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Regular Session, 2010
SENATE BILL NO. 153
BY SENATOR ERDEY
HEALTH/ACC INSURANCE. Relative to the high risk health insurance pool. (gov sig)
AN ACT1
To amend and reenact R.S. 22:1061(3)(d)(i), 1073(B)(4), 1210(D), (E), and (F), 1213, and2
to enact R.S. 22:1061(4)(k), 1205(C)(6) and (D), relative to the Louisiana Health3
Plan; to provide for compliance with federal law for expanded coverage by the plan;4
to redefine certain terms relative to portability, availability, and renewability of5
health insurance coverage; to provide with respect to coverage of mental and nervous6
conditions, including alcohol and substance abuse, by the plan; to provider with7
respect to initial rates for federally and non-federally defined eligible individuals; to8
delete the six-month preexisting condition provision for federally defined eligible9
individuals; and to provide for related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 22:1061(3)(d)(i), 1073(B)(4), 1210(D), (E), and (F), 1213 are hereby12
amended and reenacted and R.S. 22:1061(4)(k) and 1205(C)(6) and (D) are hereby enacted13
to read as follows:14
§1061. Definitions15
As used in R.S. 22:984 and 1061 through 1079, the following terms shall16
have the following meanings:17 SB NO. 153
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* * *1
(3) "Excepted benefits" means benefits under one or more of the following:2
* * *3
(d) Benefits not subject to requirements if offered as a separate insurance4
policy:5
(i) Medicare coverage. supplemental health insurance as defined under6
Section 1882(g)(1) of the Social Security Act.7
* * *8
(4) "Creditable coverage" means, with respect to an individual, coverage of9
the individual under any of the following:10
* * *11
(k) Medical assistance coverage provided under 42 USCA 1397 et seq.12
* * *13
§1073. Guaranteed availability of individual health insurance coverage to certain14
individuals with prior group or individual coverage15
* * *16
B. As used in this Section, the term "eligible individual" means an individual17
who meets the requirements of Subsection H of this Section or an individual:18
* * *19
(4) Who, elected if offered the option of continuation of coverage under20
a COBRA continuation provision or under a similar state program., elected this21
coverage.22
* * *23
§1205. Plan of operation24
* * *25
C. In its plan of operation the board shall:26
* * *27
(6) Provide the details of the calculation of each participating insurer's28
assessment.29 SB NO. 153
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D. The board, with the approval of the commissioner, may establish,1
provide for, administer, and contract to provide coverage for a health plan to2
offer eligible individuals and families the ability to purchase or enroll in a3
program established under federal law that provides expanded coverage for4
state high risk pools.5
* * *6
§1210. Fees assessed to participating health insurers for plan losses attributable to7
federally defined eligible individuals8
* * *9
D.(1) Each participating insurer's fee assessment shall be in the proportion10
to gross premiums earned on business in this state for policies or contracts covered11
under this Section for the most recent calendar year for which information is12
available.13
E. (2) Each participating insurer's fee assessment shall be determined by the14
board based on annual statements and other reports deemed to be necessary by the15
board and filed by the participating insurer with the board. The board may use any16
reasonable method of estimating the amount of gross premium of a participating17
insurer if the specific amount is unknown. The plan of operation shall provide the18
details of the calculation of each participating insurer's assessment which shall19
require the approval of the commissioner.20
F. E. A participating insurer may petition the commissioner of insurance for21
deferral of all or part of any fee assessed by the board. If, in the opinion of the22
commissioner, payment of the fee assessment would endanger the solvency of the23
participating insurer, the commissioner may defer, in whole or in part, the fee24
assessment as part of a voluntary rehabilitation or supervisory plan established to25
prevent the plan's insolvency. Any deferrals approved under a voluntary26
rehabilitation or supervisory plan shall be limited to four years and require27
repayment of all deferrals by the end of such period plus legal interest. Until notice28
of payment in full is received from the board, the insurer shall remain under the29 SB NO. 153
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voluntary rehabilitation or supervisory plan. In the event a fee assessment against1
a participating insurer is deferred in whole or in part, the amount by which the fee2
assessment is deferred may be assessed to the other participating insurers in a3
manner consistent with the basis for fee assessments set forth in this Section.4
Collection of such deferrals and legal interest shall be used to offset fee assessments5
against the other participating insurers in a manner consistent with the basis for fee6
assessments set forth in this Section.7
* * *8
§1213. Benefits; availability9
A. The plan shall offer comprehensive coverage to every eligible person who10
is not eligible for Medicare and public programs as defined in this Subpart.11
Comprehensive coverage offered by the plan shall pay an eligible person's covered12
expenses, subject to limits on the deductible and coinsurance payments authorized13
under Paragraph (4) of Subsection F E of this Section, up to a maximum lifetime14
benefit as established by the board of not less than five hundred thousand dollars per15
covered person, payable up to a maximum of two hundred fifty thousand dollars per16
covered person per twelve consecutive months of coverage. For federally defined17
eligible persons, the board shall establish benefits and maximum benefit amounts in18
accordance with applicable federal law and regulations.19
B. The board shall establish reasonable reimbursement amounts for the20
following services and articles prescribed by a health care provider and determined21
by the plan to be medically necessary, including but not limited to: Covered22
expenses shall be the usual, customary, and reasonable charge, as established23
by the board, in the locality for the following services and articles when24
prescribed by a physician and determined by the plan to be medically necessary25
for the following areas of services:26
(1) Hospital services.27
(2) Professional services for the diagnosis or treatment of injuries, illnesses,28
or conditions which are rendered by a health care provider or by other licensed29 SB NO. 153
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professionals at the direction of a health care provider.1
(3) Services of a licensed skilled nursing facility for up to a maximum of one2
hundred twenty days per twelve consecutive months of coverage, unless extended3
for additional days under any cost containment program implemented by the board4
pursuant to Subsection I H of this Section.5
(4) Services of a home health agency up to a maximum of two hundred6
seventy services per twelve consecutive months of coverage, unless increased under7
any cost containment program implemented by the board pursuant to Subsection I8
H of this Section.9
(5) Use of radium or other radioactive materials.10
(6) Oxygen.11
(7) Anesthetics.12
(8) Prostheses other than dental.13
(9) Rental of durable medical equipment, other than eyeglasses and hearing14
aids, for which there is no personal use in the absence of the conditions for which it15
is prescribed.16
(10) Diagnostic X-rays and laboratory tests.17
(11) Oral surgery for excision of partially or completely unerupted, impacted18
teeth or the gums and tissues of the mouth when not performed in connection with19
the extraction or repair of other teeth.20
(12) Services of a physical therapist.21
(13) Transportation provided by a licensed ambulance service to the nearest22
facility qualified to treat the condition.23
(14) Services for diagnosis and treatment of mental and nervous24
disorders provided that a covered person may be required to pay up to a fifty25
percent coinsurance payment, and the plan's payment may not exceed twenty-26
five thousand dollars. Notwithstanding the previous provision, the department27
may conduct a periodic actuarial cost analysis to determine whether the plan's28
maximum payment for outpatient services for diagnosis and treatment of29 SB NO. 153
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mental and nervous disorders should be adjusted.1
C. The board shall establish reasonable reimbursement amounts for any2
services covered under the benefits plans which are not included in Subsection B of3
this Section.4
D. In the event the amounts charged for services and articles provided by or5
at the direction of a health care provider exceed the amount payable for covered6
expenses as provided herein, the health care provider may seek payment of the7
balance owed from the member as allowed under applicable contracts or state and8
federal laws and regulations.9
E. Covered expenses shall not include the following, except as mandated by10
applicable federal law for federally defined eligible individuals:11
(1) Any charge for treatment for cosmetic purposes other than surgery for the12
repair or treatment of an injury or a congenital bodily defect to restore normal bodily13
functions.14
(2) Care which is primarily for custodial purposes.15
(3) Any charge for confinement in a private room to the extent surcharge is16
in excess of the institution's charge for its most common semiprivate room, unless17
a private room is prescribed as medically necessary by a physician.18
(4) That part of any charge for services rendered or articles prescribed by a19
physician, dentist, or other health care provider which exceeds the reasonable20
reimbursement amounts established in Subsections B and C of this Section or for any21
charge not medically necessary.22
(5) Any charge for services or articles the provision of which is not within the23
scope of authorized practice of the institution or individual providing the services or24
articles.25
(6) Any expense incurred prior to the effective date of coverage by the plan26
for the person on whose behalf the expense is incurred.27
(7) Dental care except as provided in Subsection B of this Section.28
(8) Eyeglasses and hearing aids.29 SB NO. 153
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(9) Illness or injury due to acts of war.1
(10) Services of blood donors and any fee for failure to replace the first three2
pints of blood provided to an eligible person each policy year.3
(11) Personal supplies or personal services provided by a hospital or nursing4
home, or any other nonmedical or nonprescribed supply or service.5
(12) Any charge for the diagnosis and treatment of mental and nervous6
disorders, including alcohol and substance abuse.7
F. E.(1) Premiums charged for coverages issued by the plan may not be8
unreasonable in relation to the benefits provided, the risk experience, and the9
reasonable expenses of providing the coverage.10
(2) Separate schedules of premium rates based on age, sex, and geographical11
location may apply for individual risks. Separate schedules of premium rates for12
federally defined eligible individuals may be based on age, sex, and geographical13
location, in accordance with applicable federal laws and regulations.14
(3)(a) The plan, with the assistance of the commissioner, shall determine15
the standard risk rate by calculating the average individual standard rate charged by16
the five largest insurers offering coverages in the state comparable to the plan17
coverage. In the event five insurers do not offer comparable coverage, the standard18
risk rate shall be established using reasonable actuarial techniques and shall reflect19
anticipated experience and expenses for such coverage.20
(b) Standard risk rates for federally defined eligibles eligible individuals21
shall comply with all applicable federal laws and regulations. Initial rates for plan22
coverage for federally defined eligible individuals shall not be less than one23
hundred twenty-five percent of rates established as applicable for individual24
standard risks. In no event shall plan rates exceed two hundred percent of rates25
applicable to the individual standard risks.26
(c) Initial rates for plan coverage provided to nonfederally defined eligible27
individuals shall not be less than one hundred fifty percent of rates established as28
applicable for individual standard risks, or the minimum monthly rates as provided29 SB NO. 153
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for herein, whichever is greater. Subsequent rates provided to nonfederally defined1
eligible individuals shall be established to provide fully for the expected costs of2
claims, including recovery of prior losses, expenses of operation, investment income3
of claim reserves, and any other cost factors subject to the limitations described4
herein. In no event shall plan rates exceed two hundred percent of rates applicable5
to individual standard risks. In no event shall rates be lower than one hundred ten6
percent of rates applicable to individual standard risks.7
(4) The plan coverage defined in this Section shall provide benefits,8
deductibles, coinsurance, and copayments to be established by the board. In addition,9
the board may establish optional benefits, deductibles, coinsurance, and copayments.10
G F. Plan coverage provided to non-federally defined eligible individuals11
shall exclude charges or expenses incurred for or caused by preexisting conditions12
as allowed under R.S. 22:1073(A)(1)(b)., except that no preexisting condition13
exclusion shall be applied to a federally defined eligible individual.14
H. G. (1) Notwithstanding any other law to the contrary, the coverage15
provided by the plan shall be considered excess coverage, and benefits otherwise16
payable under plan coverage shall be reduced by all hospital and medical expense17
benefits paid or payable under any workers' compensation coverage, automobile18
medical payment, or liability insurance whether provided on the basis of fault or19
nonfault, and by any hospital or medical benefits paid or payable by any insurer or20
insurance arrangement or any hospital or medical benefits paid or payable under or21
provided pursuant to any state or federal law or program.22
(2) The plan shall have a cause of action against an eligible person for the23
recovery of the amount of benefits paid by it which are not covered expenses.24
Benefits due from the plan may be reduced or refused as a set-off against any amount25
recoverable under this Paragraph.26
I. H. The benefits plan offered pursuant to this Section shall include such27
managed care provisions as the board deems necessary and proper for:28
(1) Compliance with applicable federal laws and regulations regarding29 SB NO. 153
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choices of benefit coverage for federally defined eligible individuals.1
(2) Containment of costs, including precertification and concurrent or2
continued stay review of hospital admissions, mandatory outpatient surgical3
procedures, preadmission testing, or any other provisions determined by the board4
to be cost effective and consistent with the purposes of this Subpart.5
J. I. Except as otherwise provided in this Subpart and in R.S. 22:976, this6
Section shall establish the exclusive means for determining the benefits required to7
be offered by the plan, notwithstanding any mandatory benefits or required policy8
provisions in this Title to the contrary.9
Section 2. This Act shall become effective upon signature by the governor or, if not10
signed by the governor, upon expiration of the time for bills to become law without signature11
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If12
vetoed by the governor and subsequently approved by the legislature, this Act shall become13
effective on the day following such approval.14
The original instrument was prepared by Cheryl Horne. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Thomas L. Tyler.
DIGEST
Erdey (SB 153)
Proposed law redefines certain terms for purposes of present law relative to assuring
portability, availability, and renewability of health insurance coverage, administered in part
by the La. Health Plan, as follows:
(1)Deletes Medicare coverage benefits from the definition of those"excepted benefits"
not subject to requirements if offered as a separate insurance policy and adds
Medicare supplemental health insurance benefits as defined by the federal Social
Security Act.
(2)Includes under the definition of "creditable coverage" certain medical assistance
coverage provided under federal law.
(3)Changes the definition of "eligible individual" from an individual who elected
COBRA continuation or a similar state program to an individual who, if offered the
option of continuation of COBRA coverage or a similar state program, elected this
coverage.
Proposed law requires the board of directors of the plan to provide the details of the
calculation of each participating insurer's assessment in its plan of operation which is
submitted to the commissioner of insurance for his approval. Further authorizes the board,
with the approval of the commissioner, to establish, provide for, administer, and contract to SB NO. 153
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provide coverage for a health plan to offer eligible individuals and families the ability to
purchase or enroll in a program established under federal law that provides expanded
coverage for state high risk pools.
Present law requires the board to establish reasonable reimbursement amounts for health care
services and providers determined by the plan to be medically necessary, including but not
limited to a list of services specified.
Proposed law provides that covered expenses include the usual, customary, and reasonable
charge, as established by the board, in the locality for services specified in present law when
prescribed by a physician and determined by the plan to be medically necessary for the areas
of services specified.
Present law excludes from covered expenses, unless mandated by federal law for federally
defined eligible individuals, any charge for the diagnosis and treatment of mental and
nervous disorders, including alcohol and substance abuse. Proposed law removes this
specific exclusion.
Proposed law provides that covered expenses includes services for diagnosis and treatment
of mental and nervous disorders, but provides that the covered person may be required to pay
up to a 50% coinsurance payment and that the plan's payment may not exceed $25,000.
Authorizes the Department of Insurance to conduct a periodic actuarial cost analysis to
determine whether the plan's maximum payment for outpatient services for diagnosis and
treatment of mental and nervous disorders should be adjusted.
Present law provides that if the amount charged for services provided by or at the direction
of a health care provider exceed the amount payable for covered expenses by the plan, the
health care provider may seek amounts payable for covered expenses from the member as
allowed under applicable contracts or state and federal laws and regulations. Proposed law
deletes these provisions.
Present law requires that the plan determine the standard risk rate by calculating the average
individual standard rate for the five largest insurers offering coverage in the state comparable
to the plan coverage. Proposed law provides that his determination be made with the
assistance of the commissioner of insurance.
Present law provides that standard risk rates for federally defined eligibles comply with
federal law and regulations. Proposed law retains this provision but provides that initial rates
for plan coverage for such individuals not be less than 125% and not more than 200% of
standard risk rates applicable to individuals.
Present law provides that initial rates for plan coverage provided to non-federally defined
eligible individuals shall not be less than 150% of rates established as applicable for
individual standard risks, or the minimum monthly rates as provided for in present law,
whichever is greater. Requires that subsequent rates provided to such individuals shall be
established to provide fully for the expected costs of claims, including recovery of prior
losses, expenses of operation, investment income of claim reserves, and any other cost
factors subject to the limitations described in present law. Specifies that in no event shall
plan rates exceed 200% of rates applicable to individual standard risks or shall rates be lower
than 110% of rates applicable to individual standard risks. Proposed law retains these
provisions.
Present law allows a six-month pre-existing condition provision to be applied to non-
federally qualified individuals. Proposed law retains these provisions but provides that no
pre-existing condition be applied to federally defined eligible individuals.
Effective upon signature of governor or lapse of time for gubernatorial action. SB NO. 153
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(Amends R.S. 22:1061(3)(d)(i), 1073(B)(4), 1210(D), (E), and (F), 1213; and adds R.S.
22:1061(4)(k), 1205(C)(6) and (D), and 1213(B)(14))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill.
1. Reinstates provisions regarding the initial rates for non-federally defined
eligible individuals.