[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3078 Introduced in Senate (IS)]
111th CONGRESS
2d Session
S. 3078
To provide for the establishment of a Health Insurance Rate Authority
to establish limits on premium rating, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 4, 2010
Mrs. Feinstein (for herself, Mrs. Boxer, Mr. Whitehouse, Mr. Reed, and
Mr. Sanders) introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To provide for the establishment of a Health Insurance Rate Authority
to establish limits on premium rating, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Health Insurance Rate Authority Act
of 2010''.
SEC. 2. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.
(a) In General.--Part C of title XXVII of the Public Health Service
Act (42 U.S.C. 300gg-91 et seq.) is amended by adding at the end the
following:
``SEC. 2793. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.
``(a) Initial Rate Review Process.--
``(1) In general.--
``(A) Establishment.--The Secretary, in conjunction
with States, shall establish a uniform process for the
review, beginning with the 2011 plan year, of
potentially unreasonable increases in rates for health
insurance coverage, which shall include premiums.
``(B) Electronic reporting.--The process
established under subparagraph (A) shall include an
electronic reporting system established by the
Secretary through which health insurance issuers
shall--
``(i) report to the Secretary and State
insurance commissioners the information
requested by the Secretary pursuant to this
subsection; and
``(ii) submit data to the uniform data
collection system in accordance with paragraph
(6)(A).
``(C) Authority of states.--Nothing in subparagraph
(A) or (B) shall be construed to prohibit a State from
imposing additional requirements on health insurance
issuers with respect to increases in rates for health
insurance coverage, including with respect to reporting
information to a State.
``(2) Justification and disclosure.--The process
established under paragraph (1) shall require health insurance
issuers to submit to the Secretary and the relevant State a
justification for a potentially unreasonable rate increase
prior to the implementation of the increase. Such issuers shall
prominently post such information on their Internet websites.
The Secretary shall ensure the public disclosure of information
on such increases and justifications for all health insurance
issuers.
``(3) Health insurance rate authority.--
``(A) In general.--The Secretary shall establish a
Health Insurance Rate Authority (referred to in this
paragraph as the `Authority') to be composed of 7
members to be appointed by the Secretary, of which--
``(i) at least 2 members shall be a
consumer advocate with expertise in the
insurance industry;
``(ii) at least 1 member shall be an
individual who is a medical professional;
``(iii) at least 1 member shall be a
representative of health insurance issuers; and
``(iv) such remaining members shall be
individuals who are recognized for their
expertise in health finance and economics,
actuarial science, health facility management,
health plans and integrated delivery systems,
reimbursement of health facilities, and other
related fields, who provide broad geographic
representation and a balance between urban and
rural members.
``(B) Role.--In addition to the other duties of the
Authority set forth in this subsection, the Authority
shall advise and make recommendations to the Secretary
concerning the Secretary's duties under this
subsection.
``(4) Corrective action for unreasonable rate increases.--
``(A) In general.--Pursuant to the procedures set
forth in this paragraph, the Secretary or the relevant
State insurance commissioner shall--
``(i) in accordance with the process
established under paragraph (1), review
potentially unreasonable increases in rates and
determine whether such increases are
unreasonable; and
``(ii) take action to ensure that any rate
increase found to be unreasonable under clause
(i) is corrected, through mechanisms
including--
``(I) denial of the rate increase;
``(II) modification of the rate
increase;
``(III) ordering rebates to
consumers; or
``(IV) any other actions that
correct for the unreasonable increase.
``(B) Required report; definition.--The Secretary
shall ensure that, not later than 6 months after the
date of enactment of this section, the National
Association of Insurance Commissioners (referred to in
this section as the `Association'), in conjunction with
States, or other appropriate body, will provide to the
Secretary and the Authority--
``(i) a report on--
``(I) State authority to review
rates and take corrective action in
each insurance market, and
methodologies used in such reviews;
``(II) rating requests received by
the State in the previous 12 months and
subsequent actions taken by States to
approve, deny, or modify such requests;
and
``(III) justifications by insurance
issuers for rate requests; and
``(ii)(I) a recommended definition of
unreasonable rate increase, which shall
consider a lack of actuarial justification for
such increase; and
``(II) other recommended definitions for
the purposes of carrying out this subsection.
``(C) Determination of who conducts reviews for
each state.--Using the report submitted pursuant to
subparagraph (B), the Secretary shall determine not
later than 1 year after the date of enactment of this
section and periodically thereafter--
``(i) for which States the State insurance
commissioner shall undertake the actions
described in subparagraph (A)--
``(I) based on the Secretary's
determination that the State has
sufficient authority and capability to
deny rates, modify rates, provide
rebates, or take other corrective
actions; and
``(II) as a condition of receiving
a grant under subsection (c)(1); and
``(ii) for which States the Secretary shall
undertake the actions described in subparagraph
(A), in consultation with the relevant State
insurance commissioner, based on the
Secretary's determination that such States lack
the authority and capability described in
clause (i).
``(D) Transition period.--Until the Secretary makes
the determinations described in subparagraph (C), the
relevant State insurance commissioner shall, as a
condition of receiving a grant under subsection (c)(1),
carry out the actions described in subparagraph (A) to
the extent permissible under State law.
``(5) Prioritizing potentially unreasonable rate increases
for review.--The Secretary or the relevant State insurance
commissioner may prioritize--
``(A) rate increases that will impact large numbers
of consumers;
``(B) rate reviews requested from States, if
applicable; and
``(C) rate reviews in the individual and small
group markets.
``(6) Annual report.--
``(A) Uniform data collection system.--The
Secretary, in consultation with the Association and the
Authority, shall develop, and may contract with the
Association to operate, a uniform data collection
system for new and increased rate information, which
shall include information on rates, medical loss
ratios, consumer complaints, solvency, reserves, and
any other relevant factors of market conduct.
``(B) Preparation of annual report.--Using the data
obtained in accordance with subparagraph (A), the
Authority shall annually produce a single, aggregate
report on insurance market behavior, which includes at
least State-by-State information on rate increases from
one year to the next, including by health insurance
issuer and by market and including medical trends,
benefit changes, and relevant demographic changes.
``(C) Distribution.--The Authority shall share the
annual report described in subparagraph (B) with
States, and include such report in the information
disclosed to the public.
``(b) Continuing Rate Review Process.--As a condition of receiving
a grant under subsection (c)(1), a State, through the applicable State
insurance commissioner, shall provide the Secretary with information
about trends in rate increases in health insurance coverage in premium
rating areas in the State, in accordance with the uniform data
collection system established under subsection (a)(6)(A).
``(c) Grants in Support of Process.--
``(1) Rate review grants.--The Secretary shall carry out a
program to award grants to States beginning with fiscal year
2010 to assist such States in carrying out subsection (a),
including--
``(A) in reviewing and, if appropriate under State
law, approving or taking corrective action with respect
to rate increases for health insurance coverage; and
``(B) in providing information to the Secretary
under subsection (b).
``(2) Funding.--
``(A) In general.--There is authorized to be
appropriated to the Secretary $250,000,000, to be
available for expenditure for grants under paragraph
(1).
``(B) Allocation.--The Secretary shall establish a
formula for determining the amount of any grant to a
State under this subsection. Under such formula--
``(i) the Secretary shall consider the
number of plans of health insurance coverage
offered in each State and the population of the
State; and
``(ii) no State qualifying for a grant
under paragraph (1) shall receive more than
$5,000,000 for a grant year.
``(d) Authorization of Appropriations.--In addition to the amount
authorized under subsection (c)(2), there are authorized to be
appropriated to carry out this section $5,000,000 for fiscal year 2010
and such sums as may be necessary for each subsequent fiscal year.''.
(b) Enforcement.--Title XXVII of the Public Health Service Act (42
U.S.C. 300gg et seq.) is amended--
(1) in section 2722--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``and
section 2793'' after ``this part''; and
(ii) in paragraph (2), by inserting ``or
section 2793'' after ``this part''; and
(B) in subsection (b)--
(i) in paragraph (1), by inserting ``and
section 2793'' after ``this part''; and
(ii) in paragraph (2), by inserting ``or
section 2793'' after ``this part'' each place
such term appears; and
(2) in section 2761--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``and
section 2793'' after ``this part''; and
(ii) in paragraph (2)--
(I) by inserting ``or section
2793'' after ``set forth in this
part''; and
(II) by inserting ``and section
2793'' after ``the requirements of this
part''; and
(B) in subsection (b)--
(i) by inserting ``and section 2793'' after
``this part''; and
(ii) by inserting ``and section 2793''
after ``part A''.
(c) Effective Date.--The amendment made by this section shall take
effect on the date of enactment of this Act.
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