SB 546, as introduced, Leno. Health care coverage: rate review.
Existing law, the federal Patient Protection and Affordable Care Act (PPACA), requires the United States Secretary of Health and Human Services to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage in which health insurance issuers submit to the secretary and the relevant state a justification for an unreasonable premium increase prior to implementation of the increase. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer in the individual, small group, or large group markets to file rate information with the Department of Managed Health Care or the Department of Insurance. For large group plan contracts and policies, existing law requires a plan or insurer to file rate information with the department at least 60 days prior to implementing an unreasonable rate increase, as defined in PPACA. Existing law requires the plan or insurer to also disclose specified aggregate data with that rate filing.
This bill would recast the rate information requirement to require large group health care service plans and health insurers to file with the department at least 60 days prior to implementing any rate change all required rate information for any product with a rate change if any of certain conditions apply. The bill would require the plan or insurer to file additional aggregate rate information with the department on or before October 1, 2016. The bill would also require that the plan or insurer disclose the aggregate data for all products sold in the large group market for all rate filings submitted under these provisions on an annual basis. The bill would require the respective departments to conduct a public meeting regarding large group rate changes. The bill would require these meetings to occur annually after the department has reviewed the large group rate information required to be submitted annually by the plan or insurer. The bill would authorize a health care service plan or health insurer that exclusively contracts with no more than 2 medical groups to provide or arrange for professional medical services for enrollees or insureds to meet this requirement by disclosing its actual trend experience for the prior year using benefit categories that are the same or similar to those used by other plans or health insurers.
Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 1385.04 of the Health and Safety Code
2 is amended to read:
(a) For large group health care service plan contracts,
4all health plans shall file with the departmentbegin delete at least 60 days prior all required rate information
5to implementing any rate changeend deletebegin delete for
6unreasonable rate increases. This filing shall be concurrent with
7the written notice described in subdivision (a) of Section 1374.21.end delete
P3 1begin insert for rate changes aggregated for the entire large group market.
2This information shall be submitted on or before October 1, 201end insertbegin insert6,
3and on or before October
1, annually thereafter.end insert
4(b) begin insert(1)end insertbegin insert end insert For large group rate filings, health plans shall submit
5all information that is required by PPACA. A plan shall also submit
6any other information required pursuant to any regulation adopted
7by the department to comply with this article.
8(2) For each health plan that offers coverage in the large group
9market, the department shall conduct a public meeting regarding
10large group rate changes. The meeting shall occur after the
11department has reviewed the information required in (a), on or
12before November 1, 2016,
and on or before November 1, annually
13thereafter.
14(c) A health care service plan subject to subdivision (a) shall
15also disclose the followingbegin delete aggregate data for all rate filingsend deletebegin insert for
16the aggregate rate filing for the large group marketend insert submitted
17under this section in the large group health plan market:
18(1) Number and percentage of rate filings reviewed by the
19following:
20(A) Plan year.
21(B) Segment type.
22(C) Product type.
23(D) Number of subscribers.
24(E) Number of covered lives affected.
25(2) The plan’s average rate increase by the following categories:
end delete26(A) Plan year.
end delete27(B) Segment type.
end delete28(C) Product type.
end delete
29begin insert(2)end insertbegin insert end insertbegin insertAny factors affecting the rate, and the actuarial basis for
30those factors, including:end insert
31(A) Geographic region.
end insertbegin insert32(B) Age, including age rating factors.
end insertbegin insert33(C) Occupation.
end insertbegin insert34(D) Industry.
end insertbegin insert35(E) Health status, including health status factors considered.
end insertbegin insert
36(F) Employee, employee and dependents, including a description
37of the family composition used.
38(G) Enrollee share of premiums.
end insertbegin insert39(H) Enrollee cost sharing.
end insertbegin insert
P4 1(I) Covered benefits in addition to basic health care services,
2as defined in subdivision (b) of Section 1345, and other benefits
3mandated under this article.
4(J) Any other factors that affect the rate that are not otherwise
5specified.
6(3) (A) The plan’s overall annual medical trend factor
7assumptions in each rate filing for all benefits and by aggregate
8benefit category, including hospital inpatient, hospital outpatient,
9physician services, prescription drugs and other ancillary services,
10laboratory, and radiology. A health plan that exclusively contracts
11with no more than two medical groups in the state to provide or
12arrange for professional medical services for the enrollees of the
13plan shall instead disclose the amount of its actual trend experience
14
for the prior contract year by aggregate benefit category, using
15benefit categories that are, to the maximum extent possible, the
16same or similar to those used by other plans.
17(B) The amount of the projected trend attributable to the use of
18services, price inflation, or fees and risk for annual plan contract
19trends by aggregate benefit category, such as hospital inpatient,
20hospital outpatient, physician services, prescription drugs and
21other ancillary services, laboratory, and radiology. A health plan
22that exclusively contracts with no more than two medical groups
23in the state to provide or arrange for professional medical services
24for the enrollees of the plan shall instead disclose the amount of
25its actual trend experience for the prior contract year by aggregate
26benefit category, using benefit categories that are, to the maximum
27extent possible, the same or similar to those used by other plans.
28(C) A comparison of claims cost and rate of changes over time.
end insertbegin insert
29(D) Any changes in enrollee cost sharing over the prior year
30associated with the submitted rate filing.
31(E) Any changes in enrollee benefits over the prior year
32associated with the submitted rate filing.
33(3)
end delete
34begin insert(F)end insert Any cost containment and quality improvement efforts since
35the plan’s last rate filing for the same category of health benefit
36plan. To the extent possible, the plan shall describe any
significant
37new health care cost containment and quality improvement efforts
38and provide an estimate of potential savings together with an
39estimated cost or savings for the projection period.
P5 1(d) The department may require all health care service plans to
2submit all rate filings to the National Association of Insurance
3Commissioners’ System for Electronic Rate and Form Filing
4(SERFF). Submission of the required rate filings to SERFF shall
5be deemed to be filing with the department for purposes of
6compliance with this section.
Section 1385.045 is added to the Health and Safety
8Code, to read:
(a) (1) For large group health care service plan
10contracts, all health plans shall file with the department at least 60
11days prior to implementing any rate change all required rate
12information for any product with a rate change if any of the
13following apply:
14(A) The rate change is equal to or greater than the average rate
15increase for individual market products approved by the California
16Health Benefits Exchange.
17(B) The rate change is equal to or greater than the average rate
18increase approved by the CalPERS board for the subsequent
19calendar year.
20(C) The rate change would cause the large
group purchaser to
21incur the excise tax.
22(D) At the request of the large group purchaser.
23(2) This filing shall be concurrent with the written notice
24described in subdivision (a) of Section 1374.21, except for a filing
25at the request of the large group purchaser. A filing at the request
26of a large group purchaser may occur at any time after receipt of
27the written notice and prior to the rate taking effect.
28(b) A plan shall disclose to the department all of the following
29for each large group rate filing described in (a):
30(1) Company name of plan and contact information.
31(2) Number of plan contract forms covered by the filing.
32(3) Plan contract form numbers covered by the filing.
33(4) Product type, such as a preferred provider organization or
34health maintenance organization.
35(5) Segment type.
36(6) Type of plan involved, such as for profit or not for profit.
37(7) Whether the products are opened or closed.
38(8) Enrollment in each plan contract and rating form.
39(9) Enrollee months in each plan contract form.
P6 1(c) Any factors affecting the rate, and the actuarial basis for the
2factor, including but not limited to:
3(1) Geographic region.
4(2) Age, including age rating factors.
5(3) Occupation.
6(4) Industry.
7(5) Health status, including health status factors considered.
8(6) Employee, employee and dependents, including a description
9of the family composition used.
10(7) Enrollee share of premiums.
11(8) Enrollee cost sharing.
12(9) Covered benefits in addition to basic health care services,
13as defined in subdivision (b) of Section 1345, and other benefits
14mandated under this article.
15(10) Any other factor that affects the rate that is not otherwise
16specified.
17(d) The plan shall also disclose the following:
18(1) Annual rate.
19(2) Total earned premiums in each plan contract form.
20(3) Total incurred claims in each plan contract form.
21(4) Average rate increase initially requested.
22(5) Review category: initial filing for new product, filing for
23existing product, or resubmission.
24(6) Average rate of increase.
25(7) Effective date of rate increase.
26(8) Number of subscribers or enrollees affected by each plan
27contract form.
28(9) The plan’s overall annual medical trend factor assumptions
29in each rate filing for all benefits and by aggregate benefit category,
30including hospital inpatient, hospital outpatient, physician services,
31prescription drugs and other ancillary services, laboratory, and
32radiology. A health plan that exclusively contracts with no more
33than two medical groups in the state to provide or arrange for
34professional medical services for the enrollees of the plan shall
35instead disclose the amount of its actual trend experience for the
36prior contract year by aggregate benefit category, using benefit
37categories that are, to the maximum extent possible, the same or
38similar to those used by other plans.
39(10) The amount of the projected trend attributable to
the use
40of services, price inflation, or fees and risk for annual plan contract
P7 1trends by aggregate benefit category, such as hospital inpatient,
2hospital outpatient, physician services, prescription drugs and other
3ancillary services, laboratory, and radiology. A health plan that
4exclusively contracts with no more than two medical groups in the
5state to provide or arrange for professional medical services for
6the enrollees of the plan shall instead disclose the amount of its
7actual trend experience for the prior contract year by aggregate
8benefit category, using benefit categories that are, to the maximum
9extent possible, the same or similar to those used by other plans.
10(11) A comparison of claims cost and rate of changes over time.
11(12) Any changes in enrollee cost sharing over the prior year
12associated with the submitted rate filing.
13(13) Any changes in enrollee benefits over the prior year
14associated with the submitted rate filing.
15(14) The certification described in subdivision (b) of Section
161385.06.
17(15) Any changes in administrative costs.
18(16) Any other information required for rate review under
19PPACA.
20(17) Any cost containment and quality improvement efforts
21since the plan’s last rate filing for the same category of health care
22service plan. To the extent possible, the plan shall describe any
23significant new health care cost containment and quality
24improvement efforts and provide an estimate of potential savings
25together with an estimated cost or savings for the projection period.
26(e) For rate filings subject to this section, the director shall make
27a decision to modify or deny a rate change that is unreasonable,
28inadequate, or otherwise in violation of this article or federal law
29prior to the implementation of the rate change by the plan.
30(f) The department may require all health care service plans to
31submit all rate filings to the National Association of Insurance
32Commissioners’ System for Electronic Rate and Form Filing
33(SERFF). Submission of the required rate filings to SERFF shall
34be deemed to be filing with the department for purposes of
35compliance with this section.
36(g) A plan shall submit any other information required under
37PPACA. A plan shall also submit any other information required
38pursuant to any regulation adopted by the department to comply
39with this article.
Section 10181.4 of the Insurance Code is amended to
2read:
(a) For large group health insurance policies, all
4health insurers shall file with the departmentbegin delete at least 60 days prior all required rate information for
5to implementing any rate changeend delete
6begin delete unreasonable rate increases. This filing shall be concurrent with begin insert rate changes
7the written notice described in Section 10199.1.end delete
8aggregated for the entire large group market. This information
9shall be submitted on or before October 1, 2016, and on or before
10October 1, annually thereafter.end insert
11(b) begin insert(1)end insertbegin insert end insert For large group rate filings, health insurers shall submit
12all information that is required by PPACA. A health insurer shall
13also submit any other information required pursuant to any
14regulation adopted by the department to comply with this article.
15(2) For each health insurer that offers coverage in the large
16group market, the department shall conduct a public meeting
17regarding large group rate changes. The meeting shall occur after
18the department has reviewed the information required in (a), on
19or before November 1, 2016, and on or before November 1,
20annually thereafter.
21(c) A health insurer subject to subdivision (a) shall also disclose
22the followingbegin delete aggregate data for all rate filingsend deletebegin insert
for the aggregate
23rate filing for the large group marketend insert submitted under this section
24in the large group health insurance market:
25(1) Number and percentage of rate filings reviewed by the
26following:
27(A) Plan year.
28(B) Segment type.
29(C) Product type.
30(D) Number of insureds.
31(E) Number of covered lives affected.
32(2) The insurer’s average rate increase by the following
33categories:
34(A) Plan year.
end delete35(B) Segment type.
end delete36(C) Product type.
end delete
37(2) Any factors affecting the rate, and the actuarial basis for
38those factors, including:
39(A) Geographic region.
end insertbegin insert40(B) Age, including age rating factor.
end insertbegin insertP9 1(C) Occupation.
end insertbegin insert2(D) Industry.
end insertbegin insert3(E) Health status, including health status factors considered.
end insertbegin insert
4(F) Employee, employee and dependents, including a description
5of the family composition used.
6(G) Insured share of premiums.
end insertbegin insert7(H) Insured cost sharing.
end insertbegin insert
8(I) Covered benefits in addition to basic health care services,
9as defined in subdivision (b) of Section 1345 of the Health and
10Safety Code, and other benefits mandated under this article.
11(J) Any other factors that affect the rate that are not otherwise
12specified.
13(3) (A) The health insurer’s overall annual medical trend factor
14assumptions in each rate filing for all benefits and by aggregate
15benefit category, including hospital inpatient, hospital outpatient,
16physician services, prescription drugs and other ancillary services,
17laboratory, and radiology. A health insurer that exclusively
18contracts with no more than two medical groups in the state to
19provide or arrange for professional medical services for the
20insureds of the health insurer shall instead disclose the amount of
21its actual trend experience for the prior
contract year by aggregate
22benefit category, using benefit categories that are, to the maximum
23extent possible, the same or similar to those used by other health
24insurers.
25(B) The amount of the projected trend attributable to the use of
26services, price inflation, or fees and risk for annual health insurer
27contract trends by aggregate benefit category, such as hospital
28inpatient, hospital outpatient, physician services, prescription
29drugs and other ancillary services, laboratory, and radiology. A
30health insurer that exclusively contracts with no more than two
31medical groups in the state to provide or arrange for professional
32medical services for the insureds of the health insurer shall instead
33disclose the amount of its actual trend experience for the prior
34contract year by aggregate benefit category, using benefit
35categories that are, to the maximum extent possible, the same or
36similar to those used by other health insurers.
37(C) A comparison of claims cost and rate of changes over time.
end insertbegin insert
38(D) Any changes in insured cost sharing over the prior year
39associated with the submitted rate filing.
P10 1(E) Any changes in insured benefits over the prior year
2associated with the submitted rate filing.
3(3)
end delete
4begin insert(F)end insert Any cost containment and quality improvement efforts since
5the health insurer’s last rate filing for the same category of health
6insurance policy. To the extent possible, the health insurer
shall
7describe any significant new health care cost containment and
8quality improvement efforts and provide an estimate of potential
9savings together with an estimated cost or savings for the projection
10period.
11(d) The department may require all health insurers to submit all
12rate filings to the National Association of Insurance
13Commissioners’ System for Electronic Rate and Form Filing
14(SERFF). Submission of the required rate filings to SERFF shall
15be deemed to be filing with the department for purposes of
16compliance with this section.
Section 10181.45 is added to the Insurance Code, to
18read:
(a) (1) For large group health insurance policies,
20all health insurers shall file with the department at least 60 days
21prior to implementing any rate change all required rate information
22for any product with a rate change if any of the following apply:
23(A) The rate change is equal to or greater than the average rate
24increase for individual market products approved by the California
25Health Benefits Exchange.
26(B) The rate change is equal to or greater than the average rate
27increase approved by the CalPERS board for the subsequent
28calendar year.
29(C) The rate change would cause the large group
purchaser to
30incur the excise tax.
31(D) At the request of the large group purchaser.
32(2) This filing shall be concurrent with the written notice
33described in subdivision (a) of Section 10199.1, except for a filing
34at the request of the large group purchaser. A filing at the request
35of a large group purchaser may occur at any time after receipt of
36the written notice and prior to the rate taking effect.
37(b) A health insurer shall disclose to the department all of the
38following for each large group rate filing described in (a):
39(1) Company name of the health insurer and contact information.
40(2) Number of health insurance policies covered by the filing.
P11 1(3) Health insurance policy form numbers covered by the filing.
2(4) Product type, such as a preferred provider organization or
3health maintenance organization.
4(5) Segment type.
5(6) Type of health insurer involved, such as for profit or not for
6profit.
7(7) Whether the products are opened or closed.
8(8) Enrollment in each health insurance policy and rating form.
9(9) Insured months in each health insurance policy form.
10(c) Any factors affecting the rate, and the actuarial basis for the
11factor, including
but not limited to:
12(1) Geographic region.
13(2) Age, including age rating factors.
14(3) Occupation.
15(4) Industry.
16(5) Health status, including health status factors considered.
17(6) Employee, employee and dependents, including a description
18of the family composition used.
19(7) Insured share of premiums.
20(8) Insured cost sharing.
21(9) Covered benefits in addition to basic health care services,
22as defined in subdivision (b) of Section 1345,
and other benefits
23mandated under this article.
24(10) Any other factor that affects the rate that is not otherwise
25specified.
26(d) The health insurer shall also disclose the following:
27(1) Annual rate.
28(2) Total earned premiums in each health insurance policy form.
29(3) Total incurred claims in each health insurance policy form.
30(4) Average rate increase initially requested.
31(5) Review category: initial filing for new product, filing for
32existing product, or resubmission.
33(6) Average rate of increase.
34(7) Effective date of rate increase.
35(8) Number of insureds affected by each health insurance policy
36form.
37(9) The health insurer’s overall annual medical trend factor
38assumptions in each rate filing for all benefits and by aggregate
39benefit category, including hospital inpatient, hospital outpatient,
40physician services, prescription drugs and other ancillary services,
P12 1laboratory, and radiology. A health insurer that exclusively
2contracts with no more than two medical groups in the state to
3provide or arrange for professional medical services for the insureds
4of the health insurer shall instead disclose the amount of its actual
5trend experience for the prior contract year by aggregate benefit
6category, using benefit categories that are, to the maximum extent
7possible, the same or similar to those used by
other health insurers.
8(10) The amount of the projected trend attributable to the use
9of services, price inflation, or fees and risk for annual health
10insurance policy trends by aggregate benefit category, such as
11hospital inpatient, hospital outpatient, physician services,
12prescription drugs and other ancillary services, laboratory, and
13radiology. A health insurer that exclusively contracts with no more
14than two medical groups in the state to provide or arrange for
15professional medical services for the insureds of the health insurer
16shall instead disclose the amount of its actual trend experience for
17the prior contract year by aggregate benefit category, using benefit
18categories that are, to the maximum extent possible, the same or
19similar to those used by other health insurers.
20(11) A comparison of claims cost and rate of changes over time.
21(12) Any changes in insured cost sharing over the prior year
22associated with the submitted rate filing.
23(13) Any changes in insured benefits over the prior year
24associated with the submitted rate filing.
25(14) The certification described in subdivision (b) of Section
2610181.6.
27(15) Any changes in administrative costs.
28(16) Any other information required for rate review under
29PPACA.
30(17) Any cost containment and quality improvement efforts
31since the health insurer’s last rate filing for the same category of
32health insurance policy. To the extent possible, the health insurer
33shall describe any significant new health care cost
containment
34and quality improvement efforts and provide an estimate of
35potential savings together with an estimated cost or savings for
36the projection period.
37(e) For rate filings subject to this section, the commissioner
38shall make a decision to modify or deny a rate change that is
39unreasonable, inadequate, or otherwise in violation of this article
P13 1or federal law prior to the implementation of the rate change by
2the health insurer.
3(f) The department may require all health insurers to submit all
4rate filings to the National Association of Insurance
5Commissioners’ System for Electronic Rate and Form Filing
6(SERFF). Submission of the required rate filings to SERFF shall
7be deemed to be filing with the department for purposes of
8compliance with this section.
9(g) A health insurer shall submit any other information
required
10under PPACA. A health insurer shall also submit any other
11information required pursuant to any regulation adopted by the
12department to comply with this article.
No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.
O
99