An Act To Allow Maine Consumers To Purchase Health Insurance from Out-of-State Insurers
Maine Legislature, Session 123, LD 1517
Committee: Insurance and Financial Services
Sponsors: SMITH, McKANE, SAVAGE, VAUGHAN, PLOWMAN, SCHNEIDER, SNOWE-MELLO, WESTON, AYOTTE, CROCKETT, MOORE, RICHARDSON
Amends: 24-A MRSA §40, 2 MRSA §103, 22 MRSA §1708, 22 MRSA §171, 22 MRSA §2061, 24-A MRSA §4204, 24-A MRSA §6203, 24-A MRSA §6951, 24-A MRSA §69, 38 MRSA §13

Legislative Document 
No. 1517 
S.P.540 
March 20, 2007 
An Act To Allow Maine Consumers To Purchase Health Insurance 
from Out-of-State Insurers 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator SMITH of Piscataquis. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Representatives: McKANE of Newcastle, SAVAGE of Falmouth, 
Representative VAUGHAN of Durham and Senators: PLOWMAN of Penobscot, 
SCHNEIDER of Penobscot, SNOWE-MELLO of Androscoggin, WESTON of Waldo, 
Representatives: AYOTTE of Caswell, CROCKETT of Augusta, MOORE of Standish, 
RICHARDSON of Warren. 
Prmteu no ret.:yded paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §40S, sub-§7 is enacted to read: 
7. 
Transactions pursuant to individual health insurance covering residents of this 
State written by a regional insurer or health maintenance organization duly authorized or 
qualified to transact such insurance in the state or country of its domicile if the 
superintendent certifies that the regional insurer or health maintenance organization meets 
the requirements of section 405-A. 
Sec. A-2. 24-A MRSA §40S-A is enacted to read: 
§405-A. Certification of regional insurers or health maintenance organizations to 
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transact individual and group health insurance 
To qualify under this section and section 405, subsection 7, a regional insurer or 
health maintenance organization, as described in this section, may not transact individual 
or group health insurance in this State by mail, the Internet or otherwise unless the 
superintendent has issued a certification that the requirements of this section have been 
met. The superintendent shall issue a certification or deny certification within 30 days of 
a request. A regional insurer or health maintenance organization shall meet the following 
requirements. 
1. Regional insurer; authority to transact individual or group health insurance 
in certain states. 
As used in this section, "regional insurer or health maintenance 
organization" means an insurer or health maintenance organization that holds a valid 
certificate of authority to transact individual or group health insurance in one of the 
following states or jurisdictions: Connecticut, Massachusetts, New Hampshire, Rhode 
Island, Vermont, Delaware, Maryland, New Jersey, New York, Pennsylvania or the 
District of Columbia. 
2. Compliance with laws of state. Any policy, contract or certificate of individual 
or group health insurance offered for sale in this State by a regional insurer or health 
maintenance organization must comply with the applicable individual and group health 
insurance laws in the state of its domicile and the policy must be actively marketed in that 
state. 
3. 
Minimum surplus and reserve levels. 
The regional insurer or health 
maintenance organization shall maintain minimum caoital and surplus requirements and 
maintain reserves as required by section 410; sections 90 I to 984; section 4204, 
subsection 2-A, paragraph D; and section 4204-A as applicable. 
4. 
Disclosure and reporting. 
The regional insurer or health maintenance 
organization shall meet the requirements of section 4302 for reporting plan information 
with respect to individual health plans offered for sale in this State and disclose to 
prospective enrollees how the health plans differ from individual and group health plans 
offered by domestic insurers in a format approved by the superintendent within 90 days 
Page I - 123LRI483(OI)-1 
of the effective date of this section. Health plan policies and applications for coverage 
must contain the following disclosure statement or a substantially similar statement: 
"This policy is issued by a regional insurer or health maintenance organization and is 
governed by the laws and regulations of [state of regional insurer or health maintenance 
organization's state of domicile]. This policy may not be subject to all the insurance laws 
and rules of the State of Maine, including coverage of certain health care services or 
benefits mandated by Maine law. Before purchasing this policy, you should carefully 
review the terms and conditions of coverage under this policy, including any exclusions 
or limitations of coverage." 
5. Grievance procedures. The regional insurer or health maintenance organization 
shall meet the requirements of section 4303, subsection 4 for grievance procedures with 
respect to health plans offered for sale in this State. 
6. 
Unfair trade practices. The provisions of chapter 23 apply to the regional 
insurer or health maintenance organization permited to transact health insurance under 
this section or section 405. 
7. Taxes; assessments. The regional insurer or health maintenance organization is 
subject to applicable taxes or assessments imposed on insurers transacting individual and 
group health insurance in this State pursuant to this Title and Title 36. 
8. Service of process. The regional insurer or health maintenance organization shall 
designate an agent for receiving service of legal documents and process in the manner 
provided in this Title. 
9. 
Compliance with court orders. The regional insurer or health maintenance 
organization shall comply with lawful orders from courts of competent jurisdiction issued 
on a voluntary dissolution proceeding or in response to a petition for an injunction by the 
superintendent asserting that the regional insurer or health maintenance organization is in 
a hazardous financial condition. 
10. 
Participation in guaranty association. 
The regional insurer or health 
maintenance organization shall participate in an insurance insolvency guaranty 
association to which a domestic insurer or health maintenance organization that transacts 
individual and group health insurance is required to belong in accordance with this Title. 
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Except as expressly provided in this section, the requirements of this Title do not 
apply to a regional insurer or health maintenance organization permitted to transact health 
insurance under this section or section 405. 
Sec. A-3. 24-A MRSA §40S-B is enacted to read: 
§405-B. 
Domestic insurers; individual and group health insurance approved in 
other states 
Notwithstanding any other provision of this Title except as expressly provided, a 
domestic insurer or health maintenance organization may offer for sale in this State an 
individual or group health plan duly authorized for sale in another state by a parent or 
subsidiary of the domestic insurer if the following requirements are met. 
1. Certificate of authority from state of domicile. The parent or subsidiary of the 
domestic insurer or health maintenance organization must hold a valid certificate of 
authority to transact individual health insurance in one the following states or 
jurisdictions: 
Connecticut, Massachusetts, New Hampshire, Rhode Island, Vermont, 
Delaware, Maryland, New Jersey, New York, Pennsylvania or the District of Columbia. 
2. Compliance with laws of state of domicile. Any policy, contract or certificate of 
individual or group health insurance offered for sale in this State by a domestic insurer or 
health maintenance organization must comply with the applicable individual and group 
health insurance laws in the state of domicile of the parent or subsidiary and the policy 
must be actively marketed in that state. 
3. 
Disclosure and reporting. The domestic insurer or health maintenance 
organization shall meet the requirements of section 4302 for reporting plan information 
with respect to individual and group health plans offered for sale in this State and disclose 
to prospective enrollees how the individual and group health plans of the parent or 
subsidiary differ from individual and group health plans offered by domestic insurers in a 
format approved by the superintendent within 90 days of the effective date of this section. 
Health plan policies and applications for coverage must contain the following disclosure 
statement or a substantially similar statement: "This policy is issued by a domestic insurer 
or health maintenance organization but is governed by the laws and rules of [state of 
domicile of parent or subsidiary of domestic insurer], which is the state of domicile of the 
parent or subsidiary of the domestic insurer or health maintenance organization. This 
policy may not be subject to all the insurance laws and rules of the State of Maine, 
including coverage of certain health care services or benefits mandated bv Maine law. 
Before purchasing this policy, you should carefully review the terms and conditions of 
coverage under this policy, including any exclusions or limitations of coverage." 
4. Grievance procedures. The domestic insurer or health maintenance organization 
shall meet the requirements of section 4303, subsection 4 for grievance procedures with 
respect to health plans offered for sale in this State. 
PART B 
Sec. B-1. 2 MRSA §lOl, sub-§l, e;rB, as enacted by PL 2003, c. 469, Pt. B, § 1, is 
1 
amended to read: 
B. 
Make an annual report to the public assessing the progress toward meeting goals 
of the plan and provide any needed updates to the plan; and 
Sec. B-2. 2 MRS A §lOl, sub-§l, ~C, as enacted by PL 2003, c. 469, Pt. B, § 1, is 
amended to read: 
C. 
Issue an annual statewide health expenditure budget report that must serve as the 
basis for establishing priorities within the plan-;--aOO" 
Sec. B-3. 2 MRS A §lOl, sub-§l, ~, as amended by PL 2005, c. 369, § 1, is 
repealed. 
Sec. B-4. 2 MRSA §l02, as amended by PL 2005, c. 227, § 1, is repealed. 
Sec. B-S. 2 MRSA §l03, sub-§3,,n, as enacted by PL 2003, c. 469, Pt. B, §I, is 
repealed. 
Sec. B-6. 2 MRSA §l03, sub-§3, ~, as amended by PL 2005, c. 369, §4, is 
further amended to read: 
E. 
Outline strategies to: 
(I) Promote health systems change; 
(2) Address the factors influencing health care cost increases; and 
(3) Address the major threats to public health and safety in the State, including, 
but not limited to, lung disease, diabetes, cancer and heart disease; and 
Sec. B-7. 2 MRSA §l03, sub-§3, ~, as amended by PL 2005, c. 369, §4, is 
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further amended to read: 
F. 
Provide recommendations to help purchasers and providers make decisions that 
improve public health and build an affordable, high-quality health care system~'1fIti" 
Sec. B-8. 2 MRSA §103, sub-§3, ~G, as enacted by PL 2005, c. 369, §5, is 
repealed. 
Sec. B-9. 2 MRSA §l03, sub-§4, as enacted by PL 2003, c. 469, Pt. B, §I, is 
repealed. 
Sec. B-IO. 22 MRSA c. l03-A, as amended, is repealed. 
Sec. B-l1. 22 MRSA §1708, sub-§3, ~D, as corrected by RR 2001, c. 2, Pt. A, 
§33, is amended to read: 
D. 
Ensure that any calculation of an occupancy percentage or other basis for 
adjusting the rate of reimbursement for nursing facility services to reduce the amount 
paid in response to a decrease in the number of residents in the facility or the 
percentage of the facility's occupied beds excludes all beds that the facility has 
removed from service for all or part of the relevant fiscal period in accordance '""ith 
section 333. If the excluded beds are converted to residential care beds or another 
program for which the department provides reimbursement, nothing in this paragraph 
precludes the department from including those beds for purposes of any occupancy 
standard applicable to the residential care or other program pursuant to duly adopted 
rules of the department; and 
Sec. B-12. 22 MRSA §171S, sub-§I, ~A, as corrected by RR 2001, c. 2, Pt. A, 
§34, is amended to read: 
A. 
Is either a direct provider of major ambulatory service, as defined in section 382, 
subsection 8-A, or is or has been required to obtain a certificate of need under former 
section 329 or former section 304 or 304-A; 
Sec. B-13. 22 MRSA §2061, sub-§2, as corrected by RR 2003, c. 2, §71, IS 
repealed. 
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Sec. B-14. 24-A MRSA §4204, sub-§I, ~A, as amended by PL 2003, c. 510, Pt. 
A, §20, is repealed. 
Sec. B-15. 24-A MRSA §4204, sub-§2-A, ~A, as amended by PL 2003, c. 510, 
Pt. A, §21 and c. 689, Pt. B, §7, is repealed. 
Sec. B-16. 24-A MRSA §6203, sub-§I, ~A, as amended by PL 2003, c. 510, Pt. 
A, §22, is repealed. 
Sec. B-17. 24-A MRSA §6203, sub-§6, as amended by PL 2003, c. 155, §I, is 
further amended to read: 
6. Provision of services to nonresidents. The final certificate of authority must 
state whether any skilled nursing facility that is part of a life-care community or a 
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continuing care retirement community may provide services to persons who have not 
been bona fide residents of the community prior to admission to the skilled nursing 
facility. If the life-care community or the continuing care retirement community admits 
to its skilled nursing facility only persons who have been bona fide residents of the 
community prior to admission to the skilled nursing facility, then the community ts 
exempt from the provisions of Title 22, chapter 103 A, but is subject to the licensing 
provisions of Title 22, chapter 405, and is entitled to only one skilled nursing facility bed 
for every 4 residential units in the community. Any community exempted under former 
Title 22, chapter 103-A may admit nonresidents of the community to its skilled nursing 
facility only during the first 3 years of operation. For purposes of this subsection, a "bona 
fide resident" means a person who has been a resident of the community for a period of 
not less than 180 consecutive days immediately preceding admission to the nursing 
facility or has been a resident of the community for less than 180 consecutive days but 
who has been medically admitted to the nursing facility resulting from an illness or 
accident that occurred subsequent to residence in the community. 
Any community 
exempted under Title 22, former chapter 103-A is not entitled to and may not seek any 
reimbursement or financial assistance under the MaineCare program from any state or 
federal agency and, as a consequence, that community must continue to provide nursing 
facility services to any person who has been admitted to the facility. 
Notwithstanding this subsection, a life-care community that holds a final certificate of 
authority from the superintendent and that was operational on November 18, 2002 and 
that is barred from seeking reimbursement or financial assistance under the MaineCare 
program from a state or federal agency may continue to admit nonresidents of the 
community to its skilled nursing facility after its first 3 years of operation with the 
approval of the superintendent. A life-care community that admits nonresidents to its 
skilled nursing facility as permitted under this subsection may continue to admit 
nonresidents after its first 3 years of operation only for such period as approved by the 
superintendent after the superintendent's consideration of the financial impact on the life-
care community and the impact on the contractual rights of subscribers of the community. 
Sec. B-18. 24-A MRSA §6951, sub-§6, as enacted by PL 2003, c. 469, Pt. A, §8, 
is amended to read: 
6. Technology assessment. The forum shall conduct technology assessment reviews 
to guide the use and distribution of new technologies in this State. The forum shall make 
recommendations to the certificate of need program Hnder Title 22, chapter 103 A. 
Sec. 8-19. 24-A MRSA §69S1, sub-§8, as enacted by PL 2003, c. 469, Pt. A, §8, 
is repealed. 
Sec. 8-20. 24-A MRSA §69S2, sub-§7, ~, as enacted by PL 2003, c. 469, Pt. 
A, §8, is amended to read: 
D. 
Make recommendations regarding quality assurance and quality improvement 
priorities for inclusion in the State Health Plan described in Title 2, chapter 5; and 
Sec. 8-21. 38 MRSA §13lO-X, sub-§4, 'JA, as amended by PL 2003, c. 551, 
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§ 17, is further amended to read: 
A. 
A commercial biomedical waste disposal or treatment facility, if at least 51 % of 
the facility is owned by a licensed hospital or hospitals as defined in Title 22, section 
328, subsection 14 or a group of hospitals that arc licensed under Title 22 acting 
through a statewide association of Maine hospitals or a wholly owned affiliate of the 
association; and 
PART C 
Sec. C-1. Effective date. This Act takes effect January 1, 2008. 
SUMMARY 
This bill permits out-of-state health insurers, which are referred to as regional 
insurers in the bill, to offer their individual or group health plans for sale in this State if 
certain requirements of Maine law are met, including minimum capital and surplus and 
reserve, disclosure and reporting and grievance procedures. The bill defines the out-of-
state health insurers as those insurers authorized to transact individual or group health 
insurance in one of the following states or jurisdictions: Connecticut, Massachusetts, 
New Hampshire, Rhode Island, Vermont, Delaware, Maryland, New Jersey, New York, 
Pennsylvania or the District of Columbia. It also permits Maine health insurers to offer 
individual health plans of out-of-state parent or subsidiary health insurers if similar 
requirements are met. If out-of-state health plans are offered for sale in this State, the bill 
requires that prospective enrollees be provided adequate disclosure of how the plans 
differ from Maine health plans in a format approved by the Superintendent of Insurance. 
The bill repeals the statutory provisions governing the Capital Investment Fund and 
certificate of need. 
The bill takes effect January I, 2008.