An Act To Establish a Health Care Bill of Rights
Maine Legislature, Session 123, LD 1294
Committee Amendment CA_B_H650 (House)
Amends: 24-A MRSA §205-A, 24-A MRSA §2735-A, 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2, 24-A MRSA §2839-A

COMMITTEE AMENDMENT :£3" to H.P. 912, L.D. 1294, Bill, "An Act To 
Establish a Health Care Bill of Rights" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 24-A MRSA §205-A is enacted to read: 
§205-A. Rate hearings 
1. Attorney General participation. If the Attorney General intervenes as a party in 
a hearing held pursuant to a rate filing for an individual health plan as defined in section 
2736-C or pursuant to section 2808-B, subsection 2-B, paragraph B for a small group 
health plan as defined in section 2808-B, the Attorney General may contract for the 
services of actuarial consultants or other consultants to assist the Attorney General with 
evaluation of a rate filing. The insurer, nonprofit hospital and medical service 
organization, nonprofit health care service organization or health maintenance 
organization making the rate filing shall pay the cost of participation of consultants to the 
Attorney General in an amount not to exceed $50,000 for any rate filing. 
2. Advocacy panel. If the Attorney General or any other party has not intervened in 
any proceeding regarding an individual or small grOUP rate filing, the bureau shall 
impanel an advocacy panel to represent the interests of consumers and the public. The 
bureau may contract for the services of an advocacy panel if existing staff resources are 
not adequate to represent the interests of consumers and the public. The insurer, nonprofit 
hospital and medical service organization, nonprofit health care service organization or 
health maintenance organization making the rate filing shall pay the cost of participation 
of the advocacy panel. 
3. Rules. The bureau may adopt rules to implement this section. Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
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COMMITTEE AMENDMENT" er to H.P. 912, L.D. 1294 
Sec. 2. 24-A MRSA §2735-A, sub-§l, as enacted by PL 2001, c. 432, §4, is 
amended to read: 
1. Notice of rate filing or rate increase on existing policies. An insurer offering 
individual health plans as defined in section 2736-C must provide written notice by first 
class mail of a rate filing to all affected policyholders at least 6G 90 days before the 
effective date of any proposed increase in premium rates or any proposed rating formula, 
classification of risks or modification of any formula or classification of risks. The notice 
must also inform policyholders of their right to request a hearing pursuant to section 229 
or a special rate hearing pursuant to section 2736, subsection 4 or Title 24, section 2321, 
subsection 5. The notice must state that the Attorney General is authorized to represent 
consumers in rate proceedings and must include information about how to contact the 
Office of the Attorney General. The notice must show the proposed rate and state that the 
rate is subject to regulatory approval. The superintendent may not take final action on a 
rate filing until 4G 70 days after the date notice is mailed by an insurer. An increase in 
premium rates may not be implemented until 6G 90 days after the notice is provided)r 
until the effective date under section 2736, whichever is later. 
Sec. 3. 24-A MRSA §2735-A, sub-§2, as enacted by PL 2001, c. 432, §4, is 
amended to read: 
2. Notice of rate increase on new business. When an insurer offering individual 
health plans as defined in section 2736-C quotes a rate for new business, it must disclose 
any rate increase that the insurer anticipates implementing within the following 9G 120 
days. If the quote is in writing, the disclosure must also be in writing. If the increase is 
pending approval at the time of notice, the disclosure must include the proposed rate and 
state that it is subject to regulatory approval. If disclosure required by this subsection is 
not provided, an increase may not be implemented until at least 9G 120 days after the date 
the quote is provided or the effective date under section 2736, whichever is later. 
Sec. 4. 24-A MRSA §2736, sub-§l, as amended by PL 2003, c. 428, Pt. F, §2, is 
further amended to read: 
1. Filing of rate information. Every insurer shall file with the superintendent for 
approval every rate, rating fonnula, classification of risks and every modification of any 
formula or classification that it proposes to use in connection with individual health 
insurance policies and certain group policies specified in section 2701. If the filing 
applies to individual health plans as defined in section 2736-C, the insurer shall 
simultaneously file '. copy with the Attorney General. Every such filing must state the 
effective date of the :iling. Every such filing must be made not less than 60 days, or 90 
days in the case of a filing that applies to individual health plans as defined in section 
2736-C, in advance of the stated effective date, unless the 60-day or 90-day requirement 
is waived by the superintendent, and the effective date may be suspended by the 
superintendent for a period of time not to exceed 30 days. In the case of a filing that 
meets the criteria in subsection 3, the superintendent may suspend the effecti'le date for a 
longer period not to exceed 30 days from the date the organization satisfactorily responds 
to any reasonable discovery requests. 
Sec. 5. 24-A MRSA §2736, sub-§2, as amended by PL 1997, c. 344, §8, is 
further amended to r. id: 
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COMMITTEE AMENDMENT·6 "to H.P. 912, L.D. 1294 
2. Filing; information. When a filing is not accompanied by the information upon 
which the insurer supports such filing, or the superintendent does not have sufficient 
information to determine whether such filing meets the requirements that rates be 
reasonable and necessary and not be exeessiye, inadequate or unfairly discriminatory, the 
superintendent shall require the insurer to furnish the information upon which it supports 
the filing. A filing and all supporting information, except for descriptions of the amount 
and terms or conditions of compensation or reimbursement in a contract between an 
insurer and a 3rd party, are public records within the meaning of notwithstanding Title 1, 
section 402, subsection 3 and become part of the official record of any hearing held 
pursuant to section 2736-A. 
Sec. 6. 24-A MRSA §2736, sub-§3, as amended by PL 2003, c. 469, Pt. E, §9, is 
repealed. 
Sec. 7. 24-A MRSA §2736, sub-§4, as amended by PL 2003, c. 469, Pt. E, §IO, 
is repealed. 
Sec. 8. 24-A MRSA §2736, sub-§5 is enacted to read: 
5. Standard for approval. The standards in this subsection apply to the making and 
use of rates pursuant to this section for individual health plans as defined in section 
2736-C. 
A. Rates are determined not to be reasonable and necessary if the rates are likely to 
produce a profit from business in this State that is unreasonably high in relation to the 
benefits provided, the surplus requirements and the surplus available, or if expenses 
are unreasonably high in relation to the benefits provided. 
B. Rates are determined not to be reasonable and necessary if the rate structure 
established by a stock insurance company provides for replenishment of surpluses 
from premiums when replenishment is attributable to investment losses. 
C. Rates are determined to be inadequate if the rates are clearly insufficient. together 
with investment income attributable to the rates, to sustain projected losses and 
expenses for the benefits provided. 
D. Rates are determined to be unfairly discriminatory if price differentials fail to 
equitably reflect the differences in expected losses and expenses. 
Sec. 9. 24-A MRSA §2736, sub-§6 is enacted to read: 
6. Factors to be considered. In determining whether the standards in subsection 5 
have been met, the factors considered by the superintendent may include but are not 
limited to: 
A. The past and prospective net underwriting gains of the insurer from the line of 
insurance for which the insurer seeks rate approval; 
B. The past, current and reasonably expected surplus levels of the carrier anticipated 
in the filing; 
C. Investment income reasonably expected by the carrier from premiums anticipated 
in the filing, plus any other expected income from currently invested assets 
representing the amount expected on unearned premium reserves and loss reserves; 
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D. The degree of competition in the market for which the rate approval is sought and 
in the overall health insurance market; and 
E. The profit and risk charge included in the previous year's rate filing and the profit 
actually achieved. 
Sec. 10. 24-A MRSA §2736-A, first ~, 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 net be excessive, reasonable and necessary and not inadequate, 
unfairly discriminatory or not in compliance with section (,' 13 or that the filing violates 
any of the provisions of chapter 23, the superintendent shal; ,ause a hearing to be held. If 
a filing proposes an increase in rates in an individual health plan as defined in section 
2736-C the superintendent shall cause a hearing to be held at the request of the Attorney 
General. In any hearing conducted under this section, the burden of proving that rates are 
reasonable and necessary, adequate, not unfairly discriminatory and in compliance with 
the requirements of section 6913 remains with the insurer. 
Sec. 11. 24-A MRSA §2S0S-B, sub-§2-A, as enac.:d by PL 2003, c. 469, Pt. E, 
§ 16, is amended to read: 
2-A. Rate filings. A carrier offering small group health plans shall file with the 
superintendent and with the Attorney General the community rates for each plan and 
every rate, rating formula and classification of risks and every modification of any 
formula or classification that it proposes to use. 
A. 
Every filing must state the effective date of the filing. Every filing must be 
made not less than 6G 90 days in advance of the stated effective date, unless the 6G-
6ay 90-day requirement is waived by the superintendent. The effective date may be 
suspended by the superintendent for a period of time not to exceed 30 days. ffi-.the 
case of a filing that meets the criteria in subsection 2 S, paragraph E, the 
sllperintendent may susPeRd the effective date for a longer period not to exceed 30 
days from the date the carrier satisfactorily responds to any reasonable disco:'lery 
requests. 
B. 
A filing and supporting information, except for descriptions of the amount and 
terms or conditions of compensation or reimbursement in a contract between an 
insurer and a 3rd part'.-. are public records except as provided by notwithstanding 
Title 1, section 402, subsection 3 and become part of the official record of any 
hearing held pursuant to subsection 2-B, paragraphs paragraph B ~. 
C. 
Rates for small group health plans must be 'lIed in accordance with this section 
and sl:1bsections subsection 2-B and 2 C for pre: !um rates effective on or after Ju:. 
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 offset payment 
pursuant to subsection 2-B, paragraph D and section 6913 for rates effective before 
July 1,2005. 
Sec. 12. 24-A MRSA §2S0S-B, sub-§2-B, as enacted by PL 2003, c. 469, Pt. E, 
§ 16, is amended to read: 
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COMMITTEE AMENDMENT "6" to H.P. 912, L.D. 1294 
2-B. Rate review and hearings. Except as provided in subsection 2-C, rate filings 
are subject to this subsection. 
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 section 
6913 must be treated as incurred claims. 
B. 
If a filing proposes an increase in rates, at the request of the Attorney General or 
at any time the superintendent has reason to believe that a filing does not meet the 
requirements that rates be reasonable and necessary and not be excessive, inadequate 
or unfairly discriminatory or that the filing violates any of the provisions of chapter 
23, the superintendent shall cause a hearing to be held. Hearings held under this 
subsection must conform to the procedural requirements set forth in Title 5, chapter 
375, subchapter 4. The superintendent shall issue an order or decision within 30 days 
after the close of the hearing or of any rehearing or reargument or within such other 
period as the superintendent for good cause may require, but not to exceed an 
additional 30 days. In the order or decision, the superintendent shall either approve 
or disapprove the rate filing. If the superintendent disapproves the rate filing, the 
superintendent shall establish the date on which the filing is no longer effective, 
specify the filing the superintendent would approve and authorize the insurer to 
submit a new filing in accordance with the terms of the order or decision. 
C. 
When a filing is not accompanied by the information upon which the carrier 
supports the filing or the superintendent does not have sufficient information to 
determine whether the filing meets the requirements that rates be reasonable and 
necessary and not be excessive, inadequate, unfairly discriminatory or not in 
compliance with section 6913, the superintendent shall require the carrier to furnish 
the information upon which it supports the filing. 
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 section 6913. 
E. 
Any filing of rates, rating formulas and modifications that satisfies the criteria 
set forth in this paragraph is subject to the provisions of paragraph F: 
(1) The proposed rate for any grmlp or subgroup does not include a unit cost 
change that exceeds the index of inflation multiplied by l.5, excluding any 
approved rate differential based on age. For the purposes of this subparagraph, 
"index of inflation" means the rate of increase in medical costs for a section of 
the United States selected by the superintendent that includes this State for the 
most recent 12 month period immediately preceding the date of the filing for 
which data are available; and 
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COMMITTEE AMENDMENT "f!:)" to H.P. 912, L.D. 1294 
(2) The carrier demonstrates 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 ratio of benefits incurred to premiums earned averages 
no less than 78% for the previous 36 month period. 
F. 
Any rate hearing conducted with respect to filings that meet the criteria in 
paragraph B is s\lbject 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 cri~ia in paragraph B. 
(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 B. 
(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 eJwessiYe. 
The burden of proYing that rates are adequate, not unfairly 
discriminatory and in compliance with the requirements of section 6913 remains 
with the carrier. 
G. This paragraph applies to the making and use of rates pursuant to this section. 
(1) Rates are determined not to be reasonable and necessary if the rates are likely 
to produce a profit from business in this State that is unreasonably high in 
relation to the benefits provided, the surplus requirements and the surplus 
available, or if ex Renses are unreasonably high in relation to the benefits 
provided. 
(2) Rates are determined not to be reasonable and necessary if the rate structure 
established by a stock insurance company provides for replenishment of 
surpluses from premiums when replenishment is attributable to investment losses. 
(3) Rates are determined to be inadequate if the rates are clearly insufficient, 
together with investment income attributable to the rates, to sustain projected 
losses and expenses for the benefits provided. 
(4) Rates are determined to be unfairly discriminatory if price differentials fail to 
equitably reflect the differences in expected losses and expenses. 
H. In determining whether the standards in subsection 6 have been met, the factors 
considered by the superintendent may include but are not limited to: 
0) The past and prospective net underwriting gains of the insurer from the line 
of insurance for which the insurer seeks rate approval; 
(2) 
The past, current and reasonably expected surplus levels of the carrier 
anticipated in the filing; 
(3) 
Investment income reasonably expected by the carrier from premiums 
anticipated in the filing, plus any other expected income from currently invested 
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COMMITTEE AMENDMENT "8,, to H.P. 912, L.D. 1294 
assets representing the amount expected on unearned premium reserves and loss 
reserves; 
(4) The degree of competition in the market for which the rate approval is sought 
and in the overall health insurance market; and 
(5) The profit and risk charge included in the previous year's rate filing and the 
profit actually achieved. 
Sec. 13. 24-A MRSA §2839-A, as amended by PL 2005, c. 121, Pt. F, §1 and c. 
400, Pt. A, §2, is further amended to read: 
§2839-A. Notice of rate increase 
1. Notice of rate increase on existing policies. An insurer offering group health 
insurance, except for small group health plans as defined by section 2808-B and 
accidental injury, specified disease, hospital indemnity, disability income, Medicare 
supplement, long-tenn care or other limited benefit group health insurance, must provide 
written notice by first class mail of a rate increase to all affected policyholders or others 
who are directly billed for group coverage at least 60 days before the effective date of any 
increase in premium rates. An increase in premium rates may not be implemented until 
days after the notice is provided. For small group health plan rates subject to section 
2808 B, subsection 2 B, if the increase is pending approval at the time of notice, the 
disclosure must state that the increase is subject to regulatory approval. 
2. Notice of rate increase on new business. When an insurer offering group health 
insurance, except for small group health plans as defined by section 2808-B and 
accidental injury, specified disease, hospital indemnity, disability income, Medicare 
supplement, long-tenn care or other limited benefit group health insurance, quotes a rate 
for new business, it must disclose any rate increase that the insurer anticipates 
implementing within the following 90 days. If the quote is in writing, the disclosure must 
also be in writing. 
If such disclosure is not provided, an increase may not be 
implemented until at least 90 days after the date the quote is provided. For small group 
health plan rates subject to section 2808 B, subsection 2 B, if the increase is pending 
approyaI at the time of notice, the disclosure must state that the increase is subject to 
regulatory approyal. 
4. 
Notice of rate increase on existing small group health plans. An insurer 
offering small group health plans as defined by section 2808-B must provide written 
notice by first class mail of a rate increase to all affected policyholders or others who are 
directly billed for group coverage at least 90 days before the effective date of any 
increase in premium rates. The notice must also infonn policyholders of their right to 
request a hearing pursuant to section 229. The notice must state that the Attorney General 
is authorized to represent small employers in rate proceedings and must include 
infonnation about how to contact the Office of the Attorney General. The notice must 
show the proposed rate and state that the rate is subject to regulatory approval. The 
superintendent may not take final action on a rate filing until 70 days after the date notice 
is mailed by an insurer. An increase in premium rates may not be implemented until 90 
days after the notice is provided or until the effective date under section 2808-B, 
subsection 2-A, whichever is later. 
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to H.P. 912, L.D. 1294 
5. Notice of rate increase on new small group business. When an insurer offering 
a small group health plan as defined by section 2808-B quotes a rate for new business, the 
insurer must disclose any rate increase that the insurer anticipates implementing within 
the following 120 days. If the quote is in writing, the disclosure must also be in writing. 
If the increase is pending approval at the time of notice, the disclosure must include the 
proposed rate and state that the rate is subject to regulatory approval. If such disclosure is 
not provided, an increase may not be implemented until at least 120 days after the date 
the quote is provided or until the effective date under section 2808-B, subsection 2-A, 
whichever is later. 
Sec. 14. Bureau of Insurance consumer publication. The Department of 
Professional and Financial Regulation, Bureau of Insurance shall develop one or more 
consumer publications relating to individual and small group health insurance products 
and rates. The bureau shaH consult with the Office of the Public Advocate to develop this 
publication or pUblications using the Office of the Public Advocate's "Ratewatcher 
Telecom Guide" publication as a model. In addition, the publicly accessible website of 
the Office of the Public Advocate must include a link to consumer education pUblications 
of the bureau.' 
SUMMARY 
This amendment is the majority report of the committee. 
1. It retains the provision of the bill that increases the time period for advance notice 
of rate increases and rate changes to policyholders from 60 to 90 days. 
2. 
It requires that individual health insurance rates be filed for approval by the 
Superintendent of Insurance. 
3. 
It authorizes the Attorney General to request that a hearing be held for an 
individual or smalI group rate filing. If a hearing is held, the Attorney General is 
authorized to contract for actuarial consultants, with the costs of the consultants up to 
$50,000 paid by the insurer. If the Attorney General or another party has not intervened, 
the amendment requires the Department of Professional and Financial Regulation, Bureau 
of Insurance to appoint an advocacy panel to represent consumers in a rate hearing, with 
the costs of the panel to be paid by the insurer. 
4. It clarifies that alI rate filings and information and documentation used to support 
the filings, except for information relating to contracts between an insurer and a 3rd party, 
are public records and may be disclosed to the pUblic. 
5. It retains the provision of the bill that changes the standard of review that rates not 
be excessive to the standard that rates be reasonable and necessary. 
6. It retains the provision of the bill that requires that rates not be approved unless 
certain standards are met and supported by evidence in the record. 
7. It requires the Bureau of Insurance to develop consumer publications using the 
Office of the Public Advocate's "Ratewatcher" publication as a model and directs that a 
link to the Bureau of Insurance be added to the office's website. 
8. It corrects cross-references to repealed law. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "8 " 
to H.P. 912, L.D. 1294 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 12110/07 
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LD 1294 
LR 1955(03) 
An Act To Establish a Health Care Bill of Rights 
Fiscal Note for Bill as Amended by Committee Amendment "(3,, 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
Minor cost increase - Other Special Revenue Funds 
Any additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation in 
implementing this bill can be absorbed by the bureau utilizing existing budgeted r"sources. Additional costs 
associated with this legislation can also be absorbed by the Department of the Attorney General and the Office of the 
Public Advocate utilizing existing budgeted resources. 
LRI955(03) - Fiscal Note - Page 1 of 1