An Act To Continue Maine's Leadership in Covering the Uninsured
Maine Legislature, Session 123, LD 2247
Committee Amendment CA_B_H915 (House)
Amends: 24-A MRSA §606, 24-A MRSA §2736-C, 24-A MRSA §6912, 24-A MRSA §6913, 24-A MRSA §6913-A, 24-A MRSA §691

COMMITTEE AMENDMENT" g" to-H:t>. 1608, L.D. 2247, Bill, "An Act To 
Continue Maine's Leadership in Covering the Uninsured" 
Amend the bill by striking out all of Parts A to C and inserting the following: 
'PART A 
Sec. A-I. 24-A MRS A §2736-C, sub-§10 is enacted to read: 
10. Pilot projects; persons under 30 years of age. 
The superintendent shall 
authorize pilot projects in accordance with this subsection that allow a health insurance 
carrier that offers individual insurance, is marketing an individual insurance policy in this 
State and has a medical-loss ratio of at least 70% in the individual market to offer 
individual medical insurance products to persons under 30 years of age beginning July 1, 
2009. 
A. 
The superintendent shaH review pilot project proposals submitted in accordance 
with rules adopted pursuant to paragraph E. The superintendent shall approve a pilot 
project proposal if it meets the minimum benefit requirements set forth in rules 
adopted pursuant to paragraph E and may not approve a proposal that does not 
provide such minimum benefit requirements. 
B. 
Notwithstanding any requirements in this Title for specific health services, 
specific diseases and certain providers of health care services, the superintendent may 
adopt minimum benefit requirements that exclude certain benefits if determined by 
the superintendent to provide affordable and attractive individual health plans for 
persons under 30 years of age. 
C. 
A pilot project approved by the superintendent pursuant to this subsection 
qualifies as creditable coverage under this Title. Notwithstanding section 2849-B, 
subsection 4, a policy that replaces coverage issued under a pilot project approved 
under this subsection is not subject to any preexisting conditions exclusion 
provisions. Each carrier that offers an individual product pursuant to a pilot project 
approved under this subsection must combine the experience for that product with 
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other individual products offered by that carrier as filed with the bureau when 
determining premium rates. The experience of a carrier's closed pool may not be 
taken into account in determining pilot project premium rates. 
D. 
Beginning in 2010, the superintendent shall report by March 1 st annually to the 
joint standing committee of the Legislature having jurisdiction over insurance matters 
on the status of any pilot project approved by the superintendent pursuant to this 
subsection. The report must include an analysis of the effectiveness of the pilot 
project in encouraging persons under 30 years of age to purchase insurance and an 
analysis of the impact of the pilot project on the broader insurance market, including 
any impact on premiums and availability of coverage. 
E. 
The superintendent shall establish by rule procedures and policies that facilitate 
the implementation of a pilot project pursuant to this subsection, including, but not 
limited to, a process for submitting a pilot project proposal, minimum requirements 
for approval of a pilot project and any requirements for minimum benefits. Rules 
adopted pursuant to this paragraph are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A and must be adopted no later than 90 days after the 
effective date of this subsection. 
PARTB 
Sec. B-1. 5 MRS A §12004-G, sub-§14-F is enacted to read: 
14-F. 
Health Care 
Board of Directors 
of the Maine 
Reinsurance Pool 
Association 
Expenses Only 
Sec. B-2. 24-A MRS A §423-E is enacted to read: 
§423-E. Report to Legislature 
24-A §3903 
The superintendent shall report each year by March 1 st to the joint standing 
committee of the Legislature having jurisdiction over insurance matters on the impact of 
any changes to the rating provisions in section 2736-C, the status of the Maine Individual 
Reinsurance Pool Association established pursuant to chapter 54 and the impact on rates 
related to reimbursements paid by the Maine Individual Reinsurance Pool Association, 
the total number of individuals enrolled in any health insurance product regulated by the 
bureau and the number of previously uninsured or underinsured individuals who have 
enrolled during that year in any health insurance product regulated by the bureau, which 
information is collected pursuant to rules adopted under this section. Along with the 
annual report, the superintendant may submit any proposed legislation for consideration 
by the joint standing committee. 
Sec. B-3. 24-A MRSA §606 is enacted to read: 
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§606. Premium assessment; health maintenance organizations 
1. Assessment. A health maintenance organization authorized to do business in this 
State pursuant to chapter 56 shall pay an assessment of 2% per year on all gross direct 
premiums on all policies, contracts and certificates written on residents in this State. The 
assessment imposed by this subsection applies to all gross direct premiums collected or 
contracted for on health maintenance organization policies, contracts and certificates 
issued or renewed on or after July 1, 2008. Beginning in 2009, each health maintenance 
organization shall file an annual report on or before August 1 st of each year with the 
superintendent containing a sworn statement of the gross direct premiums and shall pay 
to the superintendent an amount equal to 2% of those gross premiums. 
2. Dedicated account. The assessments paid pursuant to subsection 1 must be 
deposited in a special dedicated, nonlapsing revenue account administered by the 
superintendent. 
3. Transfer to reinsurance pool association. Beginning October 1, 2009 and 
annually thereafter, the superintendent shall transfer assessments paid by health 
maintenance organizations pursuant to subsection 1 from the account established in 
subsection 2 to the Maine Individual Reinsurance Pool Association established in chapter 
54. 
Sec. B-4. 24-A MRSA §2736-C, sub-§2,~, as amended by PL 2001, c. 410, 
Pt. A, §2 and affected by § 1 0, is further amended to read: 
D. A carrier may vary the premium rate due to age, occupation or industl)' and 
geographic area only under tfle follo'tving SCHedule and witflin the listed percentage 
bands in accordance with the limitations set out in this paragraph. 
(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 afteJ: between July 15, 1995 and 
June 30, 2009, 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 on or after July 1, 2009, for each 
health benefit plan offered by a carrier, the premium rate may not deviate above 
or below the community rate filed by the carrier by more than 40%. 
(a) In determining rating factors for age and geographic area pursuant to this 
subparagraph, no resulting rates, taking into account the savings resulting 
from the reinsurance program created by chapter 54, may exceed the rates 
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that would have resulted from using projected claims and expenses and the 
rating factors applicable prior to July 1, 2009, as determined without taking 
into account the savings resulting from the Maine Individual Reinsurance 
Pool Association established in chapter 54. 
(b) 
The superintendent shall adopt rules setting forth appropriate 
methodologies regarding determination of rating factors pursuant to this 
subparagraph. Rules adopted pursuant to this division are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. B-5. 24-A MRSA §2736-C, sub-§2, ~G is enacted to read: 
G. A carrier that adjusts its rate shall account in its experience for the effect of the 
annual reimbursements paid to the carrier by the Maine Individual Reinsurance Pool 
Association established in chapter 54. 
Sec. B-6. 24-A MRSA §2736-C, sub-§2, ~ 
is enacted to read: -
H. A carrier that offered individual health plans prior to July 1, 2009 may close its 
individual book of business sold prior to July 1, 2009 and may establish a separate 
community rate for individuals applying for coverage under an individual health plan 
on or after July 1, 2009. A carrier must merge the closed book with its open book by 
the earlier of: 
0) July 1, 2012; and 
(2) When the number of subscribers remaining in a carrier's closed individual 
book of business is less than 25% of the carrier's individual health plan subscriber 
total as of June 30, 2009. In order to administer this subparagraph, a carrier shall 
compare the number of current individual health plan subscribers in its closed 
book of business to its individual health plan subscriber total as of June 30, 2009 
on an annual basis. 
The superintendent shall establish by rule procedures and policies that facilitate the 
implementation of this paragraph, including, but not limited to, notice requirements 
for policyholders and experience pooling requirements of individual health products. 
When 
establishing 
rules 
regarding 
experience 
pooling 
requirements, 
the 
superintendent shall ensure, to the greatest extent possible, the availability of 
affordable options for individuals transitioning from the closed book of business. 
Rules adopted pursuant to this paragraph are routine technical rules as defined in 
Title 5, chapter 375. subchapter 2-A. 
Sec. B-7. 24-A MRSA §2736-C, sub-§2-A is enacted to read: 
2-A. Reinsurance requirement. Carriers providing individual health plans are 
subject to the requirements of chapter 54. 
Sec. B-8. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
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MAINE INDIVIDUAL REINSURANCE POOL ASSOCIATION 
§3901. Short title 
This chapter may be known and cited as "the Maine Individual 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 Reinsurance Pool 
Association established in section 3903. 
2. Board. "Board" means the board of directors of the association. 
3. Health maintenance organization. "Health maintenance organization" means an 
organization authorized under chapter 56 to operate a health maintenance organization in 
this State. 
4. 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, a nonprofit hospital and medical service organization, a fraternal benefit 
society, a health maintenance organization, a 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, a 3rd-party administrator, a mUltiple-employer 
welfare arrangement, any other entity providing medical insurance or health benefits 
subject to state insurance regulation, any reinsurer reissuing 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. 
5. Medical insurance. "Medical insurance" means a hospital and medical expense-
incurred policy, a nonprofit hospital and medical service plan, a 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, 
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. 
6. 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. 
7. Producer. "Producer" means a person who is licensed to sell health insurance in 
this State. 
8. 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 
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part of the medical insurance risk of the person. "Reinsurer" includes an insurer that 
provides employee benefits excess insurance. 
9. Third-party administrator. "Third-party administrator" means an entity that is 
paying or processing medical insurance claims for a resident. 
§3903. Maine Individnal Reinsurance Pool Association 
1. 
Reinsurance pool established. 
The Maine Individual Reinsurance Pool 
Association is established as a nonprofit legal entity to provide reinsurance for individual 
health plans in accordance with this chapter. 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 III 
accordance with this subsection. 
A. The board consists of 11 members appointed pursuant to this paragraph: 
C 1) Six members appointed by the superintendent, of whom: 
Ca) Two members must be chosen from the general public and may not be 
associated with the medical profession, a hospital or an insurer; 
Cb) Two members must represent medical providers; 
(c) One member must represent health insurance producers; and 
Cd) One member must represent a statewide association representing small 
businesses that receives the maiority 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 and at least one of whom is a 3rd-party 
administrator. 
B. Members serve terms of 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 
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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 
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 ai, and legal representation for, its members and employees. 
§3905. Duties and powers of the association 
1. Duties. The association shall: 
A. 
Establish administrative and accounting procedures for the operation of the 
association; 
B. Select an administrator in accordance with section 3906; 
C. 
Establish procedures for the handling and accounting of funds held by the 
association, including transfers pursuant to section 606, subsection 3, assessments as 
provided in section 3907 and premiums as provided in section 3909, subsection 2; 
and 
D. Collect assessments as provided in section 3907. 
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; 
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E. Appoint appropriate legal, actuarial and other committees as necessary to provide 
technical assistance to the association; 
F. 
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; 
G. 
Establish rules, conditions and procedures for reinsuring risks of insurers in 
accordance with section 3909; and 
H. 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. 
3. 
Additional duties and powers. The superintendent may, by rule, establish 
additional powers and duties of the association 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. 
5. 
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 association. 
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 administrator 
1. 
Selection of administrator. The board shall select an insurer or 3rd-party 
administrator, through a competitive bidding process, to administer the association. 
2. Contract with administrator. The administrator selected pursuant to subsection 
I is contracted for a period of 3 years. At least one year prior to the expiration of each 3-
year period of service by an administrator, the board shall invite all insurers, including the 
current administrator, to submit bids to serve as the administrator for the succeeding 3-
year period. The selection of the administrator for the succeeding period must be made at 
least 6 months prior to the expiration of the 3-year period. 
3. Duties of administrator. The administrator selected pursuant to subsection 
shall: 
A. Perform all administrative functions relating to the association; 
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B. Submit regular reports to the board regarding the operation of the association. The 
frequency, content and form of the reports must be as determined by the board; 
C. 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 
D. 
Pay reinsurance and reimbursement amounts as provided for in the plan of 
operation and sections 3909 and 3911. 
4. Payment to administrator. The administrator selected pursuant to subsection 1 
must be paid, as provided in the contract of the association under subsection 2, for the 
administrator's direct and indirect expenses incurred in the performance of the 
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 administrator that- are approved by the board as allocable to the 
administration of the association and included in the specifications of a bid under 
subsection 2. 
§3907. Assessments against insurers 
1. Assessment. 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 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 606 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. 
2. Organizational assessment. 
In addition to the collection of assessments as 
provided in subsection 1, 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. 
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3. 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. 
4. Excess funds. If assessments and other receipts by the association, board or 
administrator exceed the actual losses and administrative expenses of the association, the 
board shall hold the excess as interest and may use those excess funds to offset future 
losses or to reduce reinsurance premiums. As used in this subsection, "future losses" 
includes reserves for claims incurred but not reported. 
5. 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. 
§390S. Coverage for reinsurance 
For individual health plans issued or renewed on or after July 1, 2009 pursuant to 
section 2736-C, an insurer may designate through the use of individual health statements 
or other reasonable means a person covered under an individual health plan to be 
reinsured by the association in accordance with section 3909 and rules adopted by the 
association. 
§3909. Reinsurance; premium rates 
1. Reinsurance amount. Any insurer must be reinsured by the association to the 
level of coverage provided in this subsection for individuals designated by the insurer 
pursuant to section 3908 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. 
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B. A reinsuring insurer is eligible for reimbursement on claims only for the calendar 
year in which the claims are paid. Beginning October 1, 2009, a reinsuring insurer 
may submit a request for reimbursement to the association at any time during the 
calendar year once the claims of a reinsured person have met the claims levels 
specified in paragraph A, but all reimbursement requests must be submitted no later 
than April 1 st following the end of the calendar year for which the reimbursement 
requests are being made. The association may require a reinsuring insurer to submit 
the reimbursement request and any claims data in connection with the request on 
forms prescribed by the association. 
C. 
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. 
2. Premium rates. The association may charge reinsuring insurers premium rates 
established in accordance with this subsection. 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 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. 
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. 
§3911. Reimbursement of insurers 
1. Reimbursement. An insurer may seek reimbursement from the association and 
the association shall reimburse the insurer to the extent claims paid by the insurer after 
July I, 2009 meet the requirements for reinsurance pursuant to section 3909 and the 
insurer meets the following criteria: 
A. The insurer sold an individual health plan between December 1, 1993 and June 
30, 2008, and the policy that was sold has been continuously renewed by the insured; 
B. The insurer is able to determine through the use of individual health statements, 
claims history or any reasonable means that at any time while the policy was in effect 
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the insured was diagnosed with one of the following medical conditions: acquired 
immune deficiency syndrome, angina pectoris, ascites, chemical dependency, 
cirrhosis of the liver, coronary occlusion, cystic fibrosis, Friedreich's ataxia, 
hemophilia, Hodgkin's disease, Huntington's chorea, juvenile diabetes, leukemia, 
metastatic cancer, motor or sensory aphasia, multiple sclerosis, muscular dystrophy, 
myasthenia gravis, myotonia, heart disease requiring open-heart surgery, Parkinson's 
disease, polycystic kidney disease, psychotic disorders, quadriplegia, stroke, 
syringomyelia or Wilson's disease; and 
C. The insurer has closed its book of business for individual health plans sold prior 
to July 1,2009. 
2. Rules. The superintendent may adopt rules to facilitate payment to an insurer 
pursuant to this section. Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. B-9. 
Maine Individual Reinsurance Pool Association board; 
staggered terms. Notwithstanding the Maine Revised Statutes, Title 24-A, section 
3903, subsection 2, paragraph B, the terms for initial appointments to the board of 
directors of the Maine Individual Reinsurance Pool Association are as folIows. 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 3 members serve for a term of 3 years. The appointing 
authority shall designate the period of service of each initial appointee at the time of 
appointment. 
PART C 
Sec. C-l. 24-A MRSA §6912, sub-§4, as enacted by PL 2003, c. 469, Pt. A, §8, 
is amended to read: 
4. Amount subsidized. Dirigo Health may ffiH.i.t YMY the amount subsidized of the 
payment made by individual plan enrollees under section 6910, subsection 4, paragraph C 
to 40% of the paymeftt to more closely parallel the subsidy recei'fed by employees of the 
subsidy granted to eligible individuals from the subsidy received by eligible employees in 
accordance with the sliding scale established pursuant to this section. 1ft no case may the 
subsidy granted to eligible individuals ift accordaace with subsection 2, paragraph A 
exceed the maximum subsidy level available to other eligible individuals.' 
Amend the bill by striking out all of Part E and inserting the following: 
'PARTE 
Sec. E-l. 24-A MRSA §6913, as amended by PL 2007, c. I, Pt. X, § § I and 2 and 
affected by §3, is repealed. 
Sec. E-2. 24-A MRSA §6913-A is enacted to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" ~" to H.P. 1608, L.D. 2247 
§6913-A. Health access surcharge 
1. 
Health access surcharge on paid claims required from health insurance 
carriers, 3rd-party administrators and employee benefit excess insurance carriers. 
All health insurance carriers, employee benefit excess insurance carriers and 3rd-party 
administrators, not including carriers and 3rd-party administrators with respect to 
accidental injury, specified disease, hospital indemnity, dental, vision, disability income, 
long-term care, Medicare supplement or other limited benefit health insurance, shall pay a 
health access surcharge not to exceed 1.7% on all paid claims as determined by the board 
in accordance with this section. The following provisions govern the health access 
surcharge. 
A. A health insurance and employee benefit excess insurance carrier is not required 
to pay a surcharge on policies or contracts insuring federal employees. 
B. The surcharge applies to paid claims as follows: 
(1) For paid claims beginning July 1,2008 and until June 30, 2009, the surcharge 
is 1.7% of paid claims; 
(2) For paid claims beginning July 1,2009 and until June 30, 2010, the surcharge 
is 1.6% of paid claims; 
(3) For paid claims beginning July 1,2010 and until June 30, 2011, the surcharge 
is 1.5% of paid claims; 
(4) For paid claims beginning July 1, 2011 and until June 30,2012, the surcharge 
is 1.4% of paid claims; 
(5) For paid claims beginning July 1, 2012 and until June 30, 2013, the surcharge 
is 1.3% of paid claims; 
(6) For paid claims beginning July 1, 2013 and until June 30, 2014, the surcharge 
is 1.2% of paid claims; 
(7) For paid claims beginning July 1,2014 and until June 30, 2015, the surcharge 
is 1.1 % of paid claims; and 
(8) For paid claims beginning July 1, 2015 and thereafter, the surcharge is 1.0% 
of paid claims. 
C. Surcharge payments must be made monthly to Dirigo Health beginning August 
2008 and are due not less than 15 days after the end of the month and must accrue 
interest at 12% per annum on or after the due date, except that: 
(1) Surcharge payments for 3rd-party administrators for groups of 500 or fewer 
members may be made annually not less than 60 days after the close of the plan 
year. 
D. 
Surcharge payments received by Dirigo Health must be pooled with other 
revenues of that agency in the Dirigo Health Enterprise Fund established in section 
6915. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT..[J "to H.P. 1608, L.D. 2247 
2. Failure to pay health access surcharge payments. The superintendent may 
suspend or revoke, after notice and hearing, the certificate of authority to transact 
insurance in this State of any health insurance carrier or employee benefit excess 
insurance carrier or the license of any 3rd-party administrator to operate in this State that 
fails to pay a health access surcharge. In addition, the superintendent may assess civil 
penalties in accordance with section 12-A against any health insurance carrier, employee 
benefit excess insurance carrier or 3rd-party administrator that fails to pay a health access 
surcharge, may take any other enforcement action authorized under section 12-A to 
collect any unpaid health access surcharge payments and may collect the costs of 
enforcement including attorney's fees from those who fail to pay a health access 
surcharge. 
3. Definitions. As used in this section, the following terms have the following 
meanings. 
A. "Paid claims" means all payments made by health insurance carriers, 3rd-party 
administrators and employee benefit excess carriers for health and medical sef'Lic~ 
provided under policies issued pursuant to the laws of this State that insure residents 
of this State or, in the case of 3rd-party administrators, for health care for residents of 
this State, except that "paid claims" does not include: 
(1) Claims-related expenses and general administrative expenses; 
(2) Payments made to qualifYing providers under a "pay for performance" or 
other incentive compensation arrangement if the payments are not reflected in the 
processing of claims submitted for services rendered to specific covered 
individuals; 
(3) 
Claims paid by carriers and 3rd-party administrators with respect to 
accidental injury, specified disease, hospital indemnity, dental, vision, disability 
income, long-term care, Medicare supplement or other limited benefit health 
insurance, except that claims paid for dental services covered under a medical 
policy are included; 
(4) Claims paid for services rendered to nonresidents of this State; 
(5) Claims paid under retiree health benefit plans that are separate from and not 
included within benefit plans for existing employees; 
(6) Claims paid by an employee benefit excess carrier that have been counted by 
a 3rd-party administrator for determining its savings offset payment; 
(7) Claims paid for services rendered to persons covered under a benefit plan for 
federal employees; and 
(8) Claims paid for services rendered outside of this State to a person who is a 
resident of this State. 
In those instances in which a health insurance carrier, employee benefit excess 
insurance carrier or 3rd-party administrator is contractually entitled to withhold 
certain amounts from payments due to providers of health and medical services in 
order to help ensure that the providers can fulfill any financial obligations they may 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" Go. to H.P. 1608, L.D. 2247 
have under a managed care risk arrangement, the full amounts due the providers 
before application of such withheld amounts must be reflected in the calculation of 
paid claims. 
B. "Claims-related expenses" includes: 
(1) Payments for utilization review, care management, disease management, risk 
assessment and similar administrative services intended to reduce the claims paid 
for health and medical services rendered to covered individuals, usually either by 
attempting to ensure that needed services are delivered in the most efficacious 
manner possible or by helping such covered individuals to maintain or improve 
their health; and 
(2) Payments that are made to or by organized groups of providers of health and 
medical services in accordance with managed care risk arrangements or network 
access agreements, which payments are unrelated to the provision of services to 
specific covered individuals. 
C. 
"Health and medical services" includes, 
but is not limited to, any services 
included in the furnishing of medical care, dental care to the extent covered under a 
medical insurance policy, pharmaceutical benefits or hospitalization, including but 
not limited to services provided in a hospital or other medical facility; ancillary 
services, including but not limited to ambulatory services; physician and other 
practitioner services, including but not limited to services provided by a physician'S 
assistant, nurse practitioner or midwife; and behavioral health services, including but 
not limited to mental health and substance abuse services. 
4. Rulemaking. The board may adopt any rules necessary to implement this section. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. E-3. 24-A MRSA §691S, 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 
section 6913-A 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. E-4. 
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 until the first monthly health access surcharge required 
under Title 24-A, section 6913-A becomes due and payable. 
Sec. E-S. Effective date. This Part takes effect July 1, 2008 or on the effective 
date of this Act, whichever occurs later. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" G " 
to H.P. 1608, L.D. 2247 
/'" 
~" 
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PART F 
Sec. F -1. Appropriations and allocations. The folJowing appropriations and 
allocations are made. 
DIRIGO HEALTH 
Dirigo Health Fund 0988 
Initiative: Allocates Dirigo Health funds from a health access surcharge starting at 1.7% 
on all paid claims. 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
Dirigo Health Fund 0988 
2007-08 
2008-09 
$0 
$31,166,667 
$0 
$31,166,667 
Initiative: Deallocates funds for Dirigo Health costs that were funded by the savings 
offset payment. 
IS 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
DIRIGO HEALTH 
DEPARTMENT TOTALS 
DIRIGO HEALTH FUND 
DEPARTMENT TOTAL - ALL FUNDS 
2007-08 
2008-09 
$0 
($32,900,000) 
$0 
($32,900,000) 
2007-08 
2008-09 
$0 
($1,733,333) 
$0 
($1,733,333) 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment makes the following changes to the bill. 
The amendment modifies the provision in the bill that authorizes the Superintendent 
of Insurance to approve pilot projects to offer health insurance products for people under 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT"~ " to H.P. 1608, L.D. 2247 
the age of 30. The amendment authorizes the superintendent to approve pilot projects that 
do not comply with statutory and regulatory requirements for certain mandated benefits, 
geographic access standards and standard plans if determined to be appropriate to 
establish affordable and attractive products. 
The amendment replaces the reinsurance provision in Part B of the bill. The 
amendment establishes a reinsurance program for the individual health insurance market 
but makes it clear that individuals will not be placed in a separate risk pool or be covered 
under different health plans than those available in the individual market. The amendment 
permits carriers in the individual market to use an individual health assessment to 
designate persons covered under an individual health plan for inclusion in the reinsurance 
program at the time a policy is issued. The amendment requires carriers to account for the 
impact of the reinsurance program in rates for individual health plans filed for approval 
with the Superintendent of Insurance. The amendment imposes a 2% assessment on direct 
premium of health maintenance organizations to partially fund the costs of the 
reinsurance program. 
The amendment also modifies the community rating provisions in the individual 
health insurance market to permit premium rates to vary up to 40% above or below the 
community rate. The amendment retains the provisions in the bill that allow a carrier to 
close its individual book of business and establish a separate community rate for those 
individuals applying for coverage under an individual health plan on or after July 1,2009. 
As in the bill, a carrier must merge the closed book with its open book by July 1,2012 or 
when the number of subscribers remaining in a carrier's closed individual book of 
business is less than 25 percent of the carrier's individual health plan subscriber total as of 
June 30, 2009, whichever is earlier. 
The amendment clarifies Part C of the bill by making clear that the Board of 
Directors of Dirigo Health has authority to vary the amount of the subsidy granted to 
eligible individuals and eligible employees to ensure affordability. 
The amendment makes changes to Part E in the bill related to funding for the Dirigo 
Health Program. The amendment repeals the savings offset payment and replaces it with 
a health access surcharge not to exceed 1.7% on paid claims. The amendment requires 
that the amount of the surcharge be reduced annually by 0.1 % until the surcharge amount 
is 1.0% paid claims. The amendment directs all of the revenue from the health access 
surcharge to support subsidies for the Dirigo Health Program. The amendment removes 
the provisions in Part E of the bill that would have increased the tax on cigarettes from 
$2.00 to $2.50 a pack and equalized the rate of tax on all other tobacco products. 
The amendment makes no changes to Parts D, F and G of the bill. 
The amendment also adds an appropriations and allocations section to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Revised: 04/02108 frac 
LD 2247 
LR 3143(03) 
An Act To Continue Maine's Leadership in Covering the Uninsured 
Fiscal Note for Bill as Amended by Committee Amendment" 0 " 
Committee: Insurance and Financial Services 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
Other Special Revenue Funds 
Dirigo Health Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Dirigo Health Fund 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
$0 
$0 
$0 
$0 
$0 
$0 
2008-09 
$717,701 
$0 
($1,733,333) 
($717,701) 
($38,570) 
($1,733,333) 
Projections 
2009-10 
$1,292,115 
$7,629,618 
$160,000 
($1,292,115) 
$7,558,743 
$160,000 
Projections 
2010-11 
$1,424,540 
$16,022,197 
($973,000) 
($1,424,540) 
$15,944,058 
($973,000) 
The fiscal note assumes the corporate tax revenue loss associated with the health maintenance organization assessment 
will reduce General Fund revenue by $717,701 in fiscal year 2008-09, reflecting initial reductions in quarterly 
corporate tax payments, increasing in subsequent years. 
The fiscal note further assumes the health maintenance organization assessment will be collected by the 
Superintendent of Insurance beginnmg in fiscal year 2009-10 and will total approximately 7.6 million in fiscal year 
2009-10 and $16 million in fiscal year 2010-11. It assumes an allocation of Other Special Revenue Funds will be 
required for the transfer (payment) of the assessment by the Superintendent of Insurance to the Maine Individual High-
risk Reinsurance Pool, a nonprofit legal entity. 
This bill would also eliminate the Saving Offset Payment (SOP), one of the funding sources for the Dirigo Health 
Program, beginning with the assessment effective July 1,2008, and replace this revenue with a health access surcha.< 
starting at 1.7% on paid claims. 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. 
LR3143(03) - Fiscal Note - Page 1 of 2 
If 
,\ 
t 
fJ 
Any additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation can be 
absorbed by the bureau utilizing existing budgeted resources. The difference between the SOP budgeted to be paid by 
the State Employee Health program and the health access surcharge is expected to be minor. 
Dirigo Health Fund Summary 
Revenue Changes: 
Elimination of the Savings Offset Payment 
Paid Claims Surcharge 
Revenue Changes 
Allocation Changes: 
Elimination of the Savings Offset Payment 
Paid Claims Surcharge 
Allocation Changes 
2008-09 
($32,900,000) 
$31,166,667 
($1,733,333) 
($32,900,000) 
$31,166,667 
($1,733,333) 
LR3143(03) - Fiscal Note - Page 2 of2 
Projections 
2009-10 
($32,800,000) 
$32,960,000 
$160,000 
($32,800,000) 
$32,960,000 
$160,000 
Projections 
2010-11 
($32,800,000) 
$31,827 ,000 
($973,000) 
($32,800,000) 
$31,827,000 
($973,000)