An Act To Protect Health Insurance Consumers
Maine Legislature, Session 122, LD 1935
Committee: Insurance and Financial Services
Sponsors: MARTIN, BRAUTIGAM, BRYANT, EDMONDS, MAYO, CUMMINGS, HARLOW, MARRACHE, PILON, RICHARDSON
Amends: 24-A MRSA §2736-C, 24-A MRSA §2808-B, 24-A MRSA §2839-B, 24-A MRSA §6913

Legislative Document 
No. 1935 
S.P.736 
In Senate, January 4,2006 . 
An Act To Protect Health Insurance Consumers 
(EMERGENCY) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MARTIN of Aroostook. 
Cosponsored by Representative BRAUTIGAM of Falmouth and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: BRYANT of Oxford, President EDMONDS of Cumberland, MAYO of Sagadahoc, 
Representatives: BRYANT of Windham, CUMMINGS of Portland, HARLOW of Portland, 
MARRACHE of Waterville, PILON of Saco, Speaker RICHARDSON of Brunswick. 
Printed on ft!cydeJ p~per 
Emergency preamble. Whereas, acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies: and 
Whereas. the Dirigo Health Program enacted in 
2003 
has 
resulted in aggregate measurable cost savings of $43.7 million as 
determined by the Superintendent of Insurance in an adjudicatory 
ruling on October 29, 2005: and 
Whereas, these cost 
savings 
offset 
payment 
3rd-party administrators 
carriers: and 
savings will 
to 
be 
paid 
and employee 
be recovered through the 
by 
insurance 
carriers, 
benefit excess insurance 
Whereas, these cost savings 
insurance premium rates for the 
consumers; and 
Whereas, insurance carriers, 
employee benefit excess carriers 
offset payment in April 2006: and 
should be reflected in health 
benefi t 
of premium payers and 
3rd-party administrators 
and 
will begin paying the savings 
Whereas. the amount of the savings offset payment must not 
be passed on to premium payers and consumers in increased premium 
rates; and 
Whereas. in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2736-C, sub-§2. 1fF, as enacted by PL 2003, 
c. 469, Pt. E, §12, is amended to read: 
F. 
A carrier that adjusts its rate shall account for t;He 
SaYiB~S-~~~~-~-eF any recovery in tHat the savings 
offset 
payment 
in its 
experience 
consistent 
with 
this 
section and section 6913, but the carrier may not adjust its 
rate to reflect the savings offset payment amount paid by 
the carrier. 
Sec. 2. 24-A MRSA §2808-B. sub-§2-B. ~n. as enacted by PL 
2003, c. 469, Pt. E, §16, is amended to read: 
D. 
A carrier that adjusts its rate shall account for the 
SaYiB~S-~~~-~&~-eF any recovery of that the 
savings 
offset 
payment 
in 
its 
experience 
consistent 
with 
this 
section and section 6913, but the carrier may not adjust it~ 
rate to reflect the savings offset payment amount paid by 
the carrier. 
Sec. 3. 24-A MRSA §2839-B, sub-§2, as enacted by PL 2003, c. 
469, Pt. E, §17, is amended to read: 
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 I 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. 
The 
filing must certify that the carrier has not included in its 
experience any savings offset payments paid in accordance with 
section 6913. 
The filing must also certify that the carrier has 
included 
in its 
experience 
any 
savia~s--e~~set--~aymeats--eF 
recovery of these savings offset payments consistent with section 
6913. 
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. 4. 24-A MRSA §6913, sub-§2, as repealed and replaced by 
PL 2005, c. 400, Pt. A, §11, is amended to read: 
2. 
Determination of savings offset amount. The board shall 
determine annually a savings offset amount to be paid by health 
insurance carriers, employee benefit excess insurance carriers 
and 
3rd-party 
administrators, 
not 
including 
carriers 
and 
3rd-party 
administrators 
with 
respect 
to 
accidental 
injury, 
specified disease, hospital indemnity, dental, vision, disability 
income, 
long-term care, 
Medicare 
supplement or other limited 
benefit health insurance. 
The board shall determine the savings 
offset amount in accordance with the following: 
A. 
Not later than April of each year, 
the board shall 
prospectively determine the 
savings offset amount 
to 
be 
applied during each 12-month calendar year period; 
B. To determine the savings offset amount, the board shall 
use the criteria and reports described in subsections 7 and 
8; 
C. The savings offset amount must reflect and may not exceed 
aggregate measurable cost savings, 
as determined by 
the 
board pursuant to subsection 1; and 
D. The savings offset amount calculation is limited to the 
amount of funds necessary to provide subsidies pursuant to 
section 
6912 
and 
to 
support 
the 
Maine 
Quality 
Forum 
established in section 6951 
and may 
not include general 
administrative expenses of Dirigo Health, except for general 
administrative expenses of the Maine Quality Forum. 
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Sec. 5. 24-A MRSA §6913, sub-§9, as enacted by PL 
2003, c. 
469, Pt. A, §8, is amended to read: 
9. 
Demonstration of recovery of savings offset payments. 
As provided in sections 2736-C, 
2808-B and 2839-B, 
the claims 
experience used to determine any filed premiums or rating formula 
may not reflect the savings offset payment amount determined in 
accordance with subsection 2, but must reasonably reflect, 
in 
accordance with accepted actuarial standards, known changes and 
9ffse~s-iR recovery of savings offset payments by the carrier to 
health care providers in this State, including any reduction or 
avoidance of bad debt and charity care costs to health care 
providers in this State as a result of the operation of Dirigo 
Health 
and 
any 
increased enrollment 
due 
to 
an expansion in 
MaineCare eligibility occurring after June 30, 2004 as determined 
by the board consistent with subsection 1. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved. 
SUMMARY 
This bill prohibits insurance carriers from including the 
costs of the savings offset payment used to support the Dirigo 
Health Program in health insurance premium rates.