HCS HB 646 -- HEALTH INSURANCE

SPONSOR:  Luetkenhaus

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
by a vote of 15 to 0.

This substitute makes several changes to the law governing
health insurance, so as to make the state compliant with the
federal Health Insurance Portability and Accountability Act of
1996, to ease eligibility requirements, and to lower premiums
that may be charged for coverage in the high risk pool.

In the law governing the large group market (policies with more
than 50 people covered), the substitute:

(1)  Prohibits insurers from discriminating against any person
in regard to eligibility or coverage based on health status
(Sections 376.421 and 376.451, RSMo);

(2)  Prohibits insurers from imposing any pre-existing condition
exclusions for any person who had 12 months of prior health
insurance coverage (Section 376.426); and

(3)  Sets forth conditions under which issuers may discontinue
or modify coverage (Section 376.452).

In the law governing the small group market (2 to 50 people),
the substitute:

(1)  Requires insurers to offer small employers all the health
benefit plans they actively market to any small employers in the
state.  Current law requires that groups with 3 to 25 employees
be offered at least 2 health benefit plans (a "basic" plan and a
"standard" plan)(Section 379.940);

(2)  Prohibits insurers from imposing any pre-existing condition
exclusions for any person who had 12 months of prior health
insurance coverage (Section 379.940); and

(3)  Changes the definition of "small employer" so as to include
employers with 2 to 50 employees.  Current law defines it as
employers with 3 to 25 employees (Section 379.930).

In the law governing the individual market, the substitute:

(1)  Requires coverage to be renewable at the option of the
insured, except in cases where there is fraud, non-payment of
premiums, the insurer ceases to offer coverage for individuals,
the insured leaves the network area, or the insured no longer
belongs to an association through which the insured was covered
(Section 376.771);

(2)  Changes eligibility for the high risk pool so as to include
those persons who receive a notice of rejection for health
insurance that is similar to that offered through the high risk
pool, persons offered coverage only at a rate that exceeds 150%
of the average standard rate, or persons who are "eligible
individuals" as defined by federal law (Sections 376.960 and
376.966); and

(3)  Limits the premiums insurers may charge in the high risk
pool to 135% of the standard rate for "federally defined
eligible individuals" and 150% for all other individuals.
Current law allows rates to be 200% of the standard rate
(Section 376.986).

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that expansion of the high risk pool
has been needed for a long time.  By providing more access to
the pool, this bill will reduce the number of uninsured in the
state.

Missouri is one of the few states that has not enacted state
laws to comply with the 1996 federal health insurance
portability law.  This has left Missouri with dual regulatory
oversight in this area, causing ambiguities and inefficiency.
The bill will remove these ambiguities.  Also, the federal law
does not address the rates that individual health insurance
carriers must offer.  Hence, those rates are currently so high
that they are not real options for the uninsured.  Finally, only
the rich can afford the high risk pool, which allows insurers to
charge 200% of the standard rate.  Cutting this figure in half
will make the pool available to many more people who currently
cannot afford any insurance.

Testifying for the bill were Representative Luetkenhaus;
American Family Insurance; Health Insurance Association of
America; Golden Rule Insurance Company; Group Health Plans of
Kansas City; Missouri Association of Independent Insurance
Agents and Brokers; Missouri Insurance Coalition; Blue
Cross/Blue Shield; Associated Industries of Missouri; Humana
Health Care Inc.; and Missouri Chamber of Commerce.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:45 am