To provide for the establishment of a Health Insurance Rate Authority to establish limits on premium rating, and for other purposes.

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.

Summary: Health Insurance Rate Authority Act of 2010 - Amends the Public Health Service Act to require the Secretary of Health and Human Services (HHS) to establish a uniform process for the review of potentially unreasonable increases in rates for health insurance coverage, including premiums. Directs the Secretary to establish a Health Insurance Rate Authority to advise and make recommendations to the Secretary. Sets forth corrective actions for unreasonable increases in rates. Requires the Secretary to ensure that the National Association of Insurance Commissioners or other appropriate body will provide to the Secretary and the Authority a report on: (1) state authority to review rates and take corrective action, (2) rating requests received by a state and actions taken, (3) justifications by insurance issuers for rate requests. And (4) a recommended definition of unreasonable rate increase. Requires the Secretary to determine for which states: (1) the state insurance commissioner will review rate increases and take corrective action. And (2) the Secretary will undertake such actions based on the Secretary's determination that such states lack sufficient authority and capability. Directs the Secretary to develop a uniform data collection system for new and increased rate information. Requires the Authority to produce annually a single, aggregate report on insurance market behavior. Directs states, as a condition of receiving a grant under this Act, to provide the Secretary with information about trends in rate increases in health insurance coverage in premium rating areas in the state. Requires the Secretary to carry out a program to award grants to states to carry out this Act. Authorizes the Secretary to enforce this Act if a state does not substantially enforce its provisions. Establishes civil penalties for violations.