An Act To Modify Rating Practices for Individual and Small Group Health Plans and To Encourage Value-based Purchasing of Health Care Services
Maine Legislature, Session 125, LD 1333
Committee Amendment CA_A-SA_B_S82 (Senate)

SENATE AMENDMENT "0 " to COMMITTEE AMENDMENT "A" to H.P. 979, 
L.D. 1333, Bill, "An Act To Modify Rating Practices for Individual and Small Group 
Health Plans and To Encourage Value-based Purchasing of Health Care Services" 
Amend the amendment in Part A in section 2 by striking out all of paragraph D (page 
1, lines 24 to 33, page 2, lines 1 to 43 and page 3, lines 1 to 4 in amendment) and 
inserting the following: 
'D. A carrier may vary the premium rate due to age, smoking status and geographic 
area in accordance with the limitations set out in this paragraph. 
(l) 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 de livelY, 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 between July 15, 1995 and J.m:ie 
30, 2009 December 31, 2013, 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 eKecuted, delivered, issued 
for delivery, continued or rene\ved in this State on or after July 1, 2009, for each 
health benefit plan offered by a caHier, the highest premium rate for each rating 
tier may not exceed 2.5 times the premium rate that could be charged to an 
eligible individual '<'lith the lowest premium rate for that rating tier in a given 
rating period. For purposes of this subparagraph, "rating tier" means each 
category of individual or family composition for '""hich a carrier charges separate 
~ 
(a) In determining the rating factor for geographic area pursuant to this 
subparagraph, the ratio bet'.voon tho highest and lowest rating factor used by a 
SENATE AMENDMENT 
~. 
~ <0. 
SENATE AMENDMENT "S" to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
carrier for geographic area may not exceed 1.5 and the ratio between highest 
and lo\'.'est combined rating factors for age and geographic area may not 
exceed 2.5. 
(b) 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 
that '""ould have resulted from using projected claims and expenses and the 
rating factors applicable prior to July 1, 2009, as determined vlithout taking 
into account the savings resulting from the Maine Individual Reinsurance 
Association established in chapter 54. 
(c) 
The superintendent shall adopt rules 
setting forth appropriate 
methodologies regarding determination of rating factors purSl:lttl1t to this 
subparagraph. Rules adopted pursuant to this division are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2 A. 
(5) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, the 
maximum rate differential due to age and geographic area filed by the carrier as 
determined by ratio is 3 to 1. The limitation does not apply for determining rates 
for an attained age of less than 19 years of age or more than 65 years of age. 
(6) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, the 
maximum rate differential due to smoking status filed by the carrier as 
determined by ratio is 1.5 to I.' 
Amend the amendment in Part A in section 4 by striking out all of paragraph I (page 
3, lines 8 to 42 and page 4, lines 1 to 13 in amendment) and inserting the following: 
'I. A carrier that offerecl inclividllal health phns prior to J::Inu::Iry 1, 2014 may close its 
individual book of business sold prior to January 1, 2014 and may establish a separate 
community rate for individuals applying for coverage under an individual health plan 
on or after January 1, 2014. If a carrier closes its individual book of business as 
permitted under this paragraph, the carrier may vary the premium rate for individuals 
in that closed book of business only as permitted in this paragraph. 
(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January l, 2014 and 
December 31, 2014, the maximum rate differential due to age, geographic area 
and occupation and industry filed by the catTier as determined by ratio is 2 to 1. 
The limitation does not apply for determining rates for an attained age of less 
than 19 years of age or more than 65 years of age. 
(2) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2015 and 
December 31, 2015, the maximum rate differential due to age, geographic area 
and occupation and industry filed by the carrier as determined by ratio is 2.5 to I. 
The limitation does not apply for determining rates for an attained age of less 
than 19 years of age or more than 65 years of age. 
SENA TE AMENDMENT 
~ .\. 
SENATE AMENDMENT "~" to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
(3) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2016, the 
maximum rate differential due to age, geographic area and occupation and 
industry filed by the carrier as determined by ratio is 3 to L The limitation does 
not apply for determining rates for an attained age of less than 19 years of age or 
more than 65 years of age. 
(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, 2012, the 
maximum rate differential due to smoking status filed by the carrier as 
determined by ratio is 1.5 to 1. 
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. The superintendent shall direct the Consumer 
Health Care Division, established in section 4321, to work with carriers and health 
advocacy organizations to provide infonnation about comparable alternative 
insurance options to individuals in a carrier's closed book of business and upon 
request to assist individuals to facilitate the transition to an individual health plan in 
that carrier's or another carrier's open book of business.' 
Amend the amendment in Part A in section 5 by striking out all of paragraph C (page 
4, lines 16 to 22 in amendment) and inserting the following: 
'e. A carrier may vary the premium rate due to family membership, smoking status, 
participation in wellness programs and group size. The superintendent may adopt 
rules setting forth appropriate methodologies regarding rate discounts for 
participation in wellness programs and rating for familv membership and group size 
pursuant to this paragraph. Rules adopted pursuant to this paragraph are routine 
technical rules as defined in Title 5, chapter 375, subchapter lI-A 2-A.' 
Amend the amendment in Part A in section 6 by striking out all of paragraph 0 (page 
4, lines 25 to 43 and page 5, lines 1 to 26 in amendment) and inserting the following: 
'D. A carrier may vary the premium rate due to age, occupation or industry and 
geographic area and smoking status 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 
SENA TE AMENDMENT 
1(\." ,. 
SENATE AMENDMENT "-0" to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
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 af.t8f between July 15, 1995 and 
December 31, 2013, the premium rate may not deviate above or below the 
community rate filed by the carrier by more than 20%, except as provided in 
paragraph D 1. 
(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, the 
maximum rate differential due to age, geographic area and occupation and 
industry filed by the carrier as determined by ratio is 3 to 1. The limitation does 
not apply for determining rates for an attained age of less than 19 years of age or 
more than 65 years of age. 
(5) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, the 
maximum rate differential due to smoking status filed by the carrier as 
detennined by ratio is 1.5 to 1.' 
Amend the amendment in Pat1 A in section 8 by striking out all of paragraph H (page 
5, lines 30 to 42 and page 6, lines I to 22 in amendment) and inserting the following: 
rH. A carrier that offered small group health plans prior to January 1, 2014 may close 
its small group book of business sold prior to January 1, 2014 and may establish a 
separate community rate for eligible groups applying for coverage under a small 
group health plan on or after January 1,2014. Ifa carrier closes its small group book 
of business as pennitted under this paragraph, the carrier may vary the premium rate 
for that closed book of business only as permitted in this paragraph. 
(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2014 and 
December 31, 2014, the maximum rate differential due to age, geographic area 
and occupation and industry filed by the carrier as detennined by ratio is 2 to 1. 
The limitation does not apply for determining rates for an attained age of less 
than 19 years of age or more than 65 years of age. 
(2) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2015 and 
December 31, 2015, the maximum rate differential due to age, geographic area 
and occupation and industry filed by the carrier as determined by ratio is 2.5 to 1. 
The limitation does not apply for determining rates for an attained age of less 
than 19 years of age or more than 65 years of age. 
(3) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2016 and 
December 31, 2016, the maximum rate differential due to age, geographic area 
and occupation and industry filed by the carrier as determined by ratio is 3 to 1. 
The limitation does not apply for determining rates for an attained age of less 
than 19 years of age or more than 65 years of age. 
SENA TE AMENDMENT 
't-.. ,. 
SENATE AMENDMENT'~"to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after October 1, 2011, the 
maximum rate differential due to smoking status filed by the carrier as 
determined by ratio is 1.5 to 1.' 
Amend the amendment in Part A by adding after section 8 the following: 
'Sec. A-9. Contingent effective date. This Part does not take effect unless a 
health insurance exchange established by the State pursuant to the federal Patient 
Protection and Affordable Care Act, Section 1311 is fully operational and subsidies are 
made available to eligible individuals for health coverage. 
The Department of 
Professional and Financial Regulation, Bureau of Insurance shall notify the Secretary of 
State, Secretary of the Senate, Clerk of the House and Revisor of Statutes of the date that 
the exchange is fully operational and subsidies are made available.' 
Amend the bill in Part B in section 8 in §3953 in subsection 2 in paragraph A by 
striking out all of subparagraphs (1) and (2) (page 10, lines 7 to 14 in amendment) and 
inserting the following: 
'( 1) Seven members appointed by the superintendent: 3 members who represent 
statewide organizations that advocate for consumers in the field of health policy; 
members who represent medical providers; one member who represents a 
statewide organization that represents small businesses; and one member who 
represents producers. A board member appointed by the superintendent may not 
be removed without cause; and 
(2) Four members appointed by the member insurers, at least one of whom is a 
domestic insurer and at least one of whom is a 3rd-party administrator.' 
Amend the amendment in Part B in section 8 in §3957 in subsection 1 in the 3rd line 
(page 13, line 13 in amendment) by inserting after the following: 
"necessary" the 
following: 'in accordance with subsection 2' 
Amend the amendment in Part B in section 8 in §3957 by striking out all of 
subsection 2 (page 13, lines 16 to 19 in amendment) and inserting the following: 
'2. Maximum assessment. The board shall assess each insurer a dollar amount per 
month per covered person emolled in medical insurance insured, reinsured or 
administered by the insurer as established by the superintendent pursuant to this 
subsection. 
No later than January 1, 2012, the superintendent shall adopt rules to 
establish the amount of the assessment on insurers paid to the association using actuarial 
science to detennine the assessment based on the estimated number of individuals 
designated for reinsurance through the association and the estimated funding needed for 
that reinsurance. Rules adopted pursuant to this subsection are major substantive rules as 
defined in Title 5, chapter 375, subchapter 2-A. An insurer may not be assessed on 
policies or contracts insuring federal or state employees.' 
Amend the amendment by striking out all of Part E. 
Amend the amendment in Part J by striking out all of sections 1 to 9. 
Amend the amendment in Part J by striking out all of sections 19 to 21. 
SENATE AMENDMENT 
SENATE AMENDMENT "'6" to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
Amend the amendment in Part J by striking out all of sections 23 and 24. 
Amend the amendment by relettering or renumbering any nonconsecutive Part letter 
or section number to read consecutively. 
SUMMARY 
This amendment makes the following changes to Committee Amendment "A." 
1. It changes the maximum rate differential for individual health plans on the basis of 
age and geographic area from l.5: 1 to 3: 1 effective January 1, 2014. The committee 
amendment expands the rating bands to 5: lover a period of 4 years. 
2. It changes the maximum rate differential for small group health plans on the basis 
of age, geographic area and occupation and industry from 1.5: 1 to 3: 1 effective January 1, 
2014. 
3. It includes rating on the basis of geographic area inside of the rating bands for age 
instead of allowing rating outside of the bands. 
The changes made to community rating by this amendment take effect only if the 
health insurance exchange established by the federal Patient Protection and Affordable 
Care Act is fully operational and subsidies are available. 
The amendment specifies that 3 of the members of the Board of Directors of the 
Maine Guaranteed Access Reinsurance Association must represent consumer advocacy 
organizations in the field of health policy and reduces the insurer members from 5 to 4. 
The amendment also requires the Superintendent of Insurance to determine the 
assessment amount paid by insurers to fund the association after an actuarial study 
through rules adopted no later than January 1, 2012. The amendment designates the rules 
as major substantive. 
The amendment removes Part E of the committee amendment, which repeals the 
State Health Plan and the Advisory Council on Health Systems Development. 
The amendment also changes cross-references to reflect the changes made by this 
amendment to Committee Amendment "A." 
FISCAL NOTE REQUIRED 
(See attached) 
SPONSORED BY, ~ 
(Senator 
NNIGAN) 
. 
COUNTY: Cumberland 
SENA TE AMENDMENT 
Approved: 05/09/11 
fraC!. 
LD 1333 
LR 1371(14) 
An Act To Modify Rating Practices for Individual and Small Group Health Plans and To Encourage 
Value-based Purchasing of Health Care Services 
Fiscal Note for Senate Amendment "(3' to Committee Amendment "A" 
Sponsor: Sen. Brannigan of Cumberland 
Fiscal Note Required: Yes 
Fiscal Note 
No net fiscal impact 
Fiscal Detail and Notes 
Any net additional costs and/or savings to the Bureau of Insurance in the Department of Professional and Financial 
Regulation are expected to be minor. 
LR1371(14) - Fiscal Note - Page 1 of 1