§ 3233 — Stabilization of health insurance markets and premium rates

§ 3233. Stabilization of health insurance markets and premium rates.\n(a) Notwithstanding any provision of this chapter or any other chapter,\non or before October first, nineteen hundred ninety-two the\nsuperintendent shall promulgate regulations to assure an orderly\nimplementation and ongoing operation of the open enrollment and\ncommunity rating required by sections thirty-two hundred thirty-one and\nforty-three hundred seventeen of this chapter, including provisions\ndesigned to encourage insurers to remain in or enter the small group or\nindividual health insurance markets. The regulations shall apply to all\ninsurers and health maintenance organizations subject to community\nrating. The regulations shall be designed to promote an insurance\nmarketplace where premiums do not unduly fluctuate, insurers and health\nmaintenance organizations are reasonably protected against unexpected\nsignificant shifts in the number of persons insured, and other market\nstability features deemed appropriate by the superintendent. Such\nregulations shall not require any insurer or health maintenance\norganization subject to this section, or any subsidiary or controlled\nperson of a holding company of such insurer or health maintenance\norganization, to enter, continue to conduct, or withdraw from any line\nof business as a condition of entering, continuing in, or withdrawing\nfrom any other line of business.\n (b) Prior to adopting such regulations the superintendent shall\nconvene a technical advisory committee to provide advice and\nrecommendations to the superintendent on issues including, but not\nlimited to, voluntary reinsurance, pooling, risk sharing, the moderation\nof initial community rates as compared to prior rates, or premium\nstabilization methods. The technical advisory committee shall be\ncomprised of nine members, one of whom shall be the superintendent or\nhis or her designee. The superintendent or his or her designee shall\nchair the committee and shall appoint two other members to the\ncommittee. The temporary president of the senate and the speaker of the\nassembly shall each appoint three members to the committee. The\nappointees shall be representatives of commercial health insurers,\nnot-for-profit health insurers, health maintenance organizations and\npurchasers of insurance and shall be named no later than July fifteenth,\nnineteen hundred ninety-two. In addition, the superintendent may obtain\nthe services of an actuary with experience relating to premium rates and\nmarket stabilization for small group health insurance.\n (c) (1) Such regulations shall include reinsurance or a pooling\nprocess involving insurer contributions to, or receipts from, a fund\nwhich shall be designed to share the risk of or equalize high cost\nclaims, claims of high cost persons, cost variations among insurers and\nhealth maintenance organizations based upon demographic factors of the\npersons insured which correlate with such cost variations designed to\nprotect insurers from disproportionate adverse risks of offering\ncoverage to all applicants; provided that such regulations shall relate\nonly to risk sharing among insurers and health maintenance organizations\nand shall not create differences in community rates charged by a single\ninsurer because an individual's or small group's coverage has been\nreinsured or pooled, and neither the small employer nor the employee\nshall have reason to know that their coverage has been reinsured or\npooled pursuant to such regulations. Such regulations may also include\nother mechanisms designed to share risks or prevent undue variations in\ninsurer claim costs which are not related to expected differences in\ninsurer costs based upon competition, innovation and efficiency of\noperation. The regulations may segregate any reinsurance, pooling or\nother process among various geographic regions of the state.\n (2) Effective on and after January first, nineteen hundred ninety-six,\nhealth maintenance organizations and insurers shall be required to\ncontribute only ninety percent of the amounts calculated pursuant to\nregulations based upon demographic factors. The required contribution\nwill be further reduced by an additional twenty-two and one-half percent\non each succeeding January first. The aggregate total contributions by\nhealth maintenance organizations and insurers required pursuant to\nregulations based upon specified medical conditions shall be increased\nby the aggregate total amount of savings resulting from decreased\ncontributions calculated pursuant to regulations based upon demographic\nfactors, provided, however, that the funds received by an insurer or\nhealth maintenance organization pursuant to such regulations be applied\nto reduce the premiums of the particular class of contracts issued\npursuant to sections four thousand three hundred twenty-one and four\nthousand three hundred twenty-two of this chapter whose subscribers\ncaused the payments to be received.\n (3) On and after January first, two thousand, such regulations shall\ninclude only reinsurance or a pooling process involving insurer and\nhealth maintenance organization contributions to, or receipts from, a\nfund which shall be designed to share the risk of or equalize high cost\nclaims or the claims of high cost persons; provided that such\nregulations shall relate only to risk sharing among insurers and health\nmaintenance organizations and shall not create differences in community\nrates charged by a single insurer or health maintenance organization\nbecause an individual's or small group's coverage has been reinsured or\npooled, and neither the small employer nor the employee shall have\nreason to know that their coverage has been reinsured or pooled pursuant\nto such regulations. Such regulations may also include other mechanisms\ndesigned to share risks or prevent undue variations in insurer and\nhealth maintenance organization claim costs which are not related to\nexpected differences in insurer and health maintenance organization\ncosts based upon competition, innovation and efficiency of operation.\nThe regulations may segregate any reinsurance, pooling or other process\namong various geographic regions of the state. Prior to adopting such\nregulations the superintendent shall convene a technical advisory\ncommittee to provide advice and recommendations to the superintendent on\nissues including, but not limited to, voluntary reinsurance, pooling,\nrisk sharing, the moderation of initial community rates as compared to\nprior rates, or premium stabilization methods. The technical advisory\ncommittee shall be comprised of nine members, one of whom shall be the\nsuperintendent or his or her designee. The superintendent or his or her\ndesignee shall chair the committee and shall appoint two other members\nto the committee. The temporary president of the senate and the speaker\nof the assembly shall each appoint three members to the committee. The\nappointees shall be representatives of not-for-profit and commercial\nhealth insurers, health maintenance organizations, consumers and other\npurchasers of insurance and shall be named no later than September\nfirst, nineteen hundred ninety-five.\n The superintendent shall also convene the technical advisory committee\nperiodically to evaluate the impact of the standardized direct payment\nenrollee contracts offered pursuant to sections four thousand three\nhundred twenty-one and four thousand three hundred twenty-two of this\nchapter on the individual health insurance market. In the course of such\nevaluation, the superintendent and the technical advisory committee\nshall consider: the adequacy of the benefits provided under the\ncontracts and their effect on the affordability of the contracts;\nenrollment levels in the contracts in various regions of the state;\nutilization and claims experience of the contract holders; the impact of\nnon-standardized direct payment enrollee contracts on the individual\nmarket; whether there is a need for an additional standardized direct\npayment enrollee contract and recommendations on whether other or\ndifferent standardized benefit packages should be offered in the\nindividual market; other options to enhance the affordability of the\ncontracts; and such other areas as the technical advisory committee\ndeems appropriate. After completing such evaluation, but in no event\nlater than October first, nineteen hundred ninety-six, the technical\nadvisory committee shall deliver a report to the governor, the speaker\nof the assembly and the temporary president of the senate which contains\nthe results of its evaluation and any findings or recommendations on\nenhancing access to and affordability of individual health insurance\nproducts.\n (d) Notwithstanding any provision of this chapter or any other\nchapter, the superintendent may suspend or terminate, by regulation, the\noperation, in whole or in part, of any mechanism established and\noperating pursuant to the authority of this section provided that the\nsuperintendent determines that the objectives stated in subsection (a)\nof this section are met by the operation of a mechanism or mechanisms\nestablished by the federal government pursuant to section 1343 of the\naffordable care act, 42 U.S.C. § 18063. Notwithstanding subsection (b)\nof this section, the superintendent may exercise this authority without\nconvening a technical advisory committee.\n