An Act To Continue Maine's Leadership in Covering the Uninsured
Maine Legislature, Session 123, LD 2247
Committee Amendment CA_A-SA_B_S637 (Senate)
Amends: 24-A MRSA §2736-C, 24-A MRSA §6913, 24-A MRSA §6915, 24-A MRSA §6908, 24-A MRSA §69, 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2

SENATE AMENDMENT ,,13 " to COMMITTEE AMENDMENT "A" to H.P. 
1608, L.D. 2247, Bill, "An Act To Continue Maine's Leadership in Covering the 
Uninsured" 
Amend the amendment by striking out everything after the title and before the 
summary and inserting the following: 
'Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'PART A 
Sec. A-I. 24-A MRS A §2736-C, sub-§2, ~, as enacted by PL 1993, c. 477, Pt. 
e, § 1 and affected by Pt. F, § 1, is amended to read: 
B. 
A carrier may not vary the premium rate due to the gender, health status 
geographic area, claims experience or policy duration of the individual. A carrier 
may vary the premium rate based on health status, age, occupation or industry and 
tobacco use only as permitted in paragraph D. 
Sec. A-2. 24-A MRSA §2736-C, sub-§2, ,C, as amended by PL 2001, c. 410, 
Pt. A, § 1 and affected by § 1 0, is further amended to read: 
C. 
A carrier may vary the premium rate due to smoking status and family 
membership. 
The superintendent may adopt rules setting forth appropriate 
methodologies regarding rate disoounts based on smoking status. Rules adopted 
pursuant to this paragraph are rOHtine teehnioal rules as defined in Title 5, chapter 
J75, subchapter II A. 
Sec. A-3. 24-A MRSA §2736-C, sub-§2, ,-D, as amended by PL 2001, c. 410, 
Pt. A, §2 and affected by §10, is further amended to read: 
D. A carrier may vary the premium rate due to age, health status, occupation or 
industry and geographic area only under the following schedule and within the listed 
percentage bands and tobacco use in accordance with the following limitations. 
Page J- 123LR3143(09)-1 
SENATE AMENDMENT 
SENATE AMENDMENT" i>" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between December 1, 1993 and 
July 14, 1994, the premium rate may not deviate above or below the community 
rate filed by the carrier by more than 50%. 
(2) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between July 15, 1994 and July 
14, 1995, the premium rate may not deviate above or below the community rate 
filed by the carrier by more than 33%. 
(3) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State after July 15, 1995, the premium 
rate may not deviate above or below the community rate filed by the carrier by 
more than 20%. 
(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State after January 1, 2010, the 
premium rate may not deviate above or below the community rate filed by the 
carrier by more than 40%. 
(5) A variation in rate is not permitted on the basis of changes in health status 
after a policy, contract or certificate is issued or renewed. 
Sec. A-4. 24-A MRSA §2736-C, sub-§2, ~G is enacted to read: 
G. A carrier that offered individual health plans prior to January 1, 2010 may close 
its individual book of business sold prior to January 1, 2010 and may establish a 
separate community rate for individuals applying for coverage under an individual 
health plan on or after January 1, 2010. 
Sec. A-S. 24-A MRSA §2736-C, sub-§3, as corrected by RR 2001, c. 1, §30, is 
amended to read: 
3. Guaranteed issuance and guaranteed renewal. Carriers providing individual 
health plans must offer all health plans approved by the Maine Individual High-risk 
Reinsurance Pool Association pursuant to section 3908, subsection 1 as a condition of 
offering individual health plans in this State. 
Carriers must meet the following 
requirements on issuance and renewal. 
A. 
Coverage issued through the Maine Individual High-risk Reinsurance Pool 
Association established pursuant to chapter 54 must be guaranteed to all residents of 
this State other than those eligible without paying a premium for Medicare Part A. 
On or after January 1, 1998, such coverage must be guaranteed to all legally 
domiciled federally eligible individuals, as defined in section 2848, regardless of the 
length of time they have been legally domiciled in this State. Except for federally 
eligible individuals, such coverage need not be issued to an individual whose 
coverage was terminated for nonpayment of premiums during the previous 91 days or 
for fraud or intentional misrepresentation of material fact during the previous 12 
months. 
When a managed care plan, as defined by section 4301-A, provides 
coverage a carrier may: 
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(1) Deny coverage to individuals who neither live nor reside within the approved 
service area of the plan for at least 6 months of each year; and 
(2) 
Deny coverage to individuals if the carrier has demonstrated to the 
superintendent's satisfaction that: 
(a) The carrier does not have the capacity to deliver services adequately to 
additional enrollees within all or a designated part of its service area because 
of its obligations to existing enrollees; and 
(b) The carrier is applying this provision uniformly to individuals and groups 
without regard to any health-related factor. 
A carrier that denies coverage in accordance with this paragraph may not enroll 
individuals residing within the area subject to denial of coverage or groups or 
subgroups within that area for a period of 180 days after the date of the first 
denial of coverage. 
B. Renewal is guaranteed, pursuant to section 2850-B. 
C. A carrier is exempt from the guaranteed issuance requirements of paragraph A 
provided that the following requirements are meh~ 
(1) The carrier does not issue or deliver any new individual health plans on or 
after the effective date of this section; 
(2) If any individual health plans that were not issued on a guaranteed renewable 
basis are renewed on or after December 1, 1993, all such policies must be 
renewed by the carrier and renewal must be guaranteed after the first such 
renewal date; and 
(3) The carrier complies with the rating practices requirements of subsection 2. 
D. Notwithstanding paragraph A, carriers offering supplemental coverage for the 
Civilian Health and Medical Program for the Uniformed Services, CHAMPUS, are 
not required to issue this coverage if the applicant for insurance does not have 
CHAMPUS coverage. 
E. An individual may not be denied health insurance due to age or gender. This 
paragraph may not be construed to require a carrier to actively market health 
insurance to an individual 65 years of age or older. 
Sec. A-6. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
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MAINE INDIVIDUAL HIGH-RISK REINSURANCE POOL 
ASSOCIATION 
§3901. Short title 
This chapter is known and may be cited as "the Maine Individual High-risk 
Reinsurance Pool Association Act. " 
§3902. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Association. "Association" means the Maine Individual High-risk Reinsurance 
Pool Association established in section 3903. 
2. Board. "Board" means the board of directors of the association. 
3. Covered person. "Covered person" means an individual resident of this State, 
exclusive of dependents, who: 
A. Is eligible to receive benefits from an insurer; 
B. 
Is eligible for benefits under the federal Health Insurance Portability and 
Accountability Act of 1996; or 
C. 
Has been certified as eligible for federal trade adjustment assistance or for 
pension benefit guarantee corporation assistance, as provided by the federal Trade 
Adjustment Assistance Refonn Act of2002. 
4. Dependent. "Dependent" means a resident spouse, a domestic partner as defined 
in section 2832-A, subsection 1 or a dependent child as defined in section 2742-B, 
subsection 1. 
5. Health maintenance organization. "Health maintenance organization" means an 
organization authorized under chapter 56 to operate a health maintenance organization in 
this State. 
6. Insurer. "Insurer" means an entity that is authorized to write medical insurance 
or that provides medical insurance in this State. 
"Insurer" includes an insurance 
company, nonprofit hospital and medical service organization, fraternal benefit society, 
health maintenance organization, self-insurance arrangement that provides health care 
benefits in this State to the extent allowed under the federal Employee Retirement Income 
Security Act of 1974, 3rd-party administrator, multiple-employer welfare arrangement, 
any other entity providing medical insurance or health benefits subject to state insurance 
regulation, any reinsurer reinsuring health insurance in this State or the Dirigo Health 
Program established in chapter 87 or any other state-run or state-sponsored health benefit 
program whether fully insured or self-funded. 
7. Medical insurance. "Medical insurance" means a hospital and medical expense-
incurred policy, nonprofit hospital and medical service plan, health maintenance 
organization subscriber contract or other health care plan or arrangement that pays for or 
furnishes medical or health care services by insurance or otherwise, whether sold as an 
individual or group policy. "Medical insurance" does not include accidental injury, 
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specified disease, hospital indemnity, dental, vision, disability income, Medicare 
supplement, long-term care or other limited benefit health insurance or credit insurance; 
coverage issued as a supplement to liability insurance; insurance arising out of workers' 
compensation or similar law; or automobile medical payment insurance or insurance 
under which benefits are payable with or without regard to fault and that is statutorily 
required to be contained in any liability insurance policy or equivalent self-insurance. 
8. Medicare. "Medicare" means coverage under both Parts A and B of Title XVIII 
of the Social Security Act, 42 United States Code, Section 1395 et seq., as amended. 
9. Plan. "Plan" means the medical insurance plan adopted by the board pursuant to 
this chapter. 
10. Producer. "Producer" means a person who is licensed to sell health insurance in 
this State. 
11. Resident. "Resident" means an individual who: 
A. Is legally located in the United States and has been legally domiciled in this State 
for a period established by the board and subject to the approval of the superintendent 
and not to exceed one year; 
B. Is legally domiciled in this State on the date of application to the plan and is 
eligible for enrollment in the risk pool under this chapter as a result of the federal 
Health Insurance Portability and Accountability Act of 1996; or 
C. Is legally domiciled in this State on the date of application to the plan and has 
been certified as eligible for federal trade adjustment assistance or for pension benefit 
guarantee corporation assistance, as provided by the federal Trade Adjustment 
Assistance Reform Act of 2002. 
12. Reinsurer. "Reinsurer" means an insurer from whom a person providing health 
insurance for a resident procures insurance for itself with the insurer with respect to all or 
part of the medical insurance risk of the person. "Reinsurer" includes an insurer that 
provides employee benefits excess insurance. 
13. Third-party administrator. "Third-party administrator" means an entity that is 
paying or processing medical insurance claims for a resident. 
§3903. Maine Individual High-risk Reinsurance Pool Association 
1. 
Risk pool established. 
The Maine Individual High-risk Reinsurance Pool 
Association is established as a nonprofit legal entity. As a condition of doing business, 
every insurer that has sold medical insurance within the previous 12 months or is actively 
marketing a medical insurance policy in this State shall participate in the association. 
The Dirigo Health Program established in chapter 87 and any other state-run or state-
sponsored health benefit program shall also participate in the association. 
2. Board of directors. The association is governed by a board of directors In 
accordance with the following. 
A. The board consists of 11 members appointed as follows: 
(1) Six members appointed by the superintendent, of whom: 
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(a) Two members must be chosen from the general public and may not be 
associated with the medical profession, a hospital or an insurer; 
(b) Two members must represent medical providers; 
(c) One member must represent health insurance producers; and 
(d) One member must represent a statewide association representing small 
businesses that receives the majority of its funding from persons and 
businesses in the State. 
A board member appointed by the superintendent may be removed at any time 
without cause; and 
(2) Five members appointed by insurers belonging to the association, at least 2 
of whom are domestic insurers. 
B. Tenns for initial appointments to the board are as follows. Of those members of 
the board appointed by the superintendent, 2 members serve for a term of one year, 2 
members for a term of 2 years and 2 members for a term of 3 years. Of those 
members appointed by insurers, one member serves for a term of one year, one 
member serves for a term of 2 years and one member serves for a term of 3 years. 
The appointing authority shall designate the period of service of each initial 
appointee at the time of appointment. All terms after the initial terms must be for 3 
years. 
C. The board shall elect one of its members as chair. 
D. Board members may be reimbursed from funds of the association for actual and 
necessary expenses incurred by them as members but may not otherwise be 
compensated for their services. 
3. Plan of operation; rules. The association shall adopt a plan of operation in 
accordance with the requirements of this chapter and submit its articles, bylaws and 
operating rules to the superintendent for approval. If the association fails to adopt the 
plan of operation and suitable articles and bylaws within 90 days after the appointment of 
the board, the superintendent shall adopt rules to effectuate the requirements of this 
chapter, and those rules remain in effect until superseded by a plan of operation and 
articles and bylaws submitted by the association and approved by the superintendent. 
Rules adopted pursuant to this subsection by the superintendent are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
4. Immunity. A board member is not liable and is immune from suit at law or 
equity for any conduct performed in good faith that is within the subject matter over 
which the board has been given jurisdiction. 
§3904. Liability and indemnification 
1. Liability. The board and its employees may not be held liable for any obligations 
of the association. A cause of action may not arise against the association; the board, its 
agents or its employees; any insurer belonging to the association or its agents, employees 
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or producers; or the superintendent for any action or omission in the performance of 
powers and duties pursuant to this chapter. 
2. 
Indemnification. 
The board in its bylaws or rules may provide for 
indemnification of, and legal representation for, its members and employees. 
§3905. Duties and powers of association 
1. Duties. The association shall: 
A. 
Establish administrative and accounting procedures for the operation of the 
association; 
B. Establish procedures under which applicants and participants in the plan may 
have grievances reviewed by an impartial body and reported to the board; 
C. Select a plan administrator in accordance with section 3906; 
D. Establish procedures for the handling and accounting of pool assets; 
E. Collect assessments as provided in section 3907. The level of payments must be 
established by the board. Assessments must be collected pursuant to the plan of 
operation approved by the board. In addition to the collection of such assessments, 
the association shall collect an organizational assessment or assessments from all 
insurers as necessary to provide for expenses that have been incurred or are estimated 
to be incurred prior to receipt of the first calendar year assessments. Organizational 
assessments must be equal in amount for all insurers but may not exceed $500 per 
insurer for all such assessments. Assessments are due and payable within 30 days of 
receipt of the assessment notice by the insurer; and 
F. Comply with all reserve requirements and solvency requirements applicable to 
insurers that offer fully insured products in the event that the association offers a self-
funded health plan. 
2. Powers. The association may: 
A. Exercise powers granted to insurers under the laws of this State; 
B. 
Enter into contracts as necessary or proper to carry out the proVISIOns and 
purposes of this chapter, including the authority, with the approval of the 
superintendent, to enter into contracts with similar organizations in other states for 
the joint performance of common administrative functions or with persons or other 
organizations for the performance of administrative functions; 
C. Sue or be sued, including taking any legal actions necessary or proper to recover 
or collect assessments due the association; 
D. Take any legal actions necessary to avoid the payment of improper claims against 
the association or the coverage provided by or through the association, to recover any 
amounts erroneously or improperly paid by the association, to recover any amounts 
paid by the association as a result of mistake of fact or law or to recover other 
amounts due the association; 
E. Define the health benefit plans for which reinsurance will be provided under this 
chapter; 
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F. Appoint appropriate legal, actuarial and other committees as necessary to provide 
technical assistance in the operation of the plan, policy or other contract design and 
any other function within the authority of the association; 
G. 
Borrow money to effect the purposes of the association. Any notes or other 
evidence of indebtedness of the association not in default must be legal investments 
for insurers and may be carried as admitted assets; 
H. Establish rules, conditions and procedures for reinsuring risks of insurers under 
the pool in accordance with section 3909; 
I. Provide for reinsurance of risks incurred by the association. The provision of 
reinsurance may not subject the association to any of the capital or surplus 
requirements, if any, otherwise applicable to reinsurers; and 
J. Apply for funds or grants from public or private sources, including federal grants 
provided to qualified high-risk reinsurance pools. 
3. Additional duties and powers. The superintendent may, by rule, establish 
additional powers and duties of the board and may adopt such rules as are necessary and 
proper to implement this chapter. Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
4. Review for solvency. The superintendent shall review the operations of the 
association at least every 3 years to determine its solvency. 
If the superintendent 
determines that the funds of the association are insufficient to support the need for 
reinsurance, the superintendent may order the association to increase its assessments. If 
the superintendent determines that the funds of the association are insufficient, the 
superintendent may order the association to charge an additional assessment. 
S. 
Annual report. The association shall report annually to the joint standing 
committee of the Legislature having jurisdiction over health insurance matters by March 
15th. The report must include information on the benefits and rate structure of coverage 
offered by the association, the financial solvency of the association and the administrative 
expenses of the plan. 
6. Audit. The association must be audited at least every 3 years. A copy of the audit 
must be provided to the superintendent and to the joint standing committee of the 
Legislature having jurisdiction over health insurance matters. 
§3906. Selection of plan administrator 
1. Selection of plan administrator. The board shall select an insurer or 3rd-party 
administrator, through a competitive bidding process, to administer the plan. 
2. Contract with plan administrator. The plan administrator selected pursuant to 
subsection 1 is contracted for a period of 3 years. At least one year prior to the expiration 
of each 3-year period of service by a plan administrator, the board shall invite all insurers, 
including the current plan administrator, to submit bids to serve as the plan administrator 
for the succeeding 3-year period. 
The selection of the plan administrator for the 
succeeding period must be made at least 6 months prior to the expiration of the 3-year 
period. 
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3. Duties of plan administrator. The plan administrator selected pursuant to 
subsection 1 shall: 
A. Perform all administrative functions relating to the plan; 
B. Pay a producer's referral fee as established by the board to each producer who 
refers an applicant to the plan, if the applicant's application is accepted. The selling 
or marketing of the plan is not limited to the plan administrator or its producers. The 
plan administrator shall pay the referral fees from funds received as premiums for the 
plan; 
C. Submit regular reports to the board regarding the operation of the plan. The 
frequency, content and form of the reports must be as determined by the board; 
D. Following the close of each calendar year, determine net premiums, reinsurance 
premiums less administrative expense allowance, the expenses of administration 
pertaining to the reinsurance operations of the association and the incurred losses of 
the year and report this information to the superintendent; and 
E. Pay reinsurance amounts as provided for in the plan of operation. 
4. Payment to plan administrator. The plan administrator selected pursuant to 
subsection 1 must be paid, as provided in the contract of the association under subsection 
2, for the plan administrator's direct and indirect expenses incurred in the performance of 
the plan administrator's services. 
As used in this subsection, "direct and indirect 
expenses" includes that portion of the audited administrative costs, printing expenses, 
management expenses, building overhead expenses and other actual operating and 
administrative expenses of the plan administrator that are approved by the board as 
allocable to the administration of the plan and included in the specifications of a bid 
under subsection 2. 
§3907. Assessments against insurers 
1. Assessments. For the purpose of providing the funds necessary to carry out the 
powers and duties of the association, the board shall assess member insurers at such a 
time and for such amounts as the board finds necessary. Assessments are due not less 
than 30 days after written notice to the member insurers and accrue interest at 12% per 
annum on and after the due date. 
2. Maximum assessment. Each insurer must be assessed by the board an amount 
not to exceed $2 per covered person insured or reinsured by each insurer per month for 
medical insurance. An insurer may not be assessed on policies or contracts insuring 
federal or state employees. 
3. Determination of assessment. The board shall make reasonable efforts to ensure 
that each covered person is counted only once with respect to an assessment. For that 
purpose, the board shall require each insurer that obtains excess or stop loss insurance to 
include in its count of covered persons all individuals whose coverage is insured, in 
whole or in part, through excess or stop loss coverage. The board shall allow a reinsurer 
to exclude from its number of covered persons those who have been counted by the 
primary insurer or by the primary reinsurer or primary excess or stop loss insurer for the 
purpose of determining its assessment under this subsection. The board may verify each 
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insurer's assessment based on annual statements and other reports determined to be 
necessary by the board. The board may use any reasonable method of estimating the 
number of covered persons of an insurer if the specific number is unknown. 
4. Assessments to cover net losses. The board shall assess member insurers at such 
a time and for such amounts as the board finds necessary to cover any net loss in 
accordance with this subsection. 
A. Prior to April 1 st of each year, the association shall determine and report to the 
superintendent the association's net loss for the previous calendar year, including 
administrative expenses and incurred losses for the year, taking into account 
investment income and other appropriate gains and losses and any assessments 
transferred to the association pursuant to section 604-A and an estimate of the 
assessments needed to fund the loss incurred by the association in the previous 
calendar year. 
B. Individual assessments of each insurer are determined by multiplying net losses, if 
net earnings are negative, by a fraction, the numerator of which is the insurer's total 
premiums earned in the preceding calendar year from all health benefit plans, 
including excess or stop loss coverage, and the denominator of which is the total 
premiums earned in the preceeding calendar year from all health benefit plans. 
C. The association shall impose a penalty of interest for late payment of assessments. 
5. Deferral of assessment. An insurer may apply to the superintendent for a deferral 
of all or part of an assessment imposed by the association under this section. The 
superintendent may defer all or part of the assessment if the superintendent determines 
that the payment of the assessment would place the insurer in a financially impaired 
condition. If all or part of the assessment is deferred, the amount deferred must be 
assessed against other insurers in a proportionate manner consistent with this section. 
The insurer that receives a deferral remains liable to the association for the amount 
deferred and is prohibited from reinsuring any person through the association until such 
time as the insurer pays the assessments. 
6. Excess funds. If assessments and other receipts by the association, board or plan 
administrator exceed the actual losses and administrative expenses of the plan, the board 
shall hold the excess as interest and may use those excess funds to offset future losses or 
to reduce plan premiums. As used in this subsection, "future losses" includes reserves for 
claims incurred but not reported. 
7. Failure to pay assessment. The superintendent may suspend or revoke, after 
notice and hearing, the certificate of authority to transact insurance in this State of any 
insurer that fails to pay an assessment. As an alternative, the superintendent may levy a 
penalty on any insurer that fails to pay an assessment when due. In addition, the 
superintendent may use any power granted to the superintendent by this Title to collect 
any unpaid assessment. 
§3908. Requirements for coverage 
1. Approved coverage. 
The association shall approve a choice of 2 or more 
coverage options for which reinsurance is available through the plan. Policies approved 
by the association must be available for sale beginning on January 1, 2010. At least one 
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coverage option must be a standardized health plan as defined in Bureau of Insurance 
Rule Chapter 750. 
Any person whose medical insurance coverage is involuntarily 
terminated for any reason other than nonpayment of premiums may apply for coverage 
under the plan. If such coverage is applied for within 90 days after the involuntary 
termination and if premiums are paid for the entire period of coverage, the effective date 
of the coverage is the date of termination of the previous coverage. 
2. 
Rates. 
Rates for coverage approved by the association must meet the 
requirements of this subsection. 
A. 
Rates may not be unreasonable in relation to the benefits provided, the risk 
experience and the reasonable expenses of providing the coverage. 
B. Rate schedules must comply with section 2736-C and are subject to approval by 
the superintendent. 
C. Standard risk rates for coverage issued by the association must be established by 
the association, subject to approval by the superintendent, using reasonable actuarial 
techniques, and must reflect anticipated experiences and expenses of such coverage 
for standard risks. 
The premium for the standard risk rates must range from a 
minimum of 125% to a maximum of 150% of the weighted average of rates charged 
by those insurers and health maintenance organizations with individuals enrolled in 
similar medical insurance plans. 
3. Compliance with state law. Products approved by the association must comply 
with all relevant requirements of this Title applicable to individual health insurance 
policies, including requirements for mandated coverage for specific health services, for 
specific diseases and for certain providers of health care services. 
§3909. Reinsurance; premium rates 
1. Reinsurance amount. Any insurer offering the coverage options approved by the 
association pursuant to section 3908, subsection 1 must be reinsured by the association to 
the level of coverage provided in this subsection and is liable to the association for the 
reinsurance premium rate established in accordance with subsection 2. 
A. The association may not reimburse a reinsuring insurer with respect to claims of 
a reinsured person until the insurer has incurred an initial level of claims for that 
person of $5,000 for covered benefits in a calendar year. In addition, the reinsuring 
insurer is responsible for 10% of the next $25,000 of claims paid during a calendar 
year. The association shall reimburse reinsuring insurers for claims paid in excess of 
$25,000. The association may annually adjust the initial level of claims and the 
maximum limit to be retained by the reinsuring insurer to reflect increases in costs 
and utilization within the standard market for health plans within the State. The 
adjustments may not be less than the annual change in the medical component of the 
Consumer Price Index unless the superintendent approves a lower adjustment factor 
as requested by the association. 
B. 
A reinsuring insurer shall apply all managed care, utilization review, case 
management, preferred provider arrangements, claims processing and other methods 
of operation without regard to whether claims paid for coverage are reinsured under 
this subsection. 
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2. Premium rates. The association, as part of the plan of operation, shall establish a 
methodology for determining premium rates to be charged reinsuring insurers to reinsure 
persons eligible for coverage under this chapter. The methodology must include a system 
for classification of persons eligible for coverage that reflects the types of case 
characteristics used by insurers for individual health plans pursuant to section 2736-C. 
The methodology must provide for the development of base reinsurance premium rates, 
subject to approval of the superintendent, set at levels that reasonably approximate gross 
premiums charged for individual health plans with similar benefits to the 
coverage 
options approved by the association pursuant to section 3908, subsection 1 and that are 
adjusted to reflect retention levels required under this Title. 
The association shall 
periodically review the methodology established under this subsection and may make 
changes to the methodology as needed with the approval of the superintendent. The 
association may consider adjustments to the premium rates charged for reinsurance to 
reflect the use of effective cost containment and managed care arrangements by a 
reinsuring insurer. 
§3910. Eligibility for coverage 
1. Eligibility; application for coverage. A resident is eligible for coverage under 
the plan if evidence is provided of rejection, a requirement of restrictive riders, a rate 
increase or a preexisting conditions limitation on a qualified plan, the effect of which is to 
substantially reduce coverage from that received by a person considered a standard risk 
by at least one insurer belonging to the association within 6 months of the date of the 
certificate, or if the resident meets other eligibility requirements adopted by rule by the 
superintendent that are not inconsistent with this chapter and that indicate that a person is 
unable to obtain coverage substantially similar to that which may be obtained by a person 
who is considered a standard risk. Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
2. 
Change of domicile. 
The board shall develop standards for eligibility for 
coverage by the association for any natural person who changes that person's domicile to 
this State and who at the time domicile is established in this State is insured by an 
organization similar to the association. The eligible maximum lifetime benefits for that 
covered person may not exceed the lifetime benefits available through the association, 
less any benefits received from a similar organization in the former domiciliary state. 
3. Eligibility without application. The board shall develop a list of medical or 
health conditions for which a person is eligible for plan coverage without applying for 
health insurance under subsection 1. A person who can demonstrate the existence or 
history of a medical or health condition on the list developed by the board may not be 
required to provide the evidence specified in subsection 1. The board may amend the list 
from time to time as appropriate. 
4. Exclusions from eligibility. A person is not eligible for coverage under the plan 
A. The person has or obtains health insurance coverage substantially similar to or 
more comprehensive than a plan policy or would be eligible to have coverage if the 
person elected to obtain it, except that: 
SENATE AMENDMENT 
SENA TE AMENDMENT '...iJ" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
I 
(1) A person may maintain other coverage for the period of time the person is 
satisfying a preexisting condition waiting period under a plan policy; and 
(2) A person may maintain plan coverage for the period of time the person is 
satisfying a preexisting condition waiting period under another health insurance 
policy intended to replace the plan policy; 
B. The person is determined eligible for health care benefits under the MaineCare 
program pursuant to Title 22; 
C. The person previously terminated plan coverage, unless 6 months have elapsed 
since the person's last termination; 
D. The person is an inmate or resident of a public institution; or 
E. 
The person's premiums are paid for or reimbursed under any government-
sponsored program or by any government agency or health care provider, except as 
an otherwise qualifying full-time employee, or dependent thereof, of a government 
agency or health care provider. 
5. Termination of coverage. The coverage of any person ceases: 
A. On the date a person is no longer a resident; 
B. Upon the death of the covered person; 
C. On the date state law requires cancellation of the policy; or 
D. At the option of the association, 30 days after the association makes any inquiry 
concerning the person's eligibility or place of residence to which the person does not 
~ 
The coverage of any person who ceases to meet the eligibility requirements of this section 
may be terminated immediately. 
6. Unfair trade practice. It constitutes an unfair trade practice for any insurer, 
producer, employer or 3rd-party administrator to refer an individual employee or a 
dependent of an individual employee to the association or to arrange for an individual 
employee or a dependent of an individual employee to apply to the plan for the purpose 
of separating such an employee or dependent from a group health benefits plan provided 
in connection with the employee's employment. 
§3911. Actions against association or members based upon joint or collective 
actions 
Participation in the association, the establishment of rates, forms or procedures or any 
other joint or collective action required by this chapter may not be the basis of any legal 
action or criminal or civil liability or penalty against the association or any insurer 
belonging to the association. 
PART B 
Sec. B-l. 24-A MRSA §6913, as amended by PL 2007, c. 1, Pt. X, §§1 and 2 and 
affected by §3, is repealed. 
SENATE AMENDMENT 
SENATE AMENDMENT"~" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
Sec. B-2. 24-A MRSA §6915, as amended by PL 2005, c. 386, Pt. D, §3, is 
further amended to read: 
§6915. 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 
individuals, any savings offset payments made pursuant to former section 6913 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. B-3. 
Savings offset payments calculated prior to effective date. 
Notwithstanding that section of this Part that repeals the Maine Revised Statutes, Title 
24-A, section 6913, the savings offset payments that have been calculated and required 
under former Title 24-A, section 6913 for claims paid prior to the effective date of this 
Part are due and payable in the same manner and subject to the same procedures set forth 
in former Title 24-A, section 6913. 
Sec. B-4. Effective date. This Part takes effect July 1, 2008 or on the effective 
date of this Act, whichever occurs later. 
PART C 
Sec. C-l. 24-A MRSA §6908, sub-§2,,-o, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
B. 
Collect the savings offset payments provided in former section 6913; 
Sec. C-2. 24-A MRSA §6908, sub-§2, ~, as amended by PL 2005, c. 400, Pt. 
C, §6, is repealed. 
Sec. C-3. 24-A MRSA §6908, sub-§2, ,G, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
G. 
Establish and operate the Maine Quality Forum in accordance with the 
provisions of section 6951~; and 
Sec. C-4. 24-A MRSA §6908, sub-§2, ~ 
is enacted to read: 
H. On a quarterly basis no less than 60 days from the end of each quarter, collect and 
report on: 
(1) The total enrollment in the Dirigo Health Program, including the number of 
enrollees previously underinsured or uninsured, the number of enrollees 
previously insured, the number of individual enrollees and the number of 
enrollees enrolled through small employers; 
(2) The number of new participating employers in the Dirigo Health Program; 
(3) 
The number of employers ceasing to offer coverage through the Dirigo 
Health Program; 
(4) The duration of employers' participation in the Dirigo Health Program; and 
SENATE AMENDMENT 
SENATE AMENDMENT j .. to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
(5) A comparison of actual enrollees in the Dirigo Health Program to projected 
enrollees. 
Dirigo Health shall submit the quarterly reports required under this paragraph to the 
superintendent, to the joint standing committee of the Legislature having jurisdiction 
over appropriations and financial affairs, to the joint standing committee of the 
Legislature having jurisdiction over insurance and financial services matters and to 
the joint standing committee of the Legislature having jurisdiction over health and 
human services matters. 
Sec. C-S. 24-A MRSA §69S1, first" as enacted by PL 2003, c. 469, Pt. A, §8, 
lOis 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 
funded, at least in part, through the savings offset payments made pursuant to former 
section 6913. 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. 
PART D 
Sec. D-l. 24-A MRSA §2736, sub-§3,~, 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% for the previous 12-month period. 
For the 
purposes of this calculation, any savings offset payments paid pursuant to former 
section 6913 must be treated as incurred claims. 
Sec. D-2. 24-A MRSA §2736, sub-§4, ,C, as amended by PL 2003, c. 469, Pt. 
E, § I 0, is further amended to read: 
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 adequate, not unfairly 
discriminatory and in compliance with the requirements of former section 6913 
remains with the insurer. 
Sec. D-3. 24-A MRSA §2736-A, as amended by PL 2003, c. 469, Pt. E, §11, is 
further amended to read: 
§2736-A. Hearing 
If at any time the superintendent has reason to believe that a filing does not meet the 
requirements that rates not be excessive, inadequate, unfairly discriminatory or not in 
compliance with former section 6913 or that the filing violates any of the provisions of 
chapter 23, the superintendent shall cause a hearing to be held. 
SENATE AMENDMENT 
SENATE AMENDMENT)" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
Hearings held under this section must conform to the procedural requirements set 
forth in the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter 4. 
Sec. D-4. 24-A MRSA §2736-C, sub-§2, W, as enacted by PL 2003, c. 469, Pt. 
E, § 12, is amended to read: 
F. 
A carrier that adjusts its rate shall account for the savings offset payment or any 
recovery in that offset payment in its experience consistent with this section and 
former section 6913. 
Sec. D-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% 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. For the purposes of this 
calculation, any savings offset payments paid pursuant to former section 6913 must be 
treated as incurred claims. 
Sec. D-6. 24-A MRSA §2S0S-B, sub-§2-A, ~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, 
except that the filing of rates for small group health plans are not required to account 
for any savings offset payment or any recovery of that effset payment pursuant to 
subsection 2-B, paragraph D and former section 6913 for rates effective before July 
1,2005. 
Sec. D-7. 24-A MRSA §2S08-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. For 
the purposes of this calculation, any savings offset payments paid pursuant to fonner 
section 6913 must be treated as incurred claims. 
Sec. D-S. 24-A MRS A §2S08-B, sub-§2-B, ~, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
SENATE AMENDMENT 
SENATE AMENDMENT .J/J" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
D. A carrier that adjusts its rate shall account for the savings offset payment or any 
recovery of that savings offset payment in its experience consistent with this section 
and former section 6913. 
Sec. D-9. 24-A MRS A §2S0S-B, suh-§2-B, ~, 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 
a written statement detailing the circumstances that justifY a hearing, 
notwithstanding the satisfaction of the criteria in paragraph E. 
(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 adequate, not unfairly 
discriminatory and in compliance with the requirements of section 6913 this Title 
remains with the carrier. 
Sec. D-IO. 24-A MRSA §2S0S-B, sub-§2-C, ~C, as enacted by PL 2003, c. 
469, Pt. E, § 16, is amended to read: 
C. If incurred claims were less than 78% of aggregate earned premiums over a 
continuous 36-month period, the carrier shall refund a percentage of the premium to 
the current in-force policyholder. 
For the purposes of calculating this loss-ratio 
percentage, any savings offset payments paid pursuant to former section 6913 must 
be treated as incurred claims. The excess premium is the amount of premium above 
that amount necessary to achieve a 78% loss ratio for all of the carrier's small group 
policies during the same 36-month period. 
The refund must be distributed to 
policyholders in an amount reasonably calculated to correspond to the aggregate 
experience of all policyholders holding policies having similar benefits. The total of 
all refunds must equal the excess premiums. 
(l) For determination of loss-ratio percentages in 2005, actual aggregate incurred 
claims expenses include expenses incurred in 2005 and projected expenses for 
2006 and 2007. 
For determination of loss-ratio percentages in 2006, actual 
incurred claims expenses include expenses in 2005 and 2006 and projected 
expenses for 2007. 
(2) The superintendent may waive the requirement for refunds during the first 3 
years after the effective date of this subsection. 
Sec. D-ll. 24-A MRSA §2S39-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 
SENATE AMENDMENT 
SENATE AMENDMENT'~" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
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. The filing must 
also certifY that the carrier has included in its experience any savings offset payments or 
recovery of those savings offset payments consistent with former 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. D-12. 24-A MRSA §6908, suh-§l, ~A, as enacted by PL 2003, c. 469, Pt. 
A, §8, is amended to read: 
A. Take any legal actions necessary or proper to recover or collect savings offset 
payments due Dirigo Health or that are necessary for the proper administration of 
Dirigo Health; 
PART E 
Sec. E-l. Appropriations and allocations. The following appropriations and 
allocations are made. 
DIRIGO HEALTH 
Dirigo Health Fund 0988 
Initiative: Deallocates funds for Dirigo Health costs that were funded by the savings 
offset payment. 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
, , 
2007-08 
2008-09 
$0 
($32,900,000) 
$0 
($32,900,000) 
SUMMARY 
This amendment strikes Committee Amendment "A" and instead does the following. 
1. This amendment establishes a reinsurance pool for the individual health insurance 
market and is modeled on a similar reinsurance pool in Idaho. The amendment requires a 
maximum assessment of $2 per person covered under health insurance policies. 
2. The amendment also expands the community rating bands in the individual health 
insurance market for policies issued or renewed on or after January 1, 2010. The 
amendment prohibits a carrier from varying the premium rate due to geographic area. In 
addition, this amendment provides that the premium rate may not deviate above or below 
the community rate filed by the carrier by more than 40% on the basis of age, health 
SENATE AMENDMENT 
SENATE AMENDMENT ':P" to COMMITTEE AMENDMENT "A" to H.P. 1608, L.D. 2247 
status, occupation or industry or tobacco use. Under current law, a carrier may not vary 
the premium rate on the basis of health status. The amendment provides that a carrier 
that offered individual health plans prior to January 1, 2010 may close its individual book 
of business sold prior to January 1,2010 and may establish a separate community rate for 
individuals applying for coverage under an individual health plan after January 1,2010. 
3. 
The amendment repeals the savings offset payment used to fund subsidies for 
individuals, sole proprietors and employees of small employers enrolled in the Dirigo 
Health Program, with an effective date of July 1, 2008 or the effective date of the Act, 
whichever occurs later. 
4. 
The amendment requires that Dirigo Health submit quarterly reports on 
information regarding enrollment in the Dirigo Health Program. 
5. The amendment corrects cross-references to reflect the repeal of the savings offset 
payment. 
6. The amendment adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
SPONSOREDBY~ fl tfiu'vll-chi.e.Ef.s 
(Senator SNOWE-MELLO) 
COUNTY: Androscoggin 
SENATE AMENDMENT 
Approved: 04115108 
~aC! 
Net Cost (Savings) 
General Fund 
LD 2247 
LR 3143(09) 
An Act To Continue Maine's Leadership in Covering the Uninsured 
Fiscal Note for Senate Amendment 'f> "to Committee Amendment" A" 
Sponsor: Sen. Snowe-Mello of Androscoggin 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
$0 
2008-09 
$860,397 
Projections 
2009-10 
$889,514 
Projections 
2010-11 
$885,311 
Appropriations! Allocations 
General Fund 
$0 
$0 
($43,857) 
($61,502,356) 
$0 
$0 
Dirigo Health Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Dirigo Health Fund 
Fiscal Detail and Notes 
$0 
$0 
$0 
($904,254) 
($48,595) 
($61,502,356) 
($65,954,381) 
($67,092,790) 
($889,514) 
($48,792) 
($65,954,381 ) 
($885,311 ) 
($48,561 ) 
($67,092,790) 
The fiscal note reflects the incremental difference between the amendment and Committee Amendment "A". 
This amendment eliminates the proposed increases in the cigarette tax and other tobacco products tax, which reduces 
General Fund revenue by $904,254 in fiscal year 2008-09 and reduces revenue for the Dirigo Health Fund by 
$28,502,356 in fiscal year 2008-09. It also eliminates the General Fund appropriation of$43,857 in fiscal year 2008-
for Maine Revenue Services. 
The amendment would retain the elimination the Saving Offset Payment (SOP), one of the funding sources for the 
Dirigo Health Program, beginning with the assessment effective July 1,2008, but would not offset the lost revenue. 
For the purposes of this fiscal note, the baseline assumption for future year SOPs is the $32.8 million SOP assessed 
for the year beginning July 1,2008. 
The amendment establishes a reinsurance pool for the individual health insurance market financed with an assessment 
on member insurers with a maximum assessment of $2 per covered person. Because this assessment would be 
assessed and collected by the Association, a non-profit legal entity, there is no direct fiscal impact on State programs 
or accounts. 
LR3143(09) - Fiscal Note - Page 1 of2 
Projections 
Projections 
>irigo Health Fund Summary 
2008-09 
2009-10 
2010-11 
Revenue Changes: 
Elimination of the Savings Offset Payment 
($32,900,000) 
($32,800,000) 
($32,800,000) 
Revenue Changes 
($32,900,000) 
($32,800,000) 
($32,800,000) 
Allocation Changes: 
Other Dirigo Net Allocation Change 
($32,900,000) 
($32,800,000) 
($32,800,000) 
Allocation Changes 
($32,900,000) 
($32,800,000) 
($32,800,000) 
LR3143(09) - Fiscal Note - Page 2 of2