An Act To Repeal the Savings Offset Payment and To Establish the Blue Ribbon Commission on Potential Funding Sources for the Dirigo Health Program Further amend the bill by striking out everything after the title and before the summary and inserting in its place the following: , Be it enacted by the People of the State of Maine as follows: PART A Sec. A-I. 24-A MRSA §2736, sub·§3, 1[B, as amended by PL 2003, c. 469, Pt. E, §9, is further amended to read: B. The insurer must demonstrate in accordance with generally accepted actuarial principles and practices consistently applied that, as of a date no more than 210 days prior to the filing, the ratios of benefits incurred to premiums earned for those products average no less than 80 0b for the previous l2-month period. ~e~-~~~~~~-~R~6 ea±e~±a~~eBT-~-6a¥iB~6-~~~~~-pay~~--~aiG-~~--~e see~ieB-e9±6-m~st-ge-~~ea~eQ-as-iBe~~~eQ-e±aim6T Sec. A-2. 24-A MRSA §2736, sub·§4, 1[C, as amended by PL 2003, c. 469, Pt. E, §10, is further amended to read: Page I-LR2809(3) COMM/rrEE AMENDMENT
Maine Legislature, Session 122, LD 1935
Committee Amendment CA_B_S656 (Senate)
Amends: 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2736-C, 24-A MRSA §2808-B, 24-A MRSA §2839-B

COMMITTEE AMENDMENT "B" to S.P. 736, L.D. 1935, Bill, "An 
Act To Protect Health Insurance Consumers" 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Repeal the Savings Offset Payment and To Establish the 
Blue Ribbon 
Commission on Potential Funding Sources for 
the 
Dirigo Health Program' 
Further amend the bill by striking out everything after the 
title and before the summary and inserting in its place the 
following: 
, Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2736, sub·§3, 1[B, as amended by PL 2003, 
c. 469, Pt. E, §9, is further amended to read: 
B. 
The 
insurer 
must 
demonstrate 
in 
accordance 
with 
generally 
accepted 
actuarial 
principles 
and 
practices 
consistently applied that, as of a date no more than 210 
days prior to the filing, the ratios of benefits incurred to 
premiums earned for those products average no less than 80
0b 
for the previous l2-month period. 
~e~-~~~~~~-~R~6 
ea±e~±a~~eBT-~-6a¥iB~6-~~~~~-pay~~--~aiG-~~--~e 
see~ieB-e9±6-m~st-ge-~~ea~eQ-as-iBe~~~eQ-e±aim6T 
Sec. A-2. 24-A MRSA §2736, sub·§4, 1[C, as amended by PL 2003, 
c. 469, Pt. E, §10, is further amended to read: 
Page I-LR2809(3) 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT .. ($ .. to S.P. 736, L.D. 1935 
C. 
In any hearing conducted under this subsection, 
the 
Bureau of Insurance and any party asserting that the rates 
are excessive have the burden of establishing that the rates 
are 
excessive. 
The 
burden 
of 
proving 
that 
rates 
are 
adequateT and not unfairly discriminatory aBe--in---e-emp1-iaBee 
w~~R--~~--r~~r~~-~--~€€~ieB--e9±6 remains with the 
insurer. 
Sec. A-3. 24-A MRSA §2736-A, first 1(, as amended by PL 2003, c. 
469, Pt. E, §11, is further amended to read: 
If at any time the superintendent has reason to believe that 
a 
filing does 
not meet 
the 
requirements that rates not 
be 
excessive, 
inadequateT 
or 
unfairly discriminatory 
e~--Be~--iB 
eeJRPJ,iaBee-*:i~-h-~~-e9±6 or that the filing violates any of 
the provisions of chapter 23, the superintendent shall cause a 
hearing to be held. 
Sec. A-4. 24-A MRSA §2736-C, sub-§2, 1(F, 
as enacted by PL 
2003, c. 469, Pt. E, §12, is repealed. 
Sec. A-S. 24-A MRSA §2736-C, sub-§S, as amended by PL 2003, c. 
469, Pt. E, §13, is further amended to read: 
5. 
Loss ratios. 
For all policies and certificates issued 
on 
or 
after 
the 
effective 
date 
of 
this 
section, 
the 
superintendent shall disapprove any premium rates filed by any 
carrier, whether initial or revised, for an individual health 
policy unless it is anticipated that the aggregate benefits 
estimated to be paid under all the individual health policies 
maintained in force by the carrier for the period for which 
coverage is to be provided will return to policyholders at least 
65"0 of the aggregate premiums collected for those policies, as 
determined in accordance with accepted actuarial principles and 
practices and on the basis of incurred claims experience and 
earned premiums. 
Fe~--~R&-~~-~--~~~-€a~€~~a~4eB7--aBY 
6av~B~6-~~~-payJReB~6-~~-p~~~~aB~--~-~€€~i~-&~1-~-~--ae 
~~ea~ee-a6-iBe~~~ee-e±aiJR6T 
Sec. A-6. 24-A MRSA §2808-B, sub-§2-A, 1(C, as enacted by PL 
2003, c. 469, Pt. E, §16, is amended to read: 
C. 
Rates for small group health plans must be filed in 
accordance with this section and subsections 2-B and 2-C for 
premium rates effective on or after July 1, 
2004 T--&}H3-9-pt; 
~Ra~-~~-~i1-i~-e~-~~~-E9~-~~-~FG~p-£€a~~£-~~-a~e 
Be~-~~~~-t,e-~~~--~~-aBy-~~~~~-e~~6e~-~-e~ 
aBY-~€€~~-~~-~Ba~-~~~-paym&Bt,-~~~~aB~-~~-6~B6eet,ieB 
6-8T-pa~a~~apB-~~~~~~~~-~~-~a~&-e~~eet,iv&-BeEe~e 
J~±y-h-6GG9 . 
COMMITTEE AMENDMENT 
.:.Ji> 
~-'. "~~~ 
'''i''' 
COMMITTEE AMENDMENT '-f>" to S.P. 736, L.D. 1935 
Sec. A-7. 24-A MRSA §2808-B, sub-§2-B, ~A, as enacted by PL 
2003, c. 469, Pt. E, §16, is amended to read: 
A. 
The superintendent shall disapprove any premium rates 
filed by any carrier, whether initial or revised, 
for 
a 
small group health plan unless it is anticipated that the 
aggregate benefits estimated to be paid under all the small 
group health plans maintained in force by the carrier for 
the period for which coverage is to be provided will return 
to policyholders at least 75% 
of the aggregate premiums 
collected for those policies, as determined in accordance 
with accepted actuarial principles and practices and on the 
basis of incurred claims experience and earned premiums. 
~e~ 
tae--~~~-~~--tais--€a~€~~a~iga7--~--~~~~~--effse~ 
paymeRts-~~-p~r&~a&~-~~-&&G~~&-~~~~-~-ee-~~~~-8S 
iaetlEEeEl-e;!,aimsT 
Sec. A-8. 24-A MRSA §2808-B, sub-§2-B, ~D, as enacted by PL 
2003, c. 469, Pt. E, §16, is repealed. 
Sec. A-9. 24-A MRS A §2808-B, sub-§2-B, V, as enacted by PL 
2003, c. 469, Pt. E, §16, is amended to read: 
F. 
Any rate hearing conducted with respect to filings that 
meet 
the 
criteria in 
paragraph 
E 
is 
subject 
to 
this 
paragraph. 
(1) 
A person requesting a hearing shall provide the 
superintendent with a written statement detailing the 
circumstances that justify a hearing, notwithstanding 
the satisfaction of the criteria in paragraph E. 
(2) 
If the superintendent decides to hold a hearing, 
the 
superintendent shall issue 
detailing the circumstances that 
notwithstanding the satisfaction 
paragraph E. 
a 
written statement 
justify a 
hearing, 
of the criteria in 
(3) 
In any hearing conducted under this paragraph, the 
bureau 
and 
any party asserting that the rates 
are 
excessive have 
the burden of establishing that the 
rates are excessive. 
The burden of proving that rates 
are adequateT and not unfairly discriminatory 8aa--i:a 
eemp;!'ia:aee--~~~-~~--Fe~tliFeme:ats--~--~~--e9±~ 
remains with the carrier. 
Sec. A-IO. 24-A MRSA §2839-B, sub-§2, as enacted by PL 2003, 
c. 469, Pt. E, §17, is amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'i!>" to S.P. 736, L.D. 1935 
2. 
Annual filing. 
Every carrier offering group health 
insurance specified in subsection 1 shall annually file with the 
superintendent on or before April 30th a certification signed by 
a member in good standing of the American Academy of Actuaries or 
a successor organization that the carrier' s rating methods and 
practices are in accordance with generally accepted actuarial 
principles 
and 
with 
the 
applicable 
actuarial 
standards 
of 
practice as promulgated by an actuarial standards board. 
'IRe 
Ei~ie~-~-a~se-~~~~~-ERaE-~~-ea~~ie~-~-iee±~aea-~~-its 
eH~e~ieeee--aa~--~~1~&-~~~-~~-~--~e€~¥€~~--e~--EBe6e 
savia~s-e~~6e~-~~-~i~~-~1t~-&ee&i~a-e9±~T The filing 
also must state the number of policyholders, certificate holders 
and dependents, as of the close of the preceding calendar year, 
enrolled in large group health insurance plans offered by the 
carrier. A filing and supporting information are public records 
except as provided by Title 1, section 402, subsection 3. 
Sec. A·H. 24·A MRSA §6908, sub·§2, ~B, as enacted by PL 2003, 
c. 469, Pt. A, §8, is repealed. 
Sec. A·12. 24·A MRSA §6913, as amended by PL 2005, c. 400, 
Pt. A, §§10 to 13 and Pt. C, §9, is repealed. 
Sec. A·13. 24·A MRSA §6915, as amended by PL 2005, c. 386, 
Pt. D, §3, is further amended to read: 
§69l5. Dirigo Health Enterprise Fund 
The 
Dirigo 
Health 
Enterprise 
Fund 
is 
created 
as 
an 
enterprise fund for the deposit of any funds advanced for initial 
operating expenses, payments made by employers and individualsT 
aey-6a¥~R~6-~~~~€~-~~~~~-~-&ee&iea-e9±~ and any 
funds received from any public or private source. 
The fund may 
not lapse, but must be carried forward to carry out the purposes 
of this chapter. 
Sec. A·14. 24·A MRSA §6951, first~, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
The Maine Quality Forum, referred to in this subchapter as 
"the forum," is established within Dirigo Health. 
The forum is 
governed by the board with advice from the Maine Quality Forum 
Advisory Council pursuant to section 6952. 
The forum must be 
fundedT-~-±ea6t--1&-~a~~7--&~re~~-~£€--&avi~&-~~~--~ayffieHES 
ffiaee-F~~~~~-~~~&~a-e9±~ within the limitations of available 
funds. 
Except 
as 
provided 
in 
section 
6907, 
subsection 
2, 
information obtained by the forum is a public record as provided 
by Title 1, chapter 13, subchapter 1. 
The forum shall perform 
the following duties. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'Je)' to S.P. 736, L.D. 1935 
Sec. A-I5. 
Application to savings offset payment for plan years 
beginning on or after January 1, 2006. This Part applies retroactively 
to any savings offset payment that has been assessed and paid 
pursuant to the Maine Revised Statutes, Title 24-A, section 6913 
for plan years beginning on or after January 1, 2006. 
No later 
than 30 days following the effective date of this Act, Dirigo 
Health 
shall 
issue 
refunds 
of 
any 
savings 
offset 
payments 
collected 
from 
health 
insurance 
carriers, 
3rd-party 
administrators and employee benefit excess insurance carriers. 
PART B 
Sec. B-1. Commission established. The Blue Ribbon Commission on 
Potential Funding Sources for the Dirigo Health Program, referred 
to in this Part as "the commission," is established. 
Sec. B-2. Membership. The commission consists of 11 members 
appointed as follows: 
1. Two members of the Senate appointed by the President of 
the 
Senate 
and 
members 
of 
the 
House 
of 
Representatives 
appointed by the Speaker of the House. At least one legislative 
member appointed must be a member of the Joint Standing Committee 
on Insurance and Financial Services and at least one legislative 
member appointed must be a member of the Joint Standing Committee 
on Appropriations and Financial Affairs. Legislative appointments 
under this subsection must be representative of the bipartisan 
interests of the Legislature; 
2. Two members appointed by the President of the Senate, one 
member representing the interests of employers recommended by a 
statewide organization of businesses and employers and one member 
representing health insurance carriers recommended by a statewide 
association of health plans; 
3. 
Two 
members appointed by the Speaker of the House of 
Representatives, one member representing hospitals recommended by 
a 
statewide hospital association and one 
member 
representing 
insurance producers; and 
4. 
Three 
members 
appointed by the Governor, 
one 
member 
representing the Board of Directors of Dirigo Health, one member 
representing employers enrolled in the Dirigo Health Program and 
one member representing consumers. 
Sec. B-3. Chairs. 
The first-named Senator is the Senate chair 
of the commission and the first-named member of the House is the 
House chair of the commission. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ':fJ" to S. P. 736, L. D. 1935 
Sec. B-4. Appointments. All appointments must be made no later 
than 30 
days following the effective date of this Part. 
The 
appointing authorities shall notify the Executive Director of the 
Legislative Council 
upon making their appointments. 
When 
the 
appointment 
of 
all 
members 
is 
complete, 
the 
chair 
of 
the 
Legislative Council shall call and convene the first meeting of 
the commission no later than August 15, 2006. 
Sec. B-S. Duties. 
The commission shall study potential funding 
mechanisms for the Dirigo Health Program and make recommendations 
on a long-term funding mechanism. In conducting the study, the 
commission shall: 
1. 
Evaluate the current savings offset payment funding 
mechanism, funding structure and formulas and methodology used to 
calculate the amount of aggregate measurable cost savings from 
the Dirigo Health Program and the amount of the savings offset 
payment: 
2. 
Study the impact of the savings offset payment on health 
insurance carriers and 3rd-party administrators, including the 
impact of the savings offset payment on self-insured employers 
and policyholders, and make recommendations on whether carriers 
and administrators may "pass through" the savings offset payment 
and in what manner; 
3. 
Evaluate 
matching funds as 
Heal th Program as 
enacted in 2003; 
the 
viability 
of 
using 
federal 
Medicaid 
an ongoing source of funding for the Dirigo 
originally envisioned when the legislation was 
4. 
Develop and test other mechanisms for funding subsidies 
for the Dirigo Health Program by establishing a 
schedule of 
enrollment goals and targets to eliminate Maine's uninsured under 
each mechanism, testing each mechanism for viability and ability 
to meet targets, projecting expected subsidy needs annually and 
funding sources, projecting anticipated product rates and costs 
to consumers and calculating the administrative needs and costs; 
and 
5. 
Make 
recommendations 
for 
funding 
the 
Dirigo Health 
Program. 
Sec. B-6. Meetings. The commission is authorized to meet at 
least 4 times in 2006 and with approval of the presiding officers 
of the Legislature may hold additional meetings and may meet at 
various locations throughout the State. Meetings must be open to 
the 
public. 
The 
commission 
shall 
consult 
stakeholders 
for 
information and assistance in gathering information related to 
the duties described in section 5. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ':1>" to S. P. 736, L. D. 1935 
Sec. B-7. Staff assistance. Upon approval of the Legislative 
Council, the Office of Policy and Legal Analysis and the Office 
of Fiscal and Program Review shall provide staffing assistance to 
the commission. 
Sec. B-S. Compensation. Legislative members are entitled to 
receive the legislative per diem and reimbursement of necessary 
expenses 
for their attendance at authorized meetings 
of 
the 
commission. 
Public members not otherwise compensated by their 
employers or other entities that they represent are entitled to 
receive reimbursement of necessary expenses and a per diem equal 
to the legislative per diem for their attendance at authorized 
meetings 
of 
the 
commission. 
The 
Executive 
Director 
of 
the 
Legislative Council shall administer the commission's budget. 
Sec. B-9. Budget. 
The 
chairs 
of 
the 
commission, 
with 
assistance 
from 
the 
Executive 
Director 
of 
the 
Legislative 
Council, 
shall administer the commission's budget. 
Within 10 
days after its first meeting, the commission shall present a work 
plan and proposed budget to the Legislative Council for its 
approval. The commission may not incur expenses that would result 
in the commission's exceeding its approved budget. Upon request 
from the commission, the Executive Director of the Legislative 
Council shall promptly provide the commission chairs and staff 
with a status report on the commission's budget, expenditures 
incurred and paid and available funds. 
Sec. B-IO. Receipt of outside funds authorized. The commission may 
seek outside funds to fund costs of the commission other than 
authorized per diem and expenses of the members authorized by 
section 8. Contributions to support the work of the commission 
may not be accepted from any party having a pecuniary or other 
vested interest in the outcome of the matters being studied. Any 
person, other than a state agency, desiring to make a financial 
or in-kind contribution must certify to the Legislative Council 
that it has no pecuniary or other vested interest in the outcome 
of the study. 
The certification must be 
made 
in the manner 
prescribed by the Legislative Council. 
All 
contributions are 
subject 
to 
approval 
by 
the 
Legislative 
Council. 
All 
funds 
accepted must be forwarded to the Executive Director of the 
Legislative Council along with an accounting record that includes 
the amount of the funds, the date the funds were received, from 
whom the funds were received and the purpose of or any limitation 
on 
the 
use 
of 
the 
funds. 
The 
Executive 
Director 
of 
the 
Legislative Council shall administer any funds received by the 
commission. 
Sec. B-11. Report. 
No 
commission 
shall 
submit 
later than 
November 
a 
report 
with 
1, 
2006, 
findings 
the 
and 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ".s;. to S.P. 736, L.D. 1935 
recommendations, 
including 
suggested 
legislation, 
for 
presentation to the joint standing committee of the Legislature 
having jurisdiction over insurance and financial services matters 
and 
the 
joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over 
appropriations 
and 
financial 
affairs. 
The 
joint standing committee of the Legislature having jurisdiction 
over 
insurance 
and financial services matters 
and the 
joint 
standing committee of the Legislature having jurisdiction over 
appropriations 
and 
financial 
affairs 
may 
each 
report 
out 
legislation to the 123rd Legislature based on the commission' s 
report. 
Sec. 
B-12. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
following 
LEGISLATURE 
Study Commissions -
Funding 
0444 
Initiative: 
Provides funds for the per diem and expenses of the 
Blue Ribbon Commission on the Potential Funding Sources for the 
Dirigo Health Program. 
GENERAL FUND 
Personal Services 
All Other 
GENERAL FUND TOTAL 
Study Commissions -
Funding 
0444 
2005-06 
$0 
$0 
$0 
2006-07 
$1, 100 
$4,850 
$5,950 
Initiative: 
Provides a base allocation of $500 in fiscal year 
2006-07 in the event that outside funding is received to support 
the work of the commission. 
OTHER SPECIAL REVENUE FUNDS 
2005-06 
2006-01 
All Other 
$0 
$500 
OTHER SPECIAL REVENUE FUNDS TOTAL 
$0 
$500 
LEGISLATURE 
DEPARTMENT TOTALS 
2005-06 
2006-01 
GENERAL FUND 
$0 
$5,950 
OTHER SPECIAL REVENUE FUNDS 
$0 
$500 
DEPARTMENT TOTAL -
ALL FUNDS 
$0 
$6,450' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,f!, .. to S.P. 736, L.D. 1935 
SUMMARY 
This amendment is the minority report of the committee and 
replaces 
the bill. 
The 
amendment 
repeals the 
savings offset 
payment as a source of funding subsidies for the Dirigo Health 
Program. 
The 
amendment requires that the subsidy program for 
DirigoChoice enrollees and the Maine Quality Forum, which were 
funded with the savings offset payment, 
continue with funding 
from 
existing 
resources 
of 
the 
Dirigo 
Health 
Program. 
The 
amendment also makes the repeal of the savings offset payment 
retroactive for plan years beginning on or after January 1, 2006 
and 
requires 
the 
Dirigo 
Health 
Agency 
to 
refund 
to 
health 
insurance carriers, 3rd-party administrators and employee benefit 
excess insurance carriers any savings offset payments already 
collected. 
The amendment also establishes the Blue Ribbon Commission on 
Potential Funding Sources for the Dirigo Health Program. 
The 
amendment 
requires 
the commission to study potential funding 
sources and make recommendations for a long-term funding source. 
The commission is required to submit its report by November L 
2006. 
The 
amendment 
adds 
an 
appropriations 
and 
allocations 
section to reflect the costs of the commission to the Legislature. 
The 
amendment 
removes 
the 
emergency 
preamble 
and 
the 
emergency clause. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/28/06 ~ae. 
LD 1935 
LR 2809(03) 
An Act To Protect Health Insurance Consumers 
Fiscal Note for Bill as Amended by Committee Amendment 13;' 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Minority Report 
Fiscal Note 
Current Costs - Legislative Study 
2005-06 
2006-07 
Projections 
2007-08 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Other Special Revenue Funds 
Revenue 
$0 
$0 
$0 
$5,950 
$5,950 
$500 
$0 
$0 
$0 
Projections 
2008-09 
$0 
$0 
$0 
Other Funds 
($43,700,000) 
($43,700,000) 
($43,700,000) 
Legislative Study 
The projected costs to fund the general operating expenses of the Blue Ribbon Commission on the Potential Funding 
Sources for the Dirigo Health Program are $5,950 in fiscal year 2006-07. Since the Legislature's budget includes 
$20,000 in fiscal year 2006-07 for legislative studies and the Council has already committed this amount, a General 
Fund appropriation to the Legislature of $5,950 in fiscal year 2006-07 for this study has been included in this 
amendment. There is also a base allocation of $500 in fiscal year 2006-07 in the event that outside funding is received 
to support the work of the commission. 
Fiscal Detail and Notes 
Assumes the elimination of the savings offset payment (SOP) would reduce Dirigo Health Enterprise Fund revenue 
retroactive to include the refund of any FY 2005-06 collections. For the purposes of this fiscal estimate, the 2007 SOP 
and future year SOPs are assumed to be equal to the 2006 SOP. While eliminating the savings offset payment, the bill 
does not specify savings to offset the reduction in revenues. The program does have existing authority to keep program 
spending within available resources. Any additional costs to the Bureau of Insurance in the Department of 
Professional and Financial Regulation resulting from the bill can be absorbed by the Bureau utilizing existing 
budgetary resources. 
LR2809(3) - Fiscal Note - Page 1 of 1