Chapter 684 Oregon Laws 2003

AN ACT

HB 2189

Relating to public subsidies for health insurance; creating new provisions; amending ORS 414.831, 414.839, 735.625, 735.720 and 735.740; repealing ORS 414.829; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. As used in sections 1 to 4 of this 2003 Act:

(1) “Benefits plan” has the meaning given that term in ORS 735.605.

(2) “Other costs” means costs incurred by the Oregon Medical Insurance Pool that are not covered by the premiums received by the pool for a subsidized member.

(3) “Premium” has the meaning given that term in ORS 735.700.

(4) “Subsidized member” means a medical assistance program client who is enrolled in a benefits plan and who is receiving a subsidy from the Family Health Insurance Assistance Program of the Insurance Pool Governing Board established in ORS 735.720 to 735.740.

(5) “Subsidy” has the meaning given that term in ORS 735.720.

SECTION 2. Notwithstanding ORS 735.615 (3)(a) and (f), a subsidized member is eligible for coverage under ORS 735.600 to 735.650.

SECTION 3. (1) In order to increase public subsidies for the purchase of health insurance coverage provided by public programs or private insurance described by ORS 414.839, the Insurance Pool Governing Board, the Oregon Medical Insurance Pool Board and the Department of Human Services shall work cooperatively to obtain federal matching dollars. The Insurance Pool Governing Board, the Oregon Medical Insurance Pool Board and the department shall develop a system for payment or reimbursement of other costs and subsidies provided to subsidized members.

(2) For each subsidized member, the Oregon Medical Insurance Pool Board shall determine:

(a) The full cost of administering the benefits plan of the subsidized member; and

(b) The amount of other costs.

(3) The Oregon Medical Insurance Pool Board shall bill the Family Health Insurance Assistance Program for the total amount of the premium received by the Oregon Medical Insurance Pool Board and for the amount of other costs. The program shall forward the bill to the department.

(4) The department shall pay the program an amount equal to the portion of the premium that is a subsidy and for other costs. The program shall forward the payment to the Oregon Medical Insurance Pool Board.

SECTION 4. (1) Of payments made to the Family Health Insurance Assistance Program by the Department of Human Services under section 3 (4) of this 2003 Act, the department shall determine:

(a) The portion of a subsidy of a subsidized member that is from the General Fund; and

(b) The portion of other costs that is from the General Fund.

(2) The department shall bill the program for the amounts determined under subsection (1) of this section. The program shall forward the bill for the amount determined under subsection (1)(b) of this section to the Oregon Medical Insurance Pool Board.

(3) The board shall:

(a) Determine the amount of funds needed for the payment of other costs under subsection (1)(b) of this section; and

(b) Impose and collect assessments in that amount against insurers, using the methodology described in ORS 735.614 (2), (6) and (9).

(4) The board shall pay the program for the amounts determined under subsection (1)(b) of this section.

(5) The program shall forward to the department the amounts determined under subsection (1) of this section.

(6) ORS 735.614 (3), (4), (5), (7) and (8) applies to assessments collected under this section.

SECTION 5. 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 medical and portability risk rates either by calculating the average rate charged by insurers offering coverages in the state comparable to the pool coverage or by using reasonable actuarial techniques. The risk rates shall reflect anticipated experience and expenses for such coverage. Rates for pool coverage may not be more than 125 percent of rates established as applicable for medically eligible individuals or 100 percent of rates established as applicable for portability eligible individuals.

(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 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 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 the Medicaid portion of the Oregon Health Plan offering a benefit package of health care services described in ORS 414.837 (1).

(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 6. ORS 414.831 is amended to read:

414.831. [Family Health Insurance Assistance Program. Upon receipt of the waiver,] The Insurance Pool Governing Board shall focus on expanding group coverage provided by the Family Health Insurance Assistance Program[, with the goal of having available funds equally distributed between providing group coverage and individual coverage].

SECTION 7. ORS 414.839 is amended to read:

414.839. [Subsidies for health insurance coverage.] (1) Subject to funds available, the [waiver program described by ORS 414.829 shall] Department of Human Services may provide public subsidies for the purchase of health insurance coverage provided by public programs or private insurance, including but not limited to the Family Health Insurance Assistance Program, for currently uninsured individuals based on incomes up to [185] 200 percent of the federal poverty level. The objective is to create a transition from dependence on public programs to privately financed health insurance.

(2) Public subsidies shall apply only to [the cost of] health benefit plans that meet or exceed the basic benchmark health benefit plan [or the approved equivalent established in ORS 414.829] or plans established under section 11 of this 2003 Act.

(3) Cost-sharing shall be permitted and structured in such a manner to encourage appropriate use of preventive care and avoidance of unnecessary services.

(4) Cost-sharing shall be based on an individual’s ability to pay and may not exceed the cost of purchasing a plan approved as provided under subsection (2) of this section.

(5) The state may pay a portion of the cost of the subsidy, based on the individual’s income and other resources.

SECTION 8. ORS 735.720 is amended to read:

735.720. For purposes of ORS 735.720 to 735.740:

(1) “Eligible individual” means an individual who:

(a) Is a resident of the State of Oregon;

(b) Is not eligible for Medicare;

(c) Either has been without health benefit plan coverage for a period of time established by the Insurance Pool Governing Board, or meets exception criteria established by the board;

(d) Except as otherwise provided by the board, has family income less than 200 percent of the federal poverty level;

(e) Has investments and savings less than the limit established by the board; and

(f) Meets other eligibility criteria established by the board.

(2) “Family” means:

(a) A single individual [who is not claimed as a dependent for state income tax purposes];

(b) An adult and the adult’s spouse;

(c) An adult and the adult’s spouse, [and] all unmarried, dependent children under 23 years of age, including adopted children, [and] children placed for adoption and children under the legal guardianship of the adult or the adult’s spouse, and all dependent children of a dependent child; or

(d) An adult and the adult’s unmarried, dependent children under 23 years of age, including adopted children, [and] children placed for adoption and children under the legal guardianship of the adult, and all dependent children of a dependent child.

(3)(a) “Health benefit plan” means a policy or certificate of group or individual health insurance, as defined in ORS 731.162, providing payment or reimbursement for hospital, medical and surgical expenses. “Health benefit plan” includes a medical savings account, health care service contractor or health maintenance organization subscriber contract, the Oregon Medical Insurance Pool and any plan provided by a less than fully insured multiple employer welfare arrangement or by another benefit arrangement defined in the federal Employee Retirement Income Security Act of 1974, as amended.

(b) “Health benefit plan” does not include coverage for accident only, specific disease or condition only, credit, disability income, coverage of Medicare services pursuant to contracts with the federal government, Medicare supplement insurance, student accident and health insurance, long term care insurance, hospital indemnity only, dental only, vision only, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, [or] insurance under which the benefits are payable with or without regard to fault and that is legally required to be contained in any liability insurance policy or equivalent self-insurance or coverage obtained or provided in another state but not available in Oregon.

(4) “Income” means gross income in cash or kind available to the applicant or recipient.

(5) “Investment and savings” means cash, securities as defined in ORS 59.015, negotiable instruments as defined in ORS 73.0104 and such similar investments or savings as the board may establish that are available to the applicant or recipient to contribute toward meeting the needs of an applicant or eligible individual.

(6) “Medicaid” means medical assistance provided under 42 U.S.C. section 1396a (section 1902 of the Social Security Act).

(7) “Medical savings account” means a trust that is created exclusively for the purpose of paying qualified medical expenses of the account holder and that qualifies for tax deduction under section 220 of the Internal Revenue Code. “Medical savings account” includes an associated high deductible health benefit plan.

(8) “Resident” means an individual who demonstrates to the Insurance Pool Governing Board that the individual is lawfully residing in Oregon and intends to reside in Oregon [permanently].

(9) “Subsidy” means payment or reimbursement to an eligible individual toward the purchase of a health benefit plan, and may include a net billing arrangement with insurance carriers or a prospective or retrospective payment for health benefit plan premiums and eligible copayments or deductible expenses directly related to the eligible individual.

(10) “Third-party administrator” means any insurance company or other entity licensed under the Insurance Code to administer health insurance benefit programs.

SECTION 9. ORS 735.740 is amended to read:

735.740. (1) The Insurance Pool Governing Board may impose sanctions against an individual who violates any provision of ORS 735.720 to 735.740 or rules adopted thereto, including but not limited to suspension or termination from the Family Health Insurance Assistance Program and repayment of any subsidy amounts paid due to the omission or [fraudulent] misrepresentation of an applicant or enrolled individual. Sanctions allowed under this subsection shall be imposed in the manner prescribed in ORS 183.310 to 183.550.

(2) In addition to the sanctions available pursuant to subsection (1) of this section, the board may impose a civil penalty not to exceed $1,000 against any individual who violates any provision of ORS 735.720 to 735.740 or rules adopted pursuant thereto. Civil penalties imposed pursuant to this section shall be imposed pursuant to ORS 183.090.

SECTION 10. Section 11 of this 2003 Act is added to and made a part of ORS 735.720 to 735.740.

SECTION 11. The Insurance Pool Governing Board shall establish at least one basic benchmark health benefit plan that qualifies for a subsidy described by ORS 414.839. In establishing a basic benchmark plan, the board shall consider employer-sponsored health benefit plans offered to employees and dependents of employees in Oregon.

SECTION 12. Not later than 180 days after the effective date of this 2003 Act, the Department of Human Services, in conjunction with the Insurance Pool Governing Board, shall submit to the Centers for Medicare and Medicaid Services for approval a basic benchmark for health benefit plans offered by the Family Health Insurance Assistance Program that considers employer-sponsored health benefit plans offered to employees and dependents of employees in Oregon.

SECTION 13. ORS 414.829 is repealed.

SECTION 14. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect on its passage.

Approved by the Governor August 21, 2003

Filed in the office of Secretary of State August 21, 2003

Effective date August 21, 2003

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