72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 669
B-Engrossed
House Bill 2189
Ordered by the House July 25
Including House Amendments dated June 3 and July 25
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for the Insurance Pool Governing Board)
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.
Provides method of funding medical assistance for certain
individuals receiving health insurance under Oregon Health Plan.
Modifies authority of Insurance Pool Governing Board to
establish basic benchmark health benefit plan that qualifies for
subsidy.
Declares emergency, effective on passage.
A BILL FOR AN ACT
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. + }
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