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Legislators are now focusing on other issues, including rate review. If enacted, the current rate review bill would: require a lengthy notice and public hearing timeline for all proposed rate increases; authorize the Healthcare Advocate and the Attorney General to be parties to any hearing; and broadly define "excessive" to include consideration of commissions, transfer of funds to a holding or parent company, the rate of return on assets or profitability, and a "reasonable" profit margin. The bill would also require that plans send written notice to insureds or subscribers of both the proposed rate and, later, the new rate. This bill would be effective July 1, 2011. The estimated cost of holding hearings for all proposed rate increases of 10 percent or more is $2 million, for a department that has an annual budget of $25 million. The bill was voted out of the Appropriations Committee nonetheless. If the bill were to be voted on today, it likely would pass. However, Insurance Commissioner Thomas B. Leonardi raised concerns about the potential cost and workload. The current law allows for the insurance commissioner to hold a rate hearing at his discretion. Leonardi said rates that aren't justified by actuarial science will be rejected. Senate Insurance Chair Joe Crisco called the bill a "work in progress" and said he and other legislators will be working with Leonardi.

KANSAS: Kansas has joined the growing list of states asking the federal Department of Health and Human Services (HHS) for a waiver of ACA's minimum loss ratio (MLR) requirements. If granted, the waiver would allow Kansas carriers until 2014 to fully comply with the 80 percent requirement under federal law. In a letter to HHS Secretary Kathleen Sebelius, Insurance Commissioner Sandy Praeger proposed a rule modification for the individual market to allow for a gradual implementation of the 80 percent requirement. The waiver would offer companies appropriate time to adjust their business practices and maximize opportunities for new companies to enter the Kansas market. The current MLR requirement for major medical coverage in the state's individual market is 55 percent.  Commissioner Praeger's letter proposes adjustments to the MLR standard at 70 percent in 2011, 73 percent in 2012, 76 percent in 2013 and 80 percent in 2014. To date, Maine is the only state to have received approval from HHS for a waiver. Guam and nine other states -- Florida, Georgia, Iowa, Kansas, Kentucky, Louisiana, North Dakota, Nevada, and New Hampshire -- have submitted waiver applications that are pending.

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MAINE: The House last week voted 76-72 to approve an ambitious health care reform bill introduced by the Republican majority. The bill would overhaul Maine's health insurance system and create a new one designed to foster more competition. If enacted, the bill would repeal Maine's standard benefit package and geographic access rules (Rule 750 and Rule 850) and expand the rating bands to open up the individual and small-group insurance market to greater competition. The changes in rating for individual health plans and small group plans would be phased in over four years, with a maximum rate differential of 1.5:1 to 5:1, based on age, for individual and small group health plans. The bill also would authorize the renewal of short-term health insurance policies for a period not to exceed 24 months, instead of the current 12-month limit. By 2014, the bill would allow Maine residents to purchase insurance across state lines in four New England states: Connecticut, Massachusetts, New Hampshire or Rhode Island. In addition, it would establish an individual market reinsurance pool to be funded through a covered lives assessment capped at $4 per month, per person. The bill is likely to pass the Senate as well, where Republicans hold a 20-14 majority.

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