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Full text of "A bill to amend title XXVII of the Public Health Service Act to limit the amount of any increase in the payments required by health insurance issuers for health insurance coverage provided to individuals who are guaranteed an offer of enrollment under individual health insurance coverage relative to other individuals who purchase health insurance coverage"

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106th congress f f O ^ O T 

2D SESSION K. OOZl 

To amend title XX\1I of the Public Health Service Act to limit the amount 
of any increase in the payments required by health insurance issuers 
for health insurance coverage provided to individuals who are guaranteed 
an offer of enrollment under individual health insurance coverage relative 
to other individuals who purchase health insurance coverage. 



IN THE HOUSE OF REPRESENTATIVES 

January 24, 2000 

Mr. Pallone introduced the following bill; which was referred to the 
Committee on Commerce 



A BILL 

To amend title XXVII of the Public Health Service Act 
to limit the amount of any increase in the payments 
required by health insurance issuers for health insurance 
coverage provided to individuals who are guaranteed an 
offer of enrollment under individual health insurance cov- 
erage relative to other individuals who purchase health 
insurance coverage. 

1 Be it enacted hy the Senate and House of Representa- 

2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "Affordable Health In- 

5 suranceActof 2000". 



2 

1 SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 



2 ACT. 

3 (a) Premium Limitations With Respect to Ixdi- 

4 ^TDUAL Co^^ERAGE. — Section 2741 of the Public Health 

5 Service Act (42 U.S.C. 300gg-41) is amended— 

6 (1) by redesignating the second subsection (e) 

7 and subsection (f) as subsections (f) and (g), respec- 

8 tively; and 

9 (2) by adding at the end thereof the folio-wing 

10 new subsection: 

11 "(h) Premium Limitations. — 

12 "(1) In general. — ^With respect to an eUgible 

13 individual desiring to enroll in, or renew, individual 

14 health insurance coverage under this section, the 

15 health insurance issuer that offers such coverage 

16 shall not charge such individual a premium rate for 

17 such coverage that is higher than a rate equal to 

18 150 percent of the average standard risk rate (as 

19 determined under paragraph (2)) of the issuer for 

20 individual health insurance offered in the State or 

21 applicable marketing or service area (as determined 

22 pursuant to regulations). 

23 "(2) A\^rage standard risk rate. — ^As used 

24 in paragraph (1), the terra 'average standard risk 

25 rate' means the following: 



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3 

1 "(A) Guaranteed issue of all poli- 

2 CIES. — In the case of a health insurance issuer 

3 that meets the requirements of this section with 

4 respect to individual health insurance coverage 

5 by meeting the requirements of subsection 

6 (a)(1), the standard risk rate for the pohcy in 

7 which the eligible individual is enrolled or de- 

8 sires to enroll. 

9 "(B) Guaranteed issue of two most 

10 popular policies. — In the case of a health in- 

11 surance issuer that meets the requirements of 

12 this section with respect to individual health in- 

13 surance coverage through a mechanism de- 

14 scribed in subsection (c)(2), the standard risk 

15 rate for the policy in which the eligible indi- 

16 \idual is enrolled or desires to enroll. 

17 "(C) Guaranteed issue of two policy 

18 FORMS with representative coverage. — In 

1 9 the case of a health insurance issuer that meets 

20 the requirements of this section with respect to 

21 indi\idual health insurance coverage through a 

22 mechanism described in subsection (c)(3), the 

23 average of the standard risk rates for the most 

24 common policy forms offered by the issuer in 

25 the State or applicable marketing or service 



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4 

1 area (as determined pursuant to reg:ulations), 

2 established using reasonable actuarial tech- 

3 niques to adjust for the difference in actuarial 

4 values among such policy forms, subject to re- 

5 view and approval or disapproval of the applica- 

6 ble regulatory authority. 

7 (b) State Flexibility. — Section 2744(c) of the 

8 Pubhc Health Service Act (42 U.S.C. 300gg-44(c)) is 

9 amended — 

10 (1) in paragraph (1), by inserting before the pe- 
ll riod the following: except that in applying any 

12 such model act, an eligible individual shall not be 

13 charged a premium rate that is higher than a rate 

14 equal to 150 percent of the standard risk rate of the 

15 issuer"; 

16 (2) in paragraph (2)(B), by inserting before the 

17 period the following: except that an eUgible indi- 

18 vidual shall not be charged a premium rate that is 

19 higher than a rate equal to 150 percent of the 

20 standard risk rate as determined under the Model 

21 Plan"; and 

22 (3) by adding at the end the following: 

23 "(4) Limitation. — 

24 "(A) In gexerai.. — In the case of a mech- 

25 anism described in subparagraph (A) or (B) of 

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1 paragraph (3), a State shall not be considered 

2 to be implementing an acceptable alternative 

3 mechanism unless the mechanism limits the 
* 4 amount of premium rates that may be charged 

5 to eUgible individuals to not more than 150 per- 

6 cent of the standard risk rate. 

7 "(B) Standard risk rate. — For pur- 

8 poses of subparagraph (A), the term 'standard 

9 risk rate' means — 

10 "(i) in the case of a mechanism under 

11 paragraph (3) (A), and as determined by 

12 the Secretary to be appropriate with re- 

13 speet to the State mechanism involved — 

14 "(I) the rate determined under 

15 section 2741(h)(2)(A); 

16 "(II) the rate determined pursu- 

17 ant to the standards included in the 

18 Model Plan described in paragraph 

19 (2)(B); or 

20 "(III) the rate determined pursu- 

21 ant to such other method of ealcula- 

22 tion as determined by the State and 
J 23 approved by the Secretary as appro- 

24 priate to achieve the goal of this sub- 

25 section; and 



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ens LIBRflRV 

6 3 flOTS DDD1D5D1 L 

1 "(ii) in the case of a mechanism 

2 under paragraph (3)(B), the rate deter- 

3 mined under section 2741(h)(2)(A).". 

4 SEC. 3. EFFECTIVE DATE. 

5 The amendments made by — 

6 (1) section 2(a) shall apply to health insurance 

7 coverage offered, sold, issued, renewed, in effect, or 

8 operated in the individual market on the date that 

9 is 6 months after the date of enactment of this Act; 

10 and 

11 (2) section 2(b) shall apply with respect to a 

12 State that adopted an alternative mechanism under 

13 section 2744 of the Pubhc Health Service at (42 

14 U.S.C. 300gg-44) on the date that is 1 year after 

15 the date of enactment of this Act. 

O 



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