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-HA_H_H240 (House)
Amends: 24-A MRSA §2736-C

HOUSE AMENDMENT "ff" 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 1 by striking out all of paragraph C (page 
1, lines 17 to 21 in amendment) and inserting the following: 
'e. 
A carrier may vary the premium rate due to smoking status and family 
membership. 
The superintendent may adopt rules setting forth appropriate 
methodologies regarding rate discounts based on smoking status. 
Rules adopted 
pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 
375, subchapter II A.' 
Amend the amendment in Part A in section 2 in paragraph D in the first line (page 1, 
line 24 in amendment) by striking out the following: "and geographic area" and inserting 
the following: 'and~ geographic area and' 
Amend the amendment in Part A in section 2 in paragraph D by striking out all of 
subparagraphs (5), (6) and (7) (page 2, lines 29 to 43 in amendment) and inserting the 
following: 
'(5) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between July 1, 2012 and 
December 31, 2013, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 3 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 3. The limitation does not apply for 
detennining 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 between January 1, 2014 and 
December 31, 2014, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 4 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
HOUSE AMENDMENT 
% 
':. ~ . 
< •••• 
HOUSE AMENDMENT" ~"to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 4. 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. 
(7) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2015, the 
maximum rate differential due to age and geographic area filed by the carrier as 
determined by ratio is 5 to 1. In determining the rating factor for geographic area 
pursuant to this subparagraph, the ratio between the highest and lowest rating 
factor used by a carrier for geographic area may not exceed 1.5 and the ratio 
between the highest and lowest combined rating factors for age and geographic 
area may not exceed 5. 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.' 
Amend the amendment in Part A by striking out all of section 4 and inserting the 
following: 
'Sec. A-4. 24-A MRSA §2736-C, sub-§2, ~ is enacted to read: 
I. A canier that offered individual health plans prior to July 1, 2012 may close its 
individual book of business sold prior to July 1, 2012 and may establish a separate 
community rate for individuals applying for coverage under an individual health plan 
on or after July 1, 2012. 
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 July 1, 2012 and 
December 31, 2012, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2 to 1. In detemlining the 
rating factor for geographic area pursuant to this subparagraph, the ratio between 
the highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2. 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, 2013 and 
December 31, 2013, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2.5 to 1. In determining the 
rating factor for geographic area pursuant to this subparagraph, the ratio between 
the highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2.5. The limitation does not apply 
for determining rates for an attained age of less than 19 years of age or more than 
years of age. 
HOUSE AMENDMENT 
HOUSE AMENDMENT "W' 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 between January 1, 2014 and 
December 31, 2014, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 3 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 3. 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 between January 1, 2015 and 
December 31, 2015, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 4 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 4. 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, 2016, the 
maximum rate differential due to age and geographic area filed by the carrier as 
determined by ratio is 5 to 1. In determining the rating factor for geographic area 
pursuant to this subparagraph, the ratio between the highest and lowest rating 
factor used by a carrier for geographic area may not exceed 1.5 and the ratio 
between the highest and lowest combined rating factors for age and geographic 
area may not exceed 5. 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 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 information about comparable alternative 
insurance options to individuals in a carrier's closed book of business and upon 
HOUSE AMENDMENT 
~ 
HOUSE AMENDMENT" 
"to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
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 in paragraph C in the first and 2nd lines 
(page 4, lines 16 and 17 in amendment) by striking out the following: "geographic area," 
Amend the amendment in Part A in section 5 in paragraph C in the 5th line (page 4, 
line 20 in amendment) by striking out the following: "geographic area," 
Amend the amendment in Part A in section 6 in paragraph D in the first line (page 4, 
line 25 in amendment) by striking out the following: "age," and inserting the following: 
'age,' 
Amend the amendment in Part A in section 6 in paragraph D in the 2nd line (page 4, 
line 26 in amendment) by striking out the following: "geographio area" and inserting the 
following: 'geographic area' 
Amend the amendment in Part A in section 6 in paragraph D by striking out all of 
subparagraphs (4) to (8) (page 4, lines 41 to 43 and page 5, lines 1 to 22 in amendment) 
and inserting the following: 
'(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between October 1, 2011 and 
December 31, 2012, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2. 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 between January 1, 2013 and 
December 31, 20l3, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2.5 to 1. In determining the 
rating factor for geographic area pursuant to this subparagraph, the ratio between 
the highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2.5. The limitation does not apply 
for determining rates for an attained age of less than 19 years of age or more than 
years of age. 
(6) 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 and geographic 
area filed by the carrier as determined by ratio is 3 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 3. The limitation does not apply for 
HOUSE AMENDMENT 
,~. 
HOUSE AMENDMENT "If" to COM~ITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
determining rates for an attained age of less than 19 years of age or more than 65 
years of age. 
(7) 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 and geographic 
area filed by the carrier as determined by ratio is 4 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 4. 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. 
(8) 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 and geographic area filed by the carrier as 
determined by ratio is 5 to 1. In determining the rating factor for geographic area 
pursuant to this subparagraph, the ratio between the highest and lowest rating 
factor used by a carrier for geographic area may not exceed 1.5 and the ratio 
between the highest and lowest combined rating factors for age and geographic 
area may not exceed 5. 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.' 
Amend the amendment in Part A in section 8 in paragraph H by striking out all of 
subparagraphs (1) to (5) (page 5, lines 36 to 42 and page 6, lines 1 to 18 in amendment) 
and inserting the following: 
'(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between October I, 2011 and 
December 31, 2012, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2. 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, 2013 and 
December 31, 2013, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 2.5 to 1. In determining the 
rating factor for geographic area pursuant to this subparagraph, the ratio between 
the highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 2.5. The limitation does not apply 
for determining rates for an attained age of less than 19 years of age or more than 
years of age. 
HOUSE AMENDMENT 
HOUSE AMENDMENT "tr" 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 between January 1, 2014 and 
December 31, 2014, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 3 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 3. 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 between January 1, 2015 and 
December 31, 2015, the maximum rate differential due to age and geographic 
area filed by the carrier as determined by ratio is 4 to 1. In determining the rating 
factor for geographic area pursuant to this subparagraph, the ratio between the 
highest and lowest rating factor used by a carrier for geographic area may not 
exceed 1.5 and the ratio between the highest and lowest combined rating factors 
for age and geographic area may not exceed 4. 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, 2016, the 
maximum rate differential due to age and geographic area filed by the carrier as 
determined by ratio is 5 to 1. In determining the rating factor for geographic area 
pursuant to this subparagraph, the ratio between the highest and lowest rating 
factor used by a carrier for geographic area may not exceed 1.5 and the ratio 
between the highest and lowest combined rating factors for age and geographic 
area may not exceed 5. 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.' 
Amend the amendment 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: 
'0) 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 §3955 in subsection 1 in paragraph E 
in the 2nd line (page 11, line 15 in amendment) by striking out the following: "and" 
HOUSE AMENDMENT 
it"j' 
HOUSE AMENDMENT ':rt" to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
Amend the amendment in Part B in section 8 in §3955 in subsection 1 in paragraph F 
in the first line (page 11, line 16 in amendment) by striking out the following: "3958." 
and inserting the following: '3958; and' 
Amend the amendment in Part B in section 8 in §3955 in subsection 1 by inserting 
after paragraph F the following: 
'G. Until subsidies are made available to eligible individuals pursuant to the federal 
Affordable Care Act on or after January 1, 2014, provide subsidies to a covered 
person enrolled in an individual health plan pursuant to section 2736-C to mitigate 
the impact of any increase in premium rates as a result of expanding the ability of a 
carrier to vary rates based on age and geographic area as provided in section 2736-C, 
subsection 2, paragraph D. The superintendent shall determine the appropriate level 
of subsidy to be made available by the association through rule. Rules adopted 
pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A.' 
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 enrolled 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 determine 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. 
Amend the amendment 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." 
It includes rating on the basis of geographic area inside of the rating bands for age 
instead of allowing rating outside of the bands and limits rating on the basis of 
geographic area to a rating factor of 1.5. 
HOUSE AMENDMENT 
HOUSE AMENDMENT" 
"to COMMITTEE AMENDMENT "A" to H.P. 979, L.D. 1333 
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 mles adopted no later than January 1, 2012. The amendment designates the mles 
as major substantive. 
The amendment requires the Maine Guaranteed Access Reinsurance Association to 
provide subsidies for individuals to mitigate the impact of premium increases resulting 
from an expansion of the rating bands based on age and geographic area until subsidies 
are made available through the federal Affordable Care Act on or after January 1,2014. 
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 f\ UIRED 
SPONSORED BY: --I.-..c:..........!~~~"""--J----!<~~Lf-AI-+-I 
(Representative PILON) 
TOWN: Saco 
HOUSE AMENDMENT 
Approved: 05112111 
?Hac::.. 
LD 1333 
LR 1371(33) 
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 House Amendment 'ib' to Committee Amendment "A" 
Sponsor: Rep. Pilon of Saco 
Fiscal Note Required: Yes 
Fiscal Note 
No net state fiscal impact 
Fiscal Detail and Notes 
The Maine Guaranteed Access Reinsurance Association is established as a nonprofit legal entity and would therefore 
have no direct fiscal impact on state agencies or programs. Requiring the Association to provide subsidies would 
have no direct fiscal impact on state agencies or programs. 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. 
LRI371(33) - Fiscal Note - Page I of I