SENATE FILE 20

BY  KIBBIE

A BILL FOR

An Act relating to health insurance rate increase applications, including notice requirements, and public comment and hearing requirements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 505.19, subsections 1 through 4, Code 2011, are amended by striking the subsections and inserting in lieu thereof the following:
   1.  All health insurance carriers licensed to do business in the state shall immediately notify policyholders and the public of any application for a rate increase that is filed with the insurance division. Such notice shall include all of the following:
   a.  The specific rate increase proposed that is applicable to each policyholder.
   b.  A detailed justification, in plain language and including a summary, for the rate increase proposed that includes a ranking and quantification of those factors that are responsible for the amount of the rate increase proposed, including data on which medical costs are responsible for any part of the rate increase proposed and the amount of any increase in those medical costs.
   c.  Information on how the policyholder or a member of the public can contact the consumer advocate for assistance or to make a comment on the proposed rate increase.
   2.  The commissioner, by rule, shall adopt a uniform format and uniform documentation requirements for all applications for rate increases filed by health insurance carriers licensed to do business in the state.
   3.  The consumer advocate shall solicit public comments on each proposed rate increase application, and shall post without delay all comments received on the insurance division’s internet site prior to approval or disapproval of the proposed rate increase by the commissioner.
   4.  Prior to approval or disapproval of a proposed rate increase, the commissioner shall hold a public hearing at the time a carrier files an application for a proposed rate increase that exceeds either of the following:
   a.  The average annual health spending growth rate stated in the most recent national health expenditure projection published by the centers for Medicare and Medicaid services of the United States department of health and human services.
   b.  Ten percent of the average premium or payment for a given classification of coverage in the individual insurance market.
   Sec. 2.  Section 505.19, Code 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  4A.  The consumer advocate shall present the public testimony, if any, and public comments received by the consumer advocate, for consideration by the commissioner in determining whether to approve or disapprove an application for a rate increase.
   NEW SUBSECTION.  4B.  In determining whether to approve or disapprove an application for a rate increase, the commissioner shall take into consideration the profits, existing surplus, and rate increase history of the health insurance carrier applying for the rate increase, and the impact of approving the rate increase on policyholders.
   NEW SUBSECTION.  4C.  A health insurance carrier shall provide notice to policyholders and the public of an approved rate increase at least sixty days prior to the date the rate increase goes into effect.
EXPLANATION
   This bill relates to health insurance rate increase applications, including notice requirements, and public comment and hearing requirements.
   Code section 505.19 is amended to require that health insurance carriers licensed to do business in the state must provide notification of all applications for rate increases filed with the commissioner of insurance to policyholders and to the public. Currently, such notification is required only if the amount of the proposed rate increase exceeds the average annual health spending growth rate stated in the most recent national health expenditure projection published by the centers for Medicare and Medicaid services of the United States department of health and human services. 
   The required notice must include specified information including a detailed justification for the rate increase in plain language and how to contact the consumer advocate for assistance or to comment on the proposed increase. The commissioner is required to adopt a uniform format and uniform documentation requirements for all applications for rate increases.
   The consumer advocate is required to solicit public comments on each proposed rate increase application and post them on the insurance division’s internet site. In addition, the consumer advocate is required to present public testimony, if any, and public comments received, for consideration by the commissioner in determining whether to approve or disapprove an application for a rate increase.
   If the amount of the proposed rate increase exceeds either the average annual health spending growth rate or 10 percent of the average premium or payment for a given classification of coverage in the individual insurance market, the commissioner is required to hold a public hearing on the rate increase application prior to its approval or disapproval. Currently, the commissioner is required to hold a public hearing only if the proposed rate increase exceeds the average annual health spending growth rate.
   The commissioner is also required to take into consideration the profits, existing surplus, and rate increase history of each health insurance carrier applying for a rate increase, and the impact of the rate increase on policyholders before approving or disapproving an application for the rate increase. A health insurance carrier must provide notice to policyholders and the public of an approved rate increase at least 60 days prior to the date the rate increase goes into effect.