AN ACT relating to health insurance and declaring an emergency.
     Create a new section of Subtitle 17A of KRS Chapter 304 on health insurance to require the commissioner of insurance to design two standard health benefit plans by January 1, 1998; require insurers in the individual and in the small group markets to offer the standard plans on and after April 1, 1998, but allow insurers to offer any other plans on and after the effective date of this Act; require applicants to be given a benefits comparison that compares standard plan benefits to the plan being offered; amend 304.17A-160 to delete provisions on standard plans and guaranteed issuance; amend KRS 304.17A-110 to provide two new exceptions to guaranteed renewal and provide for discontinuance of a particular type of coverage; prohibit application of pre-existing condition exclusion to pregnancy for persons covered by an employer, government, or church plan; increase portability period from 60 to 63 days; define creditable coverage; allow health maintenance organizations to use an affiliation period; permit an insurer to modify a plan at time of renewal if the commissioner approves and the change is applied uniformly to all policyholders of the plan; amend KRS 304.17A-095 to require the commissioner to approve or disapprove a rate filing within 30 days; delete the mandatory rate hearing for filings with premium increases that exceed consumer price index plus three percent; require that rates be guaranteed for 12 months; allow plans in effect on the effective date of this Act to be renewed for less than 12 months if the policyholder and insurer agree; require the commissioner to hold a rate hearing upon written request of the Attorney General that includes the reason for the request; provide that rates will be deemed approved if the filing contains a loss ratio guarantee; require loss ratio to be equal to or greater than 70 percent for individual plans and plans issued to groups of 2 to 10, and 75 percent for groups of 11 to 50; require insurers to pay refunds to bring the loss ratio into compliance with the guarantee and pay a penalty of 25 percent of refund; require refunds of less than ten dollars per policy to go to the Common Health Program rather than the policyholder; create a new section of Subtitle 17A of KRS Chapter 304 to establish health insurance rating methodology for individuals, small groups, associations, and alliances; 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 high-risk individuals from July 15, 1995, until the effective date of this Act; provide that premium rates for small group and association members 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 and association members 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; provide that the index rate for any class of business cannot exceed the index rate for any other class of business in that market segment by more than 20 percent; allow the 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 dependents; create a new section of Subtitle 17A of KRS Chapter 304 to require plans in the group market segment and the association 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; create new sections of Subtitle 17A of KRS Chapter 304 to establish the Kentucky Common Health Program to be operational on or before July 1, 1998; create a ten-member board of directors that appoints an administrator and is authorized to hire additional staff; provide that an individual and his dependents are eligible for program coverage if either the individual has at least 18 months of creditable coverage and no more than 63 days have lapsed without coverage prior to application or if the individual has been a Kentucky resident of 12 months and provides evidence of rejection by two insurers, unavailability of coverage for a condition or disease the program plan covers, premiums in the standard market are higher than premiums for program plans, or meeting the definition of high risk as established by the board and approved by the commissioner; provide for factors that make an individual ineligible and factors that permit the program to terminate an individual's coverage; require the program to offer three plans; prohibit pre-existing condition exclusions for individuals who have at least 18 months creditable coverage when no more than 63 days have lapsed without coverage and allow a 12 month pre-existing coverage period for other individuals; prohibit initial rates from exceeding 150 percent of average standard rate but allow subsequent rates that do not exceed 200 percent of average standard rate for similar coverage; create the Kentucky Common Health Program fund and transfer to it annually $9 million from the Kentucky lottery trust account; require the commissioner to annually certify the program and allow the commissioner to decertify the program and establish a new one; require the commissioner to file an annual report with the Legislative Research Commission that evaluates issues concerning high-risk individuals and makes recommendations for alternatives to the program; amend KRS 304.17A-150 to establish as an unfair trade practice the referring of an individual to the program to separate the employee from an employer group of more than 10 employees; amend KRS 304.17A-020, 304.17A-030, 304.17A-040, 304.17A-050, and create new sections of Subtitle 17A of KRS Chapter 304 to make the Kentucky Health Purchasing Alliance a voluntary alliance and permit issuance of certificate of filings to applicants seeking to qualify as an alliance; create a new section of Subtitle 17A of KRS Chapter 304 to permit a health insurer to reenter the Kentucky market until December 31, 1998, if it left the market between July 15, 1994, and the effective date of this Act in compliance with law in effect at the time; create a new section of KRS Chapter 6 to require a social and financial impact statement prior to legislative committee consideration of bills and amendments that contain mandated health benefits; create a new section of Subtitle 3 of KRS Chapter 304 that requires the annual submission to the commissioner of certain data by associations, insurers, and self-insurers that write motor vehicle, workers' compensation, or health insurance; amend KRS 216.2923 to conform; create a new section of Subtitle 17A of KRS Chapter 304 to prohibit the state employee self-insured plan from issuing or renewing coverage to any small group on or after the effective date of this Act; allow the plan to issue and renew coverage for individuals until the commissioner declares the individual market to be competitive; create a new section of Subtitle 17A of KRS Chapter 304 to permit persons currently covered under the state buy-in program to renew or replace coverage under the same terms and conditions as state employees; create new sections of Subtitle 17A of KRS Chapter 304 to permit associations to self-insure to provide health coverage for members; authorize the commissioner to issue certificates of filing to self-insured associations that meet qualifications; create the Kentucky Self-Insured Associations Guaranty Fund and require all self-insured associations that provide health coverage to be members; create a new section of Subtitle 17A of KRS Chapter 304 to empower the commissioner to interpret and apply KRS Chapter 304 to prevent any section of the chapter from hindering the purpose and intent of this Act until July 15, 1998; amend KRS 304.14-120, 304.14-130, 304.17-060, 304.17-380, 304.18-050, 304.38-050, and 304.38-200 to conform; repeal KRS 304.17A-060, 304.17A-070, 304.17A-090, 304.17A-100, 304.17A-120, and 304.17A-170; repeal KRS 304.17A-130 on April 1, 1998; make Section 3 effective on April 1, 1998; EMERGENCY.

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