Affordable Health Insurance Act of 1998

Summary: Affordable Health Insurance Act of 1998 - Amends the Public Health Service Act to limit the premiums an insurer may charge for new or renewal individual enrollment for an individual who is eligible because of prior group coverage.  Adds the same limit to provisions relating to State flexibility in individual market reforms.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Health Insurance Act of 
1998''.

SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Premium Limitations With Respect to Individual Coverage.--
Section 2741 of the Public Health Service Act (42 U.S.C. 300gg-41) is 
amended--
            (1) by redesignating the second subsection (e) and 
        subsection (f) as subsections (f) and (g), respectively; and
            (2) by adding at the end thereof the following:
    ``(h) Premium Limitations.--
            ``(1) In general.--With respect to an eligible individual 
        desiring to enroll in, or renew, individual health insurance 
        coverage under this section, the health insurance issuer that 
        offers such coverage shall not charge such individual a premium 
        rate for such coverage that is higher than a rate equal to 150 
        percent of the average standard risk rate (as determined under 
        paragraph (2)) of the issuer for individual health insurance 
        offered in the State or applicable marketing or service area 
        (as determined pursuant to regulations).
            ``(2) Average standard risk rate.--As used in paragraph 
        (1), the term `average standard risk rate' means the following:
                    ``(A) Guaranteed issue of all policies.--In the 
                case of a health insurance issuer that meets the 
                requirements of this section with respect to individual 
                health insurance coverage by meeting the requirements 
                of subsection (a)(1), the standard risk rate for the 
                policy in which the eligible individual is enrolled or 
                desires to enroll.
                    ``(B) Guaranteed issue of two most popular 
                policies.--In the case of a health insurance issuer 
                that meets the requirements of this section with 
                respect to individual health insurance coverage through 
                a mechanism described in subsection (c)(2), the 
                standard risk rate for the policy in which the eligible 
                individual is enrolled or desires to enroll.
                    ``(C) Guaranteed issue of two policy forms with 
                representative coverage.--In the case of a health 
                insurance issuer that meets the requirements of this 
                section with respect to individual health insurance 
                coverage through a mechanism described in subsection 
                (c)(3), the average of the standard risk rates for the 
                most common policy forms offered by the issuer in the 
                State or applicable marketing or service area (as 
                determined pursuant to regulations), established using 
                reasonable actuarial techniques to adjust for the 
difference in actuarial values among such policy forms, subject to 
review and approval or disapproval of the applicable regulatory 
authority.
    (b) State Flexibility.--Section 2744(c) of the Public Health 
Service Act (42 U.S.C. 300gg-44(c)) is amended--
            (1) in paragraph (1), by inserting before the period the 
        following: ``, except that in applying any such model act, an 
        eligible individual shall not be charged a premium rate that is 
        higher than a rate equal to 150 percent of the standard risk 
        rate of the issuer'';
            (2) in paragraph (2)(B), by inserting before the period the 
        following: ``, except that an eligible individual shall not be 
        charged a premium rate that is higher than a rate equal to 150 
        percent of the standard risk rate as determined under the Model 
        Plan''; and
            (3) by adding at the end the following:
            ``(4) Limitation.--
                    ``(A) In general.--In the case of a mechanism 
                described in subparagraph (A) or (B) of paragraph (3), 
                a State shall not be considered to be implementing an 
                acceptable alternative mechanism unless the mechanism 
                limits the amount of premium rates that may be charged 
                to eligible individuals to not more than 150 percent of 
                the standard risk rate.
                    ``(B) Standard risk rate.--For purposes of 
                subparagraph (A), the term `standard risk rate' means--
                            ``(i) in the case of a mechanism under 
                        paragraph (3)(A), and as determined by the 
                        Secretary to be appropriate with respect to the 
                        State mechanism involved--
                                    ``(I) the rate determined under 
                                section 2741(h)(2)(A);
                                    ``(II) the rate determined pursuant 
                                to the standards included in the Model 
                                Plan described in paragraph (2)(B); or
                                    ``(III) the rate determined 
                                pursuant to such other method of 
                                calculation as is determined by the 
                                State and approved by the Secretary as 
                                appropriate to achieve the goal of this 
                                subsection; and
                            ``(ii) in the case of a mechanism under 
                        paragraph (3)(B), the rate determined under 
                        section 2741(h)(2)(A).''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by--
            (1) section 2(a) shall apply to health insurance coverage 
        offered, sold, issued, renewed, in effect, or operated in the 
        individual market on the date that is 6 months after the date 
        of enactment of the Act; and
            (2) section 2(b) shall apply with respect to a State that 
        adopted an alternative mechanism under section 2744 of the 
        Public Health Service Act (42 U.S.C. 300gg-44) on the date that 
        is 1 year after the date of enactment of this Act.