STATE 07 PLAN]. The selection of the plan administrator [WRITING CARRIER] shall be 08 based upon criteria including the plan administrator's [MEMBER'S] proven ability 09 to handle [A LARGE NUMBER OF] health insurance coverage for individuals 10 [CASES OR SUBSCRIBER CONTRACTS], efficient claim paying capacity, [AND] 11 the estimate of total charges for administering the plan , the plan administrator's 12 ability to apply effective cost containment programs and procedures and to 13 administer the plan in a cost efficient manner, and the financial condition and 14 stability of the plan administrator . 15 * Sec. 11. AS 21.55.210 is repealed and reenacted to read: 16 Sec. 21.55.210. Duties of plan administrator. (a) The plan administrator 17 shall perform the administrative and claims payment functions required by this section. 18 The plan administrator shall provide these services for a period specified in the 19 contract between the association and the plan administrator subject to the terms, 20 conditions, and limitations of the contract between the association and the plan 21 administrator. At least six months before the expiration of each contract period, the 22 board shall invite eligible entities, including the plan administrator, to submit bids to 23 serve as the plan administrator. The board shall follow the provisions of this 24 subsection in selecting a plan administrator for the subsequent contract period. 25 (b) The plan administrator shall provide to all eligible persons enrolled in a 26 state plan an individual policy setting out a statement of the insurance protection to 27 which the person is entitled, with whom claims are to be filed, and to whom benefits 28 are payable. The policy must indicate that coverage was obtained through the 29 association. 30 (c) The plan administrator shall submit to the board and the director on a 31 regular basis a report on the operation of the state plans. The board shall determine
01 the specific information to be contained in the report and that information shall be 02 specified in the contract between the association and the plan administrator. 03 (d) The plan administrator shall pay claims and shall indicate when a claim 04 is paid under a state plan. A claim payment must include a telephone number that can 05 be used for inquiries regarding the claim. 06 (e) The plan administrator shall 07 (1) be reimbursed from the state plan receipts for services rendered in 08 connection with administering the plan; and 09 (2) at all times when carrying out its duties under this chapter be 10 considered an agent of the association. 11 * Sec. 12. AS 21.55.220(a) is amended to read: 12 (a) Upon notification of eligibility under AS 21.55.320, a person may enroll 13 in a state plan by payment of the appropriate state plan premium to the plan 14 administrator [WRITING CARRIER]. 15 * Sec. 13. AS 21.55.220(b) is amended to read: 16 (b) An employer that has in its employ one or more eligible persons enrolled 17 in a state plan may make all or a portion of a state plan premium payment directly to 18 the plan administrator [WRITING CARRIER]. 19 * Sec. 14. AS 21.55.220(d) is amended to read: 20 (d) The board [ASSOCIATION] shall make an annual determination of each 21 member's liability, if any, and may make an annual fiscal year end assessment if 22 necessary. The board [ASSOCIATION] may also, subject to the approval of the 23 director, provide for interim assessments against the members as may be necessary to 24 assure the financial capability of the association in meeting the incurred or estimated 25 claims expenses of the state plans and operating and administrative expenses of the 26 association until the association's next annual fiscal year end assessment. Payment of 27 an assessment is due within 30 days of receipt by a member of written notice of a 28 fiscal year end or interim assessment. Failure by a member to tender to the association 29 the assessment within 30 days shall be grounds for revocation of a member's certificate 30 of authority. A member that ceases to do health insurance business in the state, or 31 ceases to offer subscriber contracts in the state, due to revocation, suspension, or
01 voluntary surrender of its certificate of authority , remains liable for assessments 02 through the calendar year that the health insurance business ceased. The board 03 [ASSOCIATION] may decline to levy an assessment against a member if the 04 assessment would be minimal [NOT EXCEED $10]. Assessments paid by a member 05 are a general expense of the member. 06 * Sec. 15. AS 21.55.310 is amended to read: 07 Sec. 21.55.310. Enrollment by an eligible person. A person may enroll in 08 a state plan by applying to the plan administrator [WRITING CARRIER]. The 09 application must include the following: 10 (1) name, address, age, and length of residency of the applicant; 11 (2) a designation of the plan desired, including deductible option 12 chosen; 13 (3) information relevant to whether the person is a high risk or a 14 federally defined eligible individual; and 15 (4) payment of the first premium. 16 * Sec. 16. AS 21.55.320 is amended to read: 17 Sec. 21.55.320. Plan administrator's [WRITING CARRIER'S] response. 18 Within 30 days after receiving the application [CERTIFICATE] described in 19 AS 21.55.310, the plan administrator [WRITING CARRIER] shall either reject the 20 application for failing to comply with the requirements of AS 21.55.300 and 21.55.310 21 or forward the eligible person a notice of acceptance. 22 * Sec. 17. AS 21.55.330 is amended to read: 23 Sec. 21.55.330. Effective date of policies. (a) Except as provided in (b) of 24 this section and AS 21.55.130(c), insurance under a state plan is effective immediately 25 upon receipt of the first [QUARTERLY] premium, and is retroactive to the date of the 26 application, if the applicant otherwise complies with the requirements of this chapter. 27 (b) Insurance under a state plan is effective retroactively to the date that the 28 person's previous contract or policy terminated if the person 29 (1) applies for a state plan within 60 days after the previous contract 30 or policy terminated; 31 (2) is accepted by the plan administrator [WRITING CARRIER]; and
01 (3) pays a specified premium for the period of retroactive coverage. 02 * Sec. 18. AS 21.55.400 is amended to read: 03 Sec. 21.55.400. Duties of director. The director may 04 (1) approve the selection of the plan administrator [WRITING 05 CARRIER] by the association and approve the association's contract with the plan 06 administrator [WRITING CARRIER], including the coverages and premiums to be 07 charged; 08 (2) contract with the federal government or another unit of government 09 to ensure coordination of the state plans with other governmental assistance programs; 10 (3) undertake directly or through contracts with other persons studies 11 or demonstration programs to develop awareness of the benefits of this chapter; and 12 (4) formulate general policy and adopt regulations that are reasonably 13 necessary to administer this chapter. 14 * Sec. 19. AS 21.55.410 is amended to read: 15 Sec. 21.55.410. State not liable. The state is not liable for acts or omissions 16 of the association or a plan administrator [WRITING CARRIER] under this chapter, 17 nor is the state liable for payment of a claim under a state plan issued by a plan 18 administrator [WRITING CARRIER]. 19 * Sec. 20. AS 21.55.500(6) is amended to read: 20 (6) "federally defined eligible individual" means an individual 21 (A) with an aggregate of all periods of creditable coverage as 22 provided under AS 21.54.110(b) of [THAT IS GREATER THAN] 18 months 23 as of the date that the individual seeks coverage under this chapter; 24 (B) whose most recent prior creditable coverage was under a 25 health benefit plan or health care insurance plan offered in the large employer 26 group market or the small employer group market ; 27 (C) who is not eligible for coverage under a health benefit plan, 28 42 U.S.C. 1395c or 42 U.S.C. 1395j (Part A or Part B of Title XVIII of the 29 Social Security Act), or a state plan under 42 U.S.C. 1396 (Title XIX of the 30 Social Security Act), and who does not have other health care insurance 31 coverage;
01 (D) whose most recent coverage within the period of aggregate 02 creditable coverage as provided under AS 21.54.110(b) was not terminated 03 based on a factor relating to nonpayment of premiums or fraud; 04 (E) who, having been offered and having elected continuation 05 coverage under a federal continuation provision or a similar state program, has 06 exhausted coverage under the continuation provision or program; 07 * Sec. 21. AS 21.55.500(18) is amended to read: 08 (18) "residents who are high risks" means residents who 09 (A) have been rejected for medical reasons after applying for 10 a subscriber contract, a policy of health insurance, or a Medicare supplement 11 policy by at least one [TWO] association member [MEMBERS] within the six 12 months immediately preceding the date of application for a state plan; medical 13 reasons may include preexisting medical conditions, a family history that 14 predicts future medical conditions, or an occupation that generates a frequency 15 or severity of injury or disease that results in coverage not being generally 16 available; 17 (B) have had a restrictive rider placed on a subscriber contract, 18 a health insurance policy, or a Medicare supplement policy that substantially 19 reduces coverage; or 20 (C) meet other requirements adopted by regulation by the 21 director that are consistent with this chapter and that indicate that a person is 22 unable to obtain coverage substantially similar to that which may be obtained 23 by a person who is considered a standard risk; 24 * Sec. 22. AS 21.55.500(19) is amended to read: 25 (19) "state plan" means a policy of insurance offered by the association 26 through a plan administrator [WRITING CARRIER]; 27 * Sec. 23. AS 21.55.500 is amended by adding a new paragraph to read: 28 (22) "plan administrator" means the eligible entity selected by the board 29 and approved by the director to administer a state plan. 30 * Sec. 24. AS 21.55.120(d), 21.55.120(e), and 21.55.500(21) are repealed.