Overview of Maine Health Insurance Coverage Laws Joint Select Committee on Health Care Reform Opportunities and Implementation May 20, 2010 Prepared by the Office of Policy and Legal Analysis

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 2 Individual Health Insurance Guaranteed issue---all applicants for coverage accepted without regard to health status Continuity of coverage when moving between plans--no medical underwriting or preexisting conditions Waiting period for preexisting conditions of 12 months may be imposed if no prior coverage for more than 90 days

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 3 Individual Health Insurance Rates may not vary based on gender, health status, claims experience, occupation or industry, or policy duration Rates may vary based on smoking status and family size Community rating---rates may vary on basis of age and geographic area up to 20% above or below community rate Additional changes to community rating (ratio of 2.5 to 1) not implemented ---affected by people’s veto

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 4 Individual Health Insurance Guaranteed renewal of policies Minimum loss ratio of 65%---65% of aggregate premiums must be paid out in medical claims Rates must be approved prior to use Rates not approved if “excessive, inadequate or unfairly discriminatory”

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 5 Small Group Health Insurance Defined as groups with 50 or fewer members Coverage guaranteed to all small groups that meet carrier’s minimum participation requirements—may not exceed 75% of those employees without other existing coverage Same provisions for continuity of coverage with no preexisting condition exclusions as individual health plans

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 6 Small Group Health Insurance Rates may not vary based on gender, health status, claims experience or policy duration Rates may vary based on family membership, smoking status, participation in wellness programs and group size Community rating---rates may vary on basis of age, occupation or industry, and geographic area up to 20% above or below the community rate

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 7 Small Group Health Insurance Minimum loss ratio of 75% or 78% over 3-year period if carrier opts to “file and use” rates Excess premiums refunded if carriers fail to meet 78% loss ratio over 3-year period

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 8 Dependent Care Coverage Insurers must offer coverage to individual and group policyholders for dependents Group policyholder/employer decides whether to purchase coverage, not employee Dependents defined as those under 25 years of age who are unmarried; have no dependent children; and are a resident of Maine or a full- time student

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 9 Annual or Lifetime Limits Individual and group health plans may not impose annual or lifetime limits on aggregate dollar amount of health care claims for services in a provider network Certain health plans excluded: policies with maximum aggregate limit of > $1million; short-term policies; young adult pilot plans; and blanket health insurance Does not prohibit annual or lifetime limits on claims for services outside of provider network Insurers required to disclose limit on face page of policy if limit permitted Applies to all policies issued or renewed on or after January 1, 2011

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 10 Dirigo Health DirigoChoice plan for individuals, sole proprietors and small employers Three plan options offered through Harvard Pilgrim--- $1250 deductible; $1750 deductible; $2500 deductible Small employers must contribute 60% of premium for employees; no required contribution for dependents Subsidies for enrollees with incomes below 300% of Federal Poverty Level Closed to new individuals (subsidized and non- subsidized) and new sole proprietors (subsidized) Access payment paid by insurers supports subsidies and Maine Quality Forum

May 20, 2010JSC on Health Care Reform Opportunities and Implementation 11 Dirigo Health Part-time worker voucher program for employees of eligible large employers (50+ employees) Federal grant funding for program Employees must have incomes below 300% FPL Employers must contribute at least 5% of employee premium Excluded policies: plans with deductibles of $5000+; health savings accounts w/o 100% preventive care; and policies for specified diseases Projected enrollment of 3,000 Subsidies begin June 1, 2010