71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3435
Senate Bill 103
Sponsored by Senator FISHER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Revises regulation of Oregon Medical Insurance Pool.
A BILL FOR AN ACT
Relating to Oregon Medical Insurance Pool; amending ORS 735.610,
735.616, 735.625, 735.650 and 743.402.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 735.610 is amended to read:
735.610. (1) There is created in the Department of Consumer and
Business Services the Oregon Medical Insurance Pool Board. The
board shall establish the Oregon Medical Insurance Pool and
otherwise carry out the responsibilities of the board under ORS
735.600 to 735.650.
(2) The board shall consist of nine individuals, eight of whom
shall be appointed by the Director of the Department of Consumer
and Business Services. The Director of the Department of Consumer
and Business Services or the director's designee shall be a
member of the board. The chair of the board shall be elected from
among the members of the board. The board shall at all times, to
the extent possible, include at least one representative of a
domestic insurance company licensed to transact health insurance,
one representative of a domestic not-for-profit health care
service contractor, one representative of a health maintenance
organization, one representative of reinsurers and two members of
the general public who are not associated with the medical
profession, a hospital or an insurer.
(3) The director may fill any vacancy on the board by
appointment.
(4) The board shall have the general powers and authority
granted under the laws of this state to insurance companies with
a certificate of authority to transact health insurance and the
specific authority to:
(a) Enter into such contracts as are necessary or proper to
carry out the provisions and purposes of ORS 735.600 to 735.650
including the authority to enter into contracts with similar
pools of other states for the joint performance of common
administrative functions, or with persons or other organizations
for the performance of administrative functions;
(b) Recover any assessments for, on behalf of, or against
insurers;
(c) Take such legal action as is necessary to avoid the payment
of improper claims against the pool or the coverage provided by
or through the pool;
(d) Establish appropriate rates, rate schedules, rate
adjustments, expense allowances, agents' referral fees, claim
reserves or formulas and perform any other actuarial function
appropriate to the operation of the pool. Rates { - shall - }
{ + may + } not be unreasonable in relation to the coverage
provided, the risk experience and expenses of providing the
coverage. Rates and rate schedules may be adjusted for
appropriate risk factors such as age and area variation in claim
costs and shall take into consideration appropriate risk factors
in accordance with established actuarial and underwriting
practices;
(e) Issue policies of insurance in accordance with the
requirements of ORS 735.600 to 735.650;
(f) Appoint from among insurers appropriate actuarial and other
committees as necessary to provide technical assistance in the
operation of the pool, policy and other contract design, and any
other function within the authority of the board;
(g) Seek advances to effect the purposes of the pool; and
(h) Establish rules, conditions and procedures for reinsuring
risks under ORS 735.600 to 735.650.
(5) Each member of the board is entitled to compensation and
expenses as provided in ORS 292.495.
(6) The Director of the Department of Consumer and Business
Services shall adopt rules { + , as provided under ORS 183.310 to
183.550, and policies + } recommended by the board for the
purpose of carrying out ORS 735.600 to 735.650 { - , as provided
under ORS 183.310 to 183.550 - } .
(7) { + In consultation with the board, + } the director shall
employ such staff and consultants as may be necessary for the
purpose of carrying out responsibilities under ORS 735.600 to
735.650.
SECTION 2. ORS 735.616 is amended to read:
735.616. (1) In addition to individuals otherwise qualified
under ORS 735.615, the following individuals qualify for
portability health insurance coverage under the Oregon Medical
Insurance Pool if an application for coverage is made not later
than the 63rd day after the date of first eligibility, as
provided in subsection (2) of this section, and the individual is
an Oregon resident at the time of such application:
(a) An individual who has left coverage that was continuously
in effect for a period of 180 days or more under one or more
group health benefit plans, if:
(A) The terminated coverage was in a plan issued or established
in a state other than Oregon; and
(B) The individual was an Oregon resident for at least 180
consecutive days immediately prior to the termination of
coverage;
(b) An eligible individual, as defined in ORS 743.760, who has
left coverage under a group health benefit plan or a portability
health benefit plan and whose carrier cannot offer a portability
plan under ORS 743.760 (6) because of:
(A) A change in residence of the eligible individual within
Oregon;
(B) A change in the geographic area served by the group
carrier; or
(C) The carrier's withdrawal from the group market in Oregon in
accordance with ORS 743.737 and 743.754;
(c) An individual who has left coverage that was continuously
in effect for a period of 180 days or more under one or more
Oregon group health benefit plans and the terminated coverage was
provided by:
(A) An employee welfare benefit plan that is exempt from state
regulation under the federal Employee Retirement Income Security
Act of 1974, as amended;
(B) A multiple employer welfare arrangement subject to ORS
750.301 to 750.341; or
(C) A public body of this state in accordance with ORS 731.036;
and
(d) On or after January 1, 1998, an individual who meets the
eligibility requirements of 42 U.S.C. 300gg-41, as amended and in
effect on January 1, 1998, and does not otherwise qualify to
obtain portability coverage from an Oregon group carrier in
accordance with ORS 743.760.
(2) Eligibility for coverage pursuant to subsection (1) of this
section is subject to the following provisions:
(a) An eligible individual does not include:
(A) An individual who remains eligible for the individual's
prior group coverage or would remain eligible for prior group
coverage in a plan under the federal Employee Retirement Income
Security Act of 1974, as amended, were it not for action by the
plan sponsor relating to the actual or expected health condition
of the individual;
(B) An individual who is covered under another health benefit
plan at the time that portability coverage would commence;
(C) An individual who is eligible to enroll in another health
benefit plan offered by the employer, other than as a late
enrollee, at the time that portability coverage would commence;
or
(D) An individual who is eligible for the federal Medicare
program.
(b) If an eligible individual has left group coverage issued by
an insurance company, a health care service contractor or a
health maintenance organization, the date of first eligibility is
the day following the termination date of the group coverage,
including any period of continuation coverage that was elected by
the individual under federal law or under ORS 743.600 or 743.610.
(c) If an eligible individual has left group coverage issued by
an entity other than an insurance company, a health care service
contractor or a health maintenance organization, the date of
first eligibility is the day following the termination date of
the group coverage, including the full extent of continuation
coverage available to the individual under federal law and ORS
743.600 and 743.610.
(d) If an individual is eligible for coverage pursuant to
subsection (1)(b) of this section, the date of first eligibility
is the day following the loss of the group or portability
coverage.
(3) Coverage under the Oregon Medical Insurance Pool pursuant
to subsection (1) of this section shall be offered according to
the following provisions:
(a) Coverage is subject to ORS 743.760;
(b) Coverage { - shall - } { + may + } not be subject to a
preexisting conditions provision, exclusion period, waiting
period, residency period or other similar limitation on coverage;
and
(c) The individual shall be required to pay a premium rate not
more than { + 125 percent of + } the { + applicable + }
standard risk rate determined by the Oregon Medical Insurance
Pool Board pursuant to ORS 735.625.
SECTION 3. ORS 735.625 is amended to read:
735.625. (1) Except as provided in subsection (3)(b) of this
section, the Oregon Medical Insurance Pool Board shall offer
major medical expense coverage to every eligible person.
(2) The coverage to be issued by the board, its schedule of
benefits, exclusions and other limitations, shall be established
through rules adopted by the board, taking into consideration the
advice and recommendations of the pool members. In the absence of
such rules, the pool shall adopt by rule the minimum benefits
prescribed by section 6 (Alternative 1) of the Model Health
Insurance Pooling Mechanism Act of the National Association of
Insurance Commissioners (1984).
(3)(a) In establishing the pool coverage, the board shall take
into consideration the levels of medical insurance provided in
the state and medical economic factors as may be deemed
appropriate and shall promulgate benefit levels, deductibles,
coinsurance factors, exclusions and limitations determined to be
equivalent to the portability health benefit plans established
under ORS 743.760.
(b) The board may provide a separate Medicare supplement policy
for individuals under the age of 65 who are receiving Medicare
disability benefits. The board shall adopt rules to establish
benefits, deductibles, coinsurance, exclusions and limitations,
premiums and eligibility requirements for the Medicare supplement
policy.
(4)(a) Premiums charged for coverages issued by the board may
not be unreasonable in relation to the benefits provided, the
risk experience and the reasonable expenses of providing the
coverage.
(b) Separate schedules of premium rates based on age and
geographical location may apply for individual risks.
(c) The board shall determine the { + applicable + } standard
risk rate { + either + } by calculating the average rate charged
by insurers offering coverages in the state comparable to the
pool coverage { - . In the event insurers do not offer
comparable coverage, the standard risk rate shall be
established - } { + or by + } using reasonable actuarial
techniques and shall reflect anticipated experience and expenses
for such coverage. Rates for pool coverage { - shall - }
{ + may + } not be more than 125 percent of rates established as
applicable for individual { + , group or portability + }
risks { + separately or in the aggregate + }.
(d) The board shall annually determine adjusted benefits and
premiums. Such adjustments will be in keeping with the purposes
of ORS 735.600 to 735.650, subject to a limitation of keeping
pool losses under one percent of the total of all medical
insurance premiums, subscriber contract charges and 110 percent
of all benefits paid by member self-insurance arrangements. The
board may determine the total number of persons that may be
enrolled for coverage at any time and may permit and prohibit
enrollment in order to maintain the number authorized. Nothing in
this paragraph authorizes the board to prohibit enrollment for
any reason other than to control the number of persons in the
pool.
(5)(a) Pool coverage { - shall - } { + may + } not exclude
coverage for a period exceeding six months following the
effective date of coverage of an insured pursuant to a
preexisting conditions provision or impose a waiting period
longer than 90 days.
(b) In determining whether a preexisting conditions provision
applies to an eligible enrollee, except as provided in this
subsection, the board shall credit the time the eligible enrollee
was covered under a previous health benefit plan if the previous
health benefit plan was continuous to a date not more than
{ - 60 - } { + 63 + } days prior to the effective date of the
new coverage under the Oregon Medical Insurance Pool, exclusive
of any applicable waiting period. The Oregon Medical Insurance
Pool Board need not credit the time for previous coverage to
which the insured or dependent is otherwise entitled under this
subsection with respect to benefits and services covered in the
pool coverage that were not covered in the previous coverage.
(6) For purposes of this section, a 'preexisting conditions
provision' means a provision that excludes coverage for services,
charges or expenses incurred during a specified period not to
exceed six months following the insured's effective date of
coverage, for a condition for which medical advice, diagnosis,
care or treatment was recommended or received during the
six-month period immediately preceding the insured's effective
date of coverage.
(7)(a) Benefits otherwise payable under pool coverage shall be
reduced by all amounts paid or payable through any other health
insurance, or self-insurance arrangement, and by all hospital and
medical expense benefits paid or payable under any workers'
compensation coverage, automobile medical payment or liability
insurance whether provided on the basis of fault or nonfault, and
by any hospital or medical benefits paid or payable under or
provided pursuant to any state or federal law or program except
Medicaid.
(b) The board shall have a cause of action against an eligible
person for the recovery of the amount of benefits paid which are
not for covered expenses. Benefits due from the pool may be
reduced or refused as a setoff against any amount recoverable
under this paragraph.
(8) Except as provided in ORS 735.616, no mandated benefit
statutes apply to pool coverage under ORS 735.600 to 735.650.
(9) Pool coverage may be furnished through a health care
service contractor or such alternative delivery system as will
contain costs while maintaining quality of care.
SECTION 4. ORS 735.650 is amended to read:
735.650. { - (1) The pool shall be subject to examination and
regulation by the Director of the Department of Consumer and
Business Services. - }
{ - (2) - } { + (1) + } The following provisions of the
Insurance Code shall apply to the pool to the extent applicable
and not inconsistent with the express provisions of ORS 735.600
to 735.650: ORS 731.004 to 731.022, 731.052 to 731.146, 731.162,
731.216 to 731.328, { - 733.010 to 733.050, 733.080, 742.003,
742.005, - } 742.023, 742.028, { - 742.038, - } 742.046,
742.051,
{ - 742.053, - } 742.056, { - 743.010, 743.018 to - }
{ + 743.024, + } { + 743.027, + } 743.028, 743.041, 743.050,
{ + 743.100 to 743.106, + } 743.402 { - to 743.444, 743.447 to
743.480, 743.483 to 743.498, 743.703 to 743.714 - } ,
{ + 743.707, + } 743.721, 743.801, 743.803, 743.804, 743.806,
743.807, 743.808, 743.809, 743.811, 743.814, 743.817, 743.819,
743.821, 743.823, 743.827, 743.829, 743.834, 743.837, 743.839,
743.845, { - ORS chapter 744, ORS - } 746.005 to 746.370 and
746.600 to 746.690.
{ - (3) - } { + (2) + } For the purposes of this section
only, the pool shall be deemed an insurer, pool coverage shall be
deemed individual health insurance and pool coverage contracts
shall be deemed policies.
SECTION 5. ORS 743.402 is amended to read:
743.402. Nothing in ORS 743.405 to 743.498 shall apply to or
affect:
(1) Any workers' compensation insurance policy or any liability
insurance policy with or without supplementary expense coverage
therein;
(2) Any policy of reinsurance;
(3) Any blanket or group policy of insurance; or
(4) Any life insurance policy, or policy supplemental thereto
which contains only such provisions relating to health insurance
as:
(a) Provide additional benefits in case of death or
dismemberment or loss of sight by accident; or
(b) Operate to safeguard such policy against lapse, or to give
a special surrender value or special benefit or an annuity in the
event the insured shall become totally and permanently disabled,
as defined by the policy or supplemental policy.
{ + (5) Coverage under ORS 735.600 to 735.650. + }
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