C. A carrier may vary the premium rate due to smoking status and family membership.

D. A carrier may vary the premium rate due to age, smoking status, occupation or industry, and geographic area only under the following schedule and within the listed percentage bands.

(1) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State between December 1, 1993 and July 14, 1994, the premium rate may not deviate above or below the community rate filed by the carrier by more than 50%.

(2) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State between July 15, 1994 and July 14, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 33%.

(3) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State after July 15, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 20%.

E. A separate community rate may be established for individuals eligible for Medicare Part A without paying a premium; however, this rate may not be applied if both the Medicare eligibility date and the issue date are prior to July 1, 2000.

Sec. 3. 24-A MRSA §2808-B, sub-§1, ¶B, as enacted by PL 1991, c. 861, §2, is amended to read:

B. "Community rate" means the rate to be charged to all eligible groups for small group health plans prior to any adjustments pursuant to subsection 2, paragraphs B-1 and C and D.

Sec. 4. 24-A MRSA §2808-B, sub-§2, ¶B, as amended by PL 1993, c. 477, Pt. B, §1 and affected by Pt. F, §1, is further amended to read:

B. A carrier may not vary the premium rate due to the gender, health status, claims experience or policy duration of the eligible group or members of the group.

Sec. 5. 24-A MRSA §2808-B, sub-§2, ¶B-1 is enacted to read:

B-1.__A carrier may vary the premium rate due to the health status of the eligible group or members of the group only as permitted by this paragraph.

(1)__The carrier may have one or more classes of substandard rating and one or more classes of superstandard rating.

(2)__An eligible group may be offered a substandard rate or a superstandard rate based on health status, health history or healthy lifestyle of the eligible group or members of the group.

(3)__The highest rating class may not exceed 150% of the lowest rating class.

(4)__The carrier may reduce the multiple that an eligible group is charged on any renewal date based on improved health status, but may never increase the multiple.

The superintendent may adopt rules setting forth appropriate methodologies regarding substandard and superstandard ratings based on health status, health history or healthy lifestyle.__Rules adopted pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

Sec. 6. 24-A MRSA §2808-B, sub-§2, ¶C, as amended by PL 1993, c. 477, Pt. B, §1 and affected by Pt. F, §1, is further amended to read:

C. A carrier may vary the premium rate due to smoking status, family membership, participation in wellness programs and group size.

Sec. 7. 24-A MRSA §2808-B, sub-§2, ¶D, as amended by PL 1997, c. 445, §14 and affected by §32, is repealed.

Sec. 8. 24-A MRSA §2808-B, sub-§2, ¶D-1, as enacted by PL 1997, c. 445, §14 and affected by §32, is repealed.

Sec. 9. 24-A MRSA §2808-B, sub-§2, ¶D-2, as reallocated by RR 1997, c. 1, §22, is amended to read:

D-2. Notwithstanding the requirements of paragraph D, rates Rates with respect to employees whose work site is not in this State may be based on area adjustment factors appropriate to that location.

SUMMARY

This bill makes the following changes relating to the rating practices of health carriers offering individual and small group health plans.

1. It eliminates the requirement that health insurers may vary the rates for individual and small group health plans only within certain rating bands based on age, smoking status, occupation or industry and geographic area.

2. It removes the prohibition on varying premium rates due to the health status of individuals or small group members and allows the rates to vary depending on the ability of the individual or small group members to maintain a healthy lifestyle. The highest rates that may be charged for individuals or small group members with poor health status is limited to 150% of the lowest rate.

3. It allows carriers to vary premium rates based on the smoking status of the individual or small group members.