I 

111TH CONGRESS 

2D SESSION H. R. 4757 

To provide for the establishment of a Health Insurance Rate Authority 

to establish limits on premium rating, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2010 

Ms. SCHAKOWSKY (for herself, Ms. BALDWIN, Mrs. CAPPS, Mr. CONYERS, Ms. 

DELAURO, Mr. FILNER, Mr. FRANK of Massachusetts, Mr. AL GREEN

of Texas, Mr. GENE GREEN of Texas, Mr. GRIJALVA, Ms. HARMAN, Mr. 

HARE, Ms. LEE of California, Ms. MOORE of Wisconsin, Ms. SUTTON, 

Mr. WEINER, Ms. WATSON, Ms. WOOLSEY, and Mr. MARKEY of Massachusetts) introduced the following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To provide for the establishment of a Health Insurance Rate 

Authority to establish limits on premium rating, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Health Insurance Rate 

5 Authority Act of 2010’’. 


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1 SEC. 2. ENSURING THAT CONSUMERS GET VALUE FOR 

2 THEIR DOLLARS. 

3 (a) IN GENERAL.—Part C of title XXVII of the Pub4 lic Health Service Act (42 U.S.C. 300gg–91 et seq.) is 

5 amended by adding at the end the following: 

6 ‘‘SEC. 2793. ENSURING THAT CONSUMERS GET VALUE FOR 

7 THEIR DOLLARS. 

8 ‘‘(a) INITIAL RATE REVIEW PROCESS.— 

9 ‘‘(1) IN GENERAL.— 

10 ‘‘(A) ESTABLISHMENT.—The Secretary, in 

11 conjunction with States, shall establish a uni12 form process for the review, beginning with the 

13 2011 plan year, of potentially unreasonable in14 creases in rates for health insurance coverage, 

15 which shall include premiums. 

16 ‘‘(B) ELECTRONIC REPORTING.—The proc17 ess established under subparagraph (A) shall 

18 include an electronic reporting system estab19 lished by the Secretary through which health in20 surance issuers shall— 

21 ‘‘(i) report to the Secretary and State 

22 insurance commissioners the information 

23 requested by the Secretary pursuant to 

24 this subsection; and 


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1 ‘‘(ii) submit data to the uniform data 

2 collection system in accordance with para3 graph (6)(A). 

4 ‘‘(C) AUTHORITY OF STATES.—Nothing in 

5 subparagraph (A) or (B) shall be construed to 

6 prohibit a State from imposing additional re7 quirements on health insurance issuers with re8 spect to increases in rates for health insurance 

9 coverage, including with respect to reporting in10 formation to a State. 

11 ‘‘(2) JUSTIFICATION AND DISCLOSURE.—The 

12 process established under paragraph (1) shall re13 quire health insurance issuers to submit to the Sec14 retary and the relevant State a justification for a po15 tentially unreasonable rate increase prior to the im16 plementation of the increase. Such issuers shall 

17 prominently post such information on their Internet 

18 websites. The Secretary shall ensure the public dis19 closure of information on such increases and jus20 tifications for all health insurance issuers. 

21 ‘‘(3) HEALTH INSURANCE RATE AUTHORITY.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 establish a Health Insurance Rate Authority 

24 (referred to in this paragraph as the ‘AuthorVerDate Nov 24 2008 05:20 Mar 05, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4757.IH H4757

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1 ity’) to be composed of 7 members to be ap2 pointed by the Secretary, of which— 

3 ‘‘(i) at least 2 members shall be a 

4 consumer advocate with expertise in the in5 surance industry; 

6 ‘‘(ii) at least 1 member shall be an in7 dividual who is a medical professional; 

8 ‘‘(iii) at least 1 member shall be a 

9 representative of health insurance issuers; 

10 and 

11 ‘‘(iv) such remaining members shall 

12 be individuals who are recognized for their 

13 expertise in health finance and economics, 

14 actuarial science, health facility manage15 ment, health plans and integrated delivery 

16 systems, reimbursement of health facilities, 

17 and other related fields, who provide broad 

18 geographic representation and a balance 

19 between urban and rural members. 

20 ‘‘(B) ROLE.—In addition to the other du21 ties of the Authority set forth in this sub22 section, the Authority shall advise and make 

23 recommendations to the Secretary concerning 

24 the Secretary’s duties under this subsection. 


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1 ‘‘(4) CORRECTIVE ACTION FOR UNREASONABLE

2 RATE INCREASES.— 

3 ‘‘(A) IN GENERAL.—Pursuant to the pro4 cedures set forth in this paragraph, the Sec5 retary or the relevant State insurance commis6 sioner shall— 

7 ‘‘(i) in accordance with the process es8 tablished under paragraph (1), review po9 tentially unreasonable increases in rates 

10 and determine whether such increases are 

11 unreasonable; and 

12 ‘‘(ii) take action to ensure that any 

13 rate increase found to be unreasonable 

14 under clause (i) is corrected, through 

15 mechanisms including— 

16 ‘‘(I) denial of the rate increase; 

17 ‘‘(II) modification of the rate in18 crease; 

19 ‘‘(III) ordering rebates to con20 sumers; or 

21 ‘‘(IV) any other actions that cor22 rect for the unreasonable increase. 

23 ‘‘(B) REQUIRED REPORT; DEFINITION.— 

24 The Secretary shall ensure that, not later than 

25 6 months after the date of enactment of this 


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1 section, the National Association of Insurance 

2 Commissioners (referred to in this section as 

3 the ‘Association’), in conjunction with States, or 

4 other appropriate body, will provide to the Sec5 retary and the Authority— 

6 ‘‘(i) a report on— 

7 ‘‘(I) State authority to review 

8 rates and take corrective action in 

9 each insurance market, and meth10 odologies used in such reviews; 

11 ‘‘(II) rating requests received by 

12 the State in the previous 12 months 

13 and subsequent actions taken by 

14 States to approve, deny, or modify 

15 such requests; and 

16 ‘‘(III) justifications by insurance 

17 issuers for rate requests; and 

18 ‘‘(ii)(I) a recommended definition of 

19 unreasonable rate increase, which shall 

20 consider a lack of actuarial justification for 

21 such increase; and 

22 ‘‘(II) other recommended definitions 

23 for the purposes of carrying out this sub24 section. 


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1 ‘‘(C) DETERMINATION OF WHO CONDUCTS

2 REVIEWS FOR EACH STATE.—Using the report 

3 submitted pursuant to subparagraph (B), the 

4 Secretary shall determine not later than 1 year 

5 after the date of enactment of this section and 

6 periodically thereafter— 

7 ‘‘(i) for which States the State insur8 ance commissioner shall undertake the ac9 tions described in subparagraph (A)— 

10 ‘‘(I) based on the Secretary’s de11 termination that the State has suffi12 cient authority and capability to deny 

13 rates, modify rates, provide rebates, 

14 or take other corrective actions; and 

15 ‘‘(II) as a condition of receiving a 

16 grant under subsection (c)(1); and 

17 ‘‘(ii) for which States the Secretary 

18 shall undertake the actions described in 

19 subparagraph (A), in consultation with the 

20 relevant State insurance commissioner, 

21 based on the Secretary’s determination 

22 that such States lack the authority and ca23 pability described in clause (i). 

24 ‘‘(D) TRANSITION PERIOD.—Until the Sec25 retary makes the determinations described in 


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1 subparagraph (C), the relevant State insurance 

2 commissioner shall, as a condition of receiving 

3 a grant under subsection (c)(1), carry out the 

4 actions described in subparagraph (A) to the 

5 extent permissible under State law. 

6 ‘‘(5) PRIORITIZING POTENTIALLY UNREASON7 ABLE RATE INCREASES FOR REVIEW.—The Sec8 retary or the relevant State insurance commissioner 

9 may prioritize— 

10 ‘‘(A) rate increases that will impact large 

11 numbers of consumers; 

12 ‘‘(B) rate reviews requested from States, if 

13 applicable; and 

14 ‘‘(C) rate reviews in the individual and 

15 small group markets. 

16 ‘‘(6) ANNUAL REPORT.— 

17 ‘‘(A) UNIFORM DATA COLLECTION SYS18 TEM.—The Secretary, in consultation with the 

19 Association and the Authority, shall develop, 

20 and may contract with the Association to oper21 ate, a uniform data collection system for new 

22 and increased rate information, which shall in23 clude information on rates, medical loss ratios, 

24 consumer complaints, solvency, reserves, and 

25 any other relevant factors of market conduct. 


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1 ‘‘(B) PREPARATION OF ANNUAL RE2 PORT.—Using the data obtained in accordance 

3 with subparagraph (A), the Authority shall an4 nually produce a single, aggregate report on in5 surance market behavior, which includes at 

6 least State-by-State information on rate in7 creases from one year to the next, including by 

8 health insurance issuer and by market and in9 cluding medical trends, benefit changes, and 

10 relevant demographic changes. 

11 ‘‘(C) DISTRIBUTION.—The Authority shall 

12 share the annual report described in subpara13 graph (B) with States, and include such report 

14 in the information disclosed to the public. 

15 ‘‘(b) CONTINUING RATE REVIEW PROCESS.—As a 

16 condition of receiving a grant under subsection (c)(1), a 

17 State, through the applicable State insurance commis18 sioner, shall provide the Secretary with information about 

19 trends in rate increases in health insurance coverage in 

20 premium rating areas in the State, in accordance with the 

21 uniform data collection system established under sub22 section (a)(6)(A). 

23 ‘‘(c) GRANTS IN SUPPORT OF PROCESS.— 

24 ‘‘(1) RATE REVIEW GRANTS.—The Secretary 

25 shall carry out a program to award grants to States 


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1 beginning with fiscal year 2010 to assist such States 

2 in carrying out subsection (a), including— 

3 ‘‘(A) in reviewing and, if appropriate under 

4 State law, approving or taking corrective action 

5 with respect to rate increases for health insur6 ance coverage; and 

7 ‘‘(B) in providing information to the Sec8 retary under subsection (b). 

9 ‘‘(2) FUNDING.— 

10 ‘‘(A) IN GENERAL.—There is authorized to 

11 be appropriated to the Secretary $250,000,000, 

12 to be available for expenditure for grants under 

13 paragraph (1). 

14 ‘‘(B) ALLOCATION.—The Secretary shall 

15 establish a formula for determining the amount 

16 of any grant to a State under this subsection. 

17 Under such formula— 

18 ‘‘(i) the Secretary shall consider the 

19 number of plans of health insurance cov20 erage offered in each State and the popu21 lation of the State; and 

22 ‘‘(ii) no State qualifying for a grant 

23 under paragraph (1) shall receive more 

24 than $5,000,000 for a grant year. 


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1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—In ad2 dition to the amount authorized under subsection (c)(2), 

3 there are authorized to be appropriated to carry out this 

4 section $5,000,000 for fiscal year 2010 and such sums 

5 as may be necessary for each subsequent fiscal year.’’. 

6 (b) ENFORCEMENT.—Title XXVII of the Public 

7 Health Service Act (42 U.S.C. 300gg et seq.) is amend8 ed— 

9 (1) in section 2722— 

10 (A) in subsection (a)— 

11 (i) in paragraph (1), by inserting 

12 ‘‘and section 2793’’ after ‘‘this part’’; and 

13 (ii) in paragraph (2), by inserting ‘‘or 

14 section 2793’’ after ‘‘this part’’; and 

15 (B) in subsection (b)— 

16 (i) in paragraph (1), by inserting 

17 ‘‘and section 2793’’ after ‘‘this part’’; and 

18 (ii) in paragraph (2), by inserting ‘‘or 

19 section 2793’’ after ‘‘this part’’ each place 

20 such term appears; and 

21 (2) in section 2761— 

22 (A) in subsection (a)— 

23 (i) in paragraph (1), by inserting 

24 ‘‘and section 2793’’ after ‘‘this part’’; and 

25 (ii) in paragraph (2)— 


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1 (I) by inserting ‘‘or section 

2 2793’’ after ‘‘set forth in this part’’; 

3 and 

4 (II) by inserting ‘‘and section 

5 2793’’ after ‘‘the requirements of this 

6 part’’; and 

7 (B) in subsection (b)— 

8 (i) by inserting ‘‘and section 2793’’ 

9 after ‘‘this part’’; and 

10 (ii) by inserting ‘‘and section 2793’’ 

11 after ‘‘part A’’. 

12 (c) EFFECTIVE DATE.—The amendment made by 

13 this section shall take effect on the date of enactment of 

14 this Act. 

Æ 


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