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H.R.4460 - Health Care Choice Act of 2007
To amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce.
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December 12, 2007
Mr. SHADEGG (for himself, Mrs. MUSGRAVE, Mr. AKIN, Mr. DAVID DAVIS of Tennessee, Mr. FEENEY, Mr. PENCE, Mr. GINGREY, Mr. FORTUN.AE6O, Mr. RYAN of Wisconsin, Mr. WELDON of Florida, Mr. MARCHANT, Mr. CAMPBELL of California, Ms. FOXX, Mr. KINGSTON, Mr. WILSON of South Carolina, Ms. FALLIN, Mr. ISSA, Mr. FRANKS of Arizona, Mr. PITTS, Mr. BROWN of South Carolina, Mr. DANIEL E. LUNGREN of California, Mr. BARTLETT of Maryland, Mr. WAMP, Mrs. BLACKBURN, Mr. PRICE of Georgia, Mr. PUTNAM, Mr. SMITH of Nebraska, Mr. PAUL, Mr. BOUSTANY, Mrs. CUBIN, Mr. MILLER of Florida, Mr. SOUDER, Mr. RENZI, Mr. SESSIONS, Mr. HOEKSTRA, Mr. BURTON of Indiana, Mr. CANNON, Mr. HERGER, Mr. PLATTS, Mrs. MCMORRIS RODGERS, Mr. HENSARLING, Mrs. BACHMANN, and Mr. FLAKE) introduced the following bill; which was referred to the Committee on Energy and CommerceCommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF LAW.
SEC. 3. FINDINGS.
(1) The application of numerous and significant variations in State law impacts the ability of insurers to offer, and individuals to obtain, affordable individual health insurance coverage, thereby impeding commerce in individual health insurance coverage.CommentsClose CommentsPermalink
(2) Individual health insurance coverage is increasingly offered through the Internet, other electronic means, and by mail, all of which are inherently part of interstate commerce.CommentsClose CommentsPermalink
(3) In response to these issues, it is appropriate to encourage increased efficiency in the offering of individual health insurance coverage through a collaborative approach by the States in regulating this coverage.CommentsClose CommentsPermalink
(4) The establishment of risk-retention groups has provided a successful model for the sale of insurance across State lines, as the acts establishing those groups allow insurance to be sold in multiple States but regulated by a single State.CommentsClose CommentsPermalink
SEC. 4. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE.
`Part D--Cooperative Governing of Individual Health Insurance Coverage
`SEC. 2795. DEFINITIONS.
`(1) PRIMARY STATE- The term `primary State' means, with respect to individual health insurance coverage offered by a health insurance issuer, the State designated by the issuer as the State whose covered laws shall govern the health insurance issuer in the sale of such coverage under this part. An issuer, with respect to a particular policy, may only designate one such State as its primary State with respect to all such coverage it offers. Such an issuer may not change the designated primary State with respect to individual health insurance coverage once the policy is issued, except that such a change may be made upon renewal of the policy. With respect to such designated State, the issuer is deemed to be doing business in that State.CommentsClose CommentsPermalink
`(2) SECONDARY STATE- The term `secondary State' means, with respect to individual health insurance coverage offered by a health insurance issuer, any State that is not the primary State. In the case of a health insurance issuer that is selling a policy in, or to a resident of, a secondary State, the issuer is deemed to be doing business in that secondary State.CommentsClose CommentsPermalink
`(3) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the meaning given such term in section 2791(b)(2), except that such an issuer must be licensed in the primary State and be qualified to sell individual health insurance coverage in that State.CommentsClose CommentsPermalink
`(4) INDIVIDUAL HEALTH INSURANCE COVERAGE- The term `individual health insurance coverage' means health insurance coverage offered in the individual market, as defined in section 2791(e)(1).CommentsClose CommentsPermalink
`(5) APPLICABLE STATE AUTHORITY- The term `applicable State authority' means, with respect to a health insurance issuer in a State, the State insurance commissioner or official or officials designated by the State to enforce the requirements of this title for the State with respect to the issuer.CommentsClose CommentsPermalink
`(6) HAZARDOUS FINANCIAL CONDITION- The term `hazardous financial condition' means that, based on its present or reasonably anticipated financial condition, a health insurance issuer is unlikely to be able--CommentsClose CommentsPermalink
`(iv) the provision to an individual in relation to individual health insurance coverage of management, operations, and investment activities of a health insurance issuer; andCommentsClose CommentsPermalink
`(v) the provision to an individual in relation to individual health insurance coverage of loss control and claims administration for a health insurance issuer with respect to liability for which the issuer provides insurance.CommentsClose CommentsPermalink
`(B) EXCEPTION- Such term does not include any law, rule, regulation, agreement, or order governing the use of care or cost management techniques, including any requirement related to provider contracting, network access or adequacy, health care data collection, or quality assurance.CommentsClose CommentsPermalink
`(8) STATE- The term `State' means the 50 States and includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.CommentsClose CommentsPermalink
`(G) A pattern or practice of compelling insured individuals or their beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.CommentsClose CommentsPermalink
`(H) A pattern or practice of attempting to settle or settling claims for less than the amount that a reasonable person would believe the insured individual or his or her beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application.CommentsClose CommentsPermalink
`(10) FRAUD AND ABUSE- The term `fraud and abuse' means an act or omission committed by a person who, knowingly and with intent to defraud, commits, or conceals any material information concerning, one or more of the following:CommentsClose CommentsPermalink
`(A) Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by an insurer, a reinsurer, broker or its agent, false information as part of, in support of or concerning a fact material to one or more of the following:CommentsClose CommentsPermalink
`(viii) The formation, acquisition, merger, reconsolidation, dissolution or withdrawal from one or more lines of insurance or reinsurance in all or part of a State by an insurer or reinsurer.CommentsClose CommentsPermalink
`(B) Solicitation or acceptance of new or renewal insurance risks on behalf of an insurer reinsurer or other person engaged in the business of insurance by a person who knows or should know that the insurer or other person responsible for the risk is insolvent at the time of the transaction.CommentsClose CommentsPermalink
`(C) Transaction of the business of insurance in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of insurance.CommentsClose CommentsPermalink
`SEC. 2796. APPLICATION OF LAW.
`(a) IN GENERAL- The covered laws of the primary State shall apply to individual health insurance coverage offered by a health insurance issuer in the primary State and in any secondary State, but only if the coverage and issuer comply with the conditions of this section with respect to the offering of coverage in any secondary State.CommentsClose CommentsPermalink
`(b) EXEMPTIONS FROM COVERED LAWS IN A SECONDARY STATE- Except as provided in this section, a health insurance issuer with respect to its offer, sale, rating (including medical underwriting), renewal, and issuance of individual health insurance coverage in any secondary State is exempt from any covered laws of the secondary State (and any rules, regulations, agreements, or orders sought or issued by such State under or related to such covered laws) to the extent that such laws would--CommentsClose CommentsPermalink
`(1) make unlawful, or regulate, directly or indirectly, the operation of the health insurance issuer operating in the secondary State, except that any secondary State may require such an issuer--CommentsClose CommentsPermalink
`(A) to pay, on a nondiscriminatory basis, applicable premium and other taxes (including high risk pool assessments) which are levied on insurers and surplus lines insurers, brokers, or policyholders under the laws of the State;CommentsClose CommentsPermalink
`(C) to submit to an examination of its financial condition by the State insurance commissioner in any State in which the issuer is doing business to determine the issuer's financial condition, if--CommentsClose CommentsPermalink
`(i) the State insurance commissioner of the primary State has not done an examination within the period recommended by the National Association of Insurance Commissioners; andCommentsClose CommentsPermalink
`(ii) any such examination is conducted in accordance with the examiners' handbook of the National Association of Insurance Commissioners and is coordinated to avoid unjustified duplication and unjustified repetition;CommentsClose CommentsPermalink
`(E) to comply with an injunction issued by a court of competent jurisdiction, upon a petition by the State insurance commissioner alleging that the issuer is in hazardous financial condition;CommentsClose CommentsPermalink
`(F) to participate, on a nondiscriminatory basis, in any insurance insolvency guaranty association or similar association to which a health insurance issuer in the State is required to belong;CommentsClose CommentsPermalink
`(G) to comply with any State law regarding fraud and abuse (as defined in section 2795(10)), except that if the State seeks an injunction regarding the conduct described in this subparagraph, such injunction must be obtained from a court of competent jurisdiction;CommentsClose CommentsPermalink
`(c) CLEAR AND CONSPICUOUS DISCLOSURE- A health insurance issuer shall provide the following notice, in 12-point bold type, in any insurance coverage offered in a secondary State under this part by such a health insurance issuer and at renewal of the policy, with the 5 blank spaces therein being appropriately filled with the name of the health insurance issuer, the name of primary State, the name of the secondary State, the name of the secondary State, and the name of the secondary State, respectively, for the coverage concerned:CommentsClose CommentsPermalink
`This policy is issued by XXXXX and is governed by the laws and regulations of the State of XXXXX, and it has met all the laws of that State as determined by that State's Department of Insurance. This policy may be less expensive than others because it is not subject to all of the insurance laws and regulations of the State of XXXXX, including coverage of some services or benefits mandated by the law of the State of XXXXX. Additionally, this policy is not subject to all of the consumer protection laws or restrictions on rate changes of the State of XXXXX. As with all insurance products, before purchasing this policy, you should carefully review the policy and determine what health care services the policy covers and what benefits it provides, including any exclusions, limitations, or conditions for such services or benefits.'.CommentsClose CommentsPermalink
`(1) IN GENERAL- For purposes of this section, a health insurance issuer that provides individual health insurance coverage to an individual under this part in a primary or secondary State may not upon renewal--CommentsClose CommentsPermalink
`(A) move or reclassify the individual insured under the health insurance coverage from the class such individual is in at the time of issue of the contract based on the health-status related factors of the individual; orCommentsClose CommentsPermalink
`(B) increase the premiums assessed the individual for such coverage based on a health status-related factor or change of a health status-related factor or the past or prospective claim experience of the insured individual.CommentsClose CommentsPermalink
`(C) from changing premiums or offering discounted premiums to individuals who engage in wellness activities at intervals prescribed by the issuer, if such premium changes or incentives--CommentsClose CommentsPermalink
`(E) from retroactively adjusting the rates charged an insured individual if the initial rates were set based on material misrepresentation by the individual at the time of issue.CommentsClose CommentsPermalink
`(e) PRIOR OFFERING OF POLICY IN PRIMARY STATE- A health insurance issuer may not offer for sale individual health insurance coverage in a secondary State unless that coverage is currently offered for sale in the primary State.CommentsClose CommentsPermalink
`(f) LICENSING OF AGENTS OR BROKERS FOR HEALTH INSURANCE ISSUERS- Any State may require that a person acting, or offering to act, as an agent or broker for a health insurance issuer with respect to the offering of individual health insurance coverage obtain a license from that State, with commissions or other compensation subject to the provisions of the laws of that State, except that a State may not impose any qualification or requirement which discriminates against a nonresident agent or broker.CommentsClose CommentsPermalink
`(g) DOCUMENTS FOR SUBMISSION TO STATE INSURANCE COMMISSIONER- Each health insurance issuer issuing individual health insurance coverage in both primary and secondary States shall submit--CommentsClose CommentsPermalink
`(A) a copy of the plan of operation or feasibility study or any similar statement of the policy being offered and its coverage (which shall include the name of its primary State and its principal place of business);CommentsClose CommentsPermalink
`(2) to the insurance commissioner of each secondary State in which it offers individual health insurance coverage, a copy of the issuer's quarterly financial statement submitted to the primary State, which statement shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by--CommentsClose CommentsPermalink
`(2) the solicitation or sale of individual health insurance coverage that violates the requirements of the law of a secondary State which are described in subparagraphs (A) through (H) of section 2796(b)(1).CommentsClose CommentsPermalink
`(i) Power of Secondary States To Take Administrative Action- Nothing in this section shall be construed to affect the authority of any State to enjoin conduct in violation of that State's laws described in section 2796(b)(1).CommentsClose CommentsPermalink
`(1) IN GENERAL- Subject to the provisions of subsection (b)(1)(G) (relating to injunctions) and paragraph (2), nothing in this section shall be construed to affect the authority of any State to make use of any of its powers to enforce the laws of such State with respect to which a health insurance issuer is not exempt under subsection (b).CommentsClose CommentsPermalink
`(2) COURTS OF COMPETENT JURISDICTION- If a State seeks an injunction regarding the conduct described in paragraphs (1) and (2) of subsection (h), such injunction must be obtained from a Federal or State court of competent jurisdiction.CommentsClose CommentsPermalink
`(m) Guaranteed Availability of Coverage to HIPAA Eligible Individuals- To the extent that a health insurance issuer is offering coverage in a primary State that does not accommodate residents of secondary States or does not provide a working mechanism for residents of a secondary State, and the issuer is offering coverage under this part in such secondary State which has not adopted a qualified high risk pool as its acceptable alternative mechanism (as defined in section 2744(c)(2)), the issuer shall, with respect to any individual health insurance coverage offered in a secondary State under this part, comply with the guaranteed availability requirements for eligible individuals in section 2741.CommentsClose CommentsPermalink
`SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY SELL INTO SECONDARY STATES.
`A health insurance issuer may not offer, sell, or issue individual health insurance coverage in a secondary State if the State insurance commissioner does not use a risk-based capital formula for the determination of capital and surplus requirements for all health insurance issuers.CommentsClose CommentsPermalink
`SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
`(a) Right to External Appeal- A health insurance issuer may not offer, sell, or issue individual health insurance coverage in a secondary State under the provisions of this title unless----CommentsClose CommentsPermalink
`(1) both the secondary State and the primary State have legislation or regulations in place establishing an independent review process for individuals who are covered by individual health insurance coverage, orCommentsClose CommentsPermalink
`(2) in any case in which the requirements of subparagraph (A) are not met with respect to the either of such States, the issuer provides an independent review mechanism substantially identical (as determined by the applicable State authority of such State) to that prescribed in the `Health Carrier External Review Model Act' of the National Association of Insurance Commissioners for all individuals who purchase insurance coverage under the terms of this part, except that, under such mechanism, the review is conducted by an independent medical reviewer, or a panel of such reviewers, with respect to whom the requirements of subsection (b) are met.CommentsClose CommentsPermalink
`(1) IN GENERAL- In referring a denial of a claim to an independent medical reviewer, or to any panel of such reviewers, to conduct independent medical review, the issuer shall ensure that--CommentsClose CommentsPermalink
`(B) with respect to each review, each reviewer meets the requirements of paragraph (4) and the reviewer, or at least 1 reviewer on the panel, meets the requirements described in paragraph (5); andCommentsClose CommentsPermalink
`(ii) prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as an independent medical reviewer merely on the basis of such affiliation if the affiliation is disclosed to the issuer and the enrollee (or authorized representative), and neither party objects; orCommentsClose CommentsPermalink
`(i) by a physician, a reviewer shall be a practicing physician (allopathic or osteopathic) of the same or similar specialty, as a physician who, acting within the appropriate scope of practice within the State in which the service is provided or rendered, typically treats the condition, makes the diagnosis, or provides the type of treatment under review; orCommentsClose CommentsPermalink
`(ii) by a non-physician health care professional, the reviewer, or at least 1 member of the review panel, shall be a practicing non-physician health care professional of the same or similar specialty as the non-physician health care professional who, acting within the appropriate scope of practice within the State in which the service is provided or rendered, typically treats the condition, makes the diagnosis, or provides the type of treatment under review.CommentsClose CommentsPermalink
`(B) PRACTICING DEFINED- For purposes of this paragraph, the term `practicing' means, with respect to an individual who is a physician or other health care professional, that the individual provides health care services to individual patients on average at least 2 days per week.CommentsClose CommentsPermalink
`(7) RELATED PARTY DEFINED- For purposes of this section, the term `related party' means, with respect to a denial of a claim under a coverage relating to an enrollee, any of the following:CommentsClose CommentsPermalink
`(A) ENROLLEE- The term `enrollee' means, with respect to health insurance coverage offered by a health insurance issuer, an individual enrolled with the issuer to receive such coverage.CommentsClose CommentsPermalink
`(B) HEALTH CARE PROFESSIONAL- The term `health care professional' means an individual who is licensed, accredited, or certified under State law to provide specified health care services and who is operating within the scope of such licensure, accreditation, or certification.CommentsClose CommentsPermalink
`SEC. 2799. ENFORCEMENT.
`(a) IN GENERAL- Subject to subsection (b), with respect to specific individual health insurance coverage the primary State for such coverage has sole jurisdiction to enforce the primary State's covered laws in the primary State and any secondary State.CommentsClose CommentsPermalink
`(b) SECONDARY STATE'S AUTHORITY- Nothing in subsection (a) shall be construed to affect the authority of a secondary State to enforce its laws as set forth in the exception specified in section 2796(b)(1).CommentsClose CommentsPermalink
`(c) COURT INTERPRETATION- In reviewing action initiated by the applicable secondary State authority, the court of competent jurisdiction shall apply the covered laws of the primary State.CommentsClose CommentsPermalink
`(d) NOTICE OF COMPLIANCE FAILURE- In the case of individual health insurance coverage offered in a secondary State that fails to comply with the covered laws of the primary State, the applicable State authority of the secondary State may notify the applicable State authority of the primary State.'.CommentsClose CommentsPermalink
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to individual health insurance coverage offered, issued, or sold after the date that is one year after the date of the enactment of this Act.CommentsClose CommentsPermalink
(2) ANNUAL REPORTS- The Comptroller General shall submit to Congress an annual report, after the end of each of the 5 years following the effective date of the amendment made by subsection (a), on the ongoing study conducted under paragraph (1).CommentsClose CommentsPermalink
SEC. 5. SEVERABILITY.
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