An Act To Permit Greater Flexibility in the Design of Affordable Health Insurance
Maine Legislature, Session 123, LD 1742
Committee: Insurance and Financial Services
Sponsors: MILLS
Amends: 24-A MRSA §2736-C, 24-A MRSA §2850-B, 24-A MRSA §4202-A, 24-A MRSA §4203, 24-A MRSA §4204, 24-A MRSA §4303

Legislative Document 
No. 1742 
S.P.609 
March 27, 2007 
An Act To Permit Greater Flexibility in the Design of Affordable 
Health Insurance 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MILLS of Somerset. 
Primed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2736-C, sub-§2, ~, 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, occupation or industry and 
geographic area only under the following schedule and within the listed percentage 
bands. 
(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, 2008, the 
premium rate may not deviate above or below the community rate filed by the 
carrier by more than 40%. 
Sec. 2. 24-A MRSA §2736-C, sub-§6, ~A, as amended by PL 1995, c. 332, Pt. 
K, § 1, is further amended to read: 
A. 
Each carrier must actively market individual health plan coverage, including 
individual health plan coverage with preferred provider plan options and any 
standardized plans defined pursuant to subsection 8, to individuals in this State. 
Sec. 3. 24-A MRS A §2S0S-B, sub-§2, ~, as amended by PL 2001, c. 410, Pt. 
A, §4 and affected by § 1 0, is further amended to read: 
D. 
A carrier may vary the premium rate due to age, occupation or industry and 
geographic area only under the following schedule and within the listed percentage 
bands. 
(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between July 15, 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%, exeept as pro1,rided in paragrapR D 1. 
(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State after January I, 2008, the 
premium rate may not deviate above or below the community rate filed by the 
carrier by more than 40%. 
Sec. 4. 24-A MRS A §2808-B, sub-§2, ~-1, as amended by PL 2001, c. 410, 
Pt. A, § 5 and affected by § 10, is repealed. 
Sec. 5. 24-A MRSA §2850-B, sub-§3, ,G, as amended by PL 2003, c. 428, Pt. 
A, § 1, is further amended to read: 
G. 
When the carrier ceases offering a product and meets the following 
requirements: 
(1) In the large group market: 
(a) The carrier must provide notice to the policyholder and to the insureds at 
least 90 days before termination; 
(b) The carrier must offer to each policyholder the option to purchase any 
other product currently being offered in the large group market; and 
(c) In exercising the option to discontinue the product and in offering the 
option of coverage under division (b), the carrier must act uniformly without 
regard to the claims experience of the policyholders or the health status of the 
insureds or prospective insureds; 
(2) In the small group market: 
(a) The carrier shall replace the product with a product that complies with 
the requirements of this section, including renewability, and with section 
2808-B; 
(b) The StlfIerinteBdest shall find tRat tRe replaeement is iR tRe eest interests 
oftRe polioYRolders; and 
(c) The carrier shall provide notice to the policyholder and to the insureds at 
least 90 days before replacement; er and 
(d) In exercising the option to replace the product, the carrier must act 
uniformly with regard to the insureds or prospective insureds of the same 
product; or 
(3) In the individual market: 
(a) The carrier shall replace the product with a product that complies with 
the requirements of this section, including renewability, and with section 
2736-C; 
(b) The s~eriBteaeeBt shall fiae that the replaeemeat is ia the best iaterests 
of the polieyholeers; aae 
(c) The carrier shall provide notice to the policyholder and, if a group 
policy, to the insureds at least 90 days before replacement; and 
(d) In exercising the option to replace the product, the carrier must act 
uniformly with regard to the insureds or prospective insureds of the same 
product; 
Sec. 6. 24-A MRSA §4202-A, sub-§l, as amended by PL 2001, c. 218, §1, is 
further amended to read: 
1. Basic health care services. "Basic health care services" means health care 
services that an enrolled population might reasonably require in order to be maintained in 
good health and includes, at a minimum, emergency care, inpatient hospital care, 
inpatient physician services, outpatient physician services, ancillary services such as x-
ray services and laboratory services and all benefits mandated by statute and mandated by 
rule applicable to health maintenance organizations. The superintendent may adopt rules 
defining "basic health care services" to be provided by health maintenance organizations. 
In adopting such rules, the superintendent shall consider the coverages that have 
traditionally been provided by health maintenance organizations; the current conditions of 
the marketplace; the need for flexibility in the marketplace; and the importance of 
providing multiple options to employers and consumers. The superintendent may not 
require that all health benefit plans offered by health maintenance organizations meet or 
exceed each of the particular requirements of standard or basic health plans specified in 
Bureau of Insurance Rule, Chapter 750. The superintendent may select required services 
from among those set forth in Bureau of Insurance Rule, Chapter 750 and shall permit 
reasonable, but not excessive or unfairly discriminatory, variations in the copayment, 
coinsurance, deductible and other features of such coverage, except that these features 
must meet or exceed those required in benefits mandated by statute. At least once every 
years, the bureau shall review the rules adopted pursuant to this subsection and amend 
the rules to reflect the current conditions in the marketplace. Rules adopted pursuant to 
this subsection are major substantive rules as defined in Title 5, chapter 375, subchapter 
II-A 2-A. 
Sec. 7. 24-A MRSA §4203, sub-§3, ~S, as amended by PL 2003, c. 469, Pt. E, 
§ 18, is further amended to read: 
S. 
A list of the names and addresses of all physicians and facilities with which the 
health maintenance organization has or will have agreements. If products are offered 
that pay full benefits only when providers within a subset of the contracted physicians 
or facilities are utilized, a list of the providers in that limited network must be 
included, as well as a list of the geographic areas where the products are offered. 
Tms paragraph may aot be eoastrnee to prohibit a health maiBteaaaee orgaaizatioa 
from offeriag a health plaa that iaehiees fiaaaeial provisioas eesigaee to eaeOl:ffilge 
members to l;lse eesigaatee provieers ia a aetv;erk ia aeeoreaaee with seetioa 4303, 
s1:lbseetioa 1, paragraph A. 
Sec. 8. 24-A MRSA §4204, sub-§2-A, ~, as repealed and replaced by PL 1995, 
c. 673, Pt. D, §3, is repealed. 
Sec. 9. 24-A MRSA §4303, sub-§l, as amended by PL 2003, c. 469, Pt. E, §20 
and c. 689, Pt. B, §6, is repealed. 
Sec. 10. Bureau of Insurance rule making. By January 1, 2008, the Bureau of 
Insurance shall provisionally adopt amendments to Bureau of Insurance Rule, Chapter 
to reflect current market conditions in accordance with the Maine Revised Statutes, 
Title 24-A, section 4202-A, subsection 1. The bureau shall present the provisionally 
adopted rule to the Legislature for review pursuant to Title 5, chapter 375, subchapter 2-A 
during the Second Regular Session of the 123rd Legislature. 
SUMMARY 
This bill makes the following changes to the laws governing health insurance. 
1. It expands the community rating bands from 20% to 40% for premium rates filed 
with the Superintendent of Insurance on or after January 1,2008. 
2. It requires that the Bureau of Insurance revise Bureau of Insurance Rule, Chapter 
defining minimum standards for mandated health plan offerings to reflect current 
market conditions and requires that the bureau review the rule and adopt changes to 
reflect market conditions at least once every 3 years. 
3. It requires carriers that offer individual health plans to offer individual health 
plans utilizing preferred provider arrangements. 
4. It changes the standard of review of benefit changes in individual health plans to 
be consistent with the standard of review. for group health plans. 
5. It repeals the requirement that all health plans meet certain access standards.