By: Bailey H.B. No. 140
73R1430 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to basic health care coverage for certain persons.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter G, Chapter 3, Insurance Code, is
1-5 amended by adding Article 3.79-1 to read as follows:
1-6 Art. 3.79-1. BASIC HEALTH CARE COVERAGE
1-7 Sec. 1. PURPOSE. The purposes of this article are to:
1-8 (1) make available to all residents of this state a
1-9 minimum basic health care plan;
1-10 (2) make that plan portable and not tied to
1-11 employment; and
1-12 (3) institute a means by which affordable and
1-13 available health care can be made available to the public.
1-14 Sec. 2. DEFINITIONS. In this article:
1-15 (1) "Basic health care coverage" means the coverage
1-16 provided by Section 4 of this article.
1-17 (2) "Health insurer" means a legal entity that is
1-18 authorized to engage in the business of insurance in this state and
1-19 that delivers or issues for delivery in this state a group or
1-20 individual policy or contract of health insurance. The term
1-21 includes a group hospital service corporation under Chapter 20 of
1-22 this code or a health maintenance organization under the Texas
1-23 Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
1-24 Insurance Code).
2-1 Sec. 3. BASIC HEALTH CARE COVERAGE REQUIRED; CONDITIONS.
2-2 (a) Except as otherwise provided by this article, each health
2-3 insurer, as a condition of doing business in this state, shall
2-4 provide basic health care coverage to each eligible person who
2-5 submits an application for coverage to that insurer. A person is
2-6 eligible under this subsection if the person has been a resident of
2-7 this state for at least six consecutive months preceding the
2-8 beginning of the coverage year.
2-9 (b) The basic health care coverage provided under this
2-10 article must:
2-11 (1) include all coverages required by this article and
2-12 by board rules;
2-13 (2) be sold at the premium or charges established by
2-14 the board under this article; and
2-15 (3) be provided on a form prescribed by the board
2-16 under this article.
2-17 (c) A health insurer may not sell to a person in this state
2-18 any health insurance coverage other than basic health care coverage
2-19 unless the person to whom the health insurance coverage is to be
2-20 sold is covered by basic health care coverage as provided by this
2-21 article.
2-22 Sec. 4. BASIC HEALTH CARE COVERAGE. (a) Basic health care
2-23 coverage consists of insurance coverage for:
2-24 (1) inpatient hospital services;
2-25 (2) emergency and outpatient services at licensed
2-26 hospitals and outpatient facilities;
2-27 (3) immunizations;
3-1 (4) diagnostic physician services, including second
3-2 opinions;
3-3 (5) x-ray and laboratory tests;
3-4 (6) medical or surgical treatment of illness or injury
3-5 except as provided by Subsection (d) of this section;
3-6 (7) specific procedures designed for early
3-7 identification of serious adult health problems;
3-8 (8) physical, occupational, and speech therapy;
3-9 (9) prescription drugs;
3-10 (10) prenatal and obstetrical care;
3-11 (11) "well-baby" and "well-child" care;
3-12 (12) office visits to a doctor;
3-13 (13) one routine physical examination per calendar
3-14 year; and
3-15 (14) any other medical coverages determined by the
3-16 board, after notice and hearing, to be basic necessary coverages.
3-17 (b) Basic health care coverage does not include insurance
3-18 coverage for:
3-19 (1) an experimental procedure that was developed
3-20 within the three-year period preceding the beginning of the policy
3-21 year and that has an average cost of $100,000 or more;
3-22 (2) mandatory benefits and coverages required under
3-23 this code or other insurance laws of this state other than
3-24 mandatory coverages for mammography, maternity benefits, and
3-25 newborn care;
3-26 (3) cosmetic surgery;
3-27 (4) treatment for chronic fatigue;
4-1 (5) obesity remediation;
4-2 (6) organ transplants;
4-3 (7) psychiatric and psychological care; and
4-4 (8) any procedure or treatment that fails to prolong
4-5 life in a meaningful way.
4-6 (c) The board by rule may adopt uniform requirements for the
4-7 basic health care coverage, including requirements relating to:
4-8 (1) nonduplication of coverage;
4-9 (2) primary care gatekeepers;
4-10 (3) preadmission certification;
4-11 (4) mandatory second opinions in circumstances defined
4-12 by the board;
4-13 (5) pre-authorization for certain specified services;
4-14 (6) discharge planning for hospital care; and
4-15 (7) a system of copayments and deductibles.
4-16 (d) The board by rule may place reasonable limits on the
4-17 amounts and types of benefits required by Subsection (a) of this
4-18 section. Limits imposed under this subsection may not prevent or
4-19 hinder provision of basic health care services.
4-20 (e) A health insurer may not include in basic health care
4-21 coverage any coverage that is not specifically authorized by this
4-22 article or board rule.
4-23 Sec. 5. COPAYMENTS AND COST CONTAINMENT PROVISIONS. (a)
4-24 Copayments adopted by the board for basic health care coverage may
4-25 not exceed 20 percent of the total cost of the treatment or
4-26 procedure. A deductible may not exceed $250 per calendar year.
4-27 The board may not impose a copayment on:
5-1 (1) prenatal care;
5-2 (2) immunizations;
5-3 (3) the annual routine physical examination; and
5-4 (4) specific procedures designed for early
5-5 identification of serious adult health problems.
5-6 (b) The board may adopt additional cost containment features
5-7 and coverages for the basic health care coverage as it considers
5-8 necessary to provide reasonable rates and coverages for basic
5-9 health care coverage and to meet basic health care needs.
5-10 Sec. 6. RATES. (a) The board shall adopt premium rates to
5-11 be charged for basic health care coverage.
5-12 (b) The board may employ clerical personnel, experts, and
5-13 other assistants, and may incur other expenses, as necessary to
5-14 implement this section.
5-15 (c) At least once a year, the board shall determine the
5-16 losses under basic health care coverage in this state for the
5-17 preceding calendar year and shall maintain a record of those
5-18 losses. The board shall collect information regarding basic health
5-19 care coverage losses that enables the board to classify those
5-20 losses, the causes of those losses, and the amount of premiums
5-21 collected for each class of risks to assist the board in:
5-22 (1) determining equitable insurance rates;
5-23 (2) determining methods for reducing basic health care
5-24 coverage losses; and
5-25 (3) reducing basic health care coverage rates in this
5-26 state.
5-27 (d) The board may designate one or more organizations or
6-1 agencies to gather, audit, and compile loss experience and other
6-2 information necessary to assist the board in adopting premium rates
6-3 under this section.
6-4 (e) The cost incurred by the board under this section shall
6-5 be charged to the health insurers whose premium rates are adopted
6-6 under this section. The share of the cost charged to each health
6-7 insurer shall be based on the ratio between the total amount of
6-8 premiums collected for basic health care coverage by all health
6-9 insurers in this state during the preceding calendar year and the
6-10 total amount of premiums collected by the health insurer for basic
6-11 health care coverage in this state during the preceding calendar
6-12 year. The total amount of premiums collected by each insurer shall
6-13 be determined from the insurer's annual report to the board.
6-14 (f) The board shall conduct an annual hearing for review of
6-15 the premium rates charged for basic health care coverage, the
6-16 reports and other information relating to basic health care
6-17 coverage provided to or collected by the board, and the adoption of
6-18 premium rates for basic health care coverage for the next calendar
6-19 year. The board may modify any rate adopted by it at any time.
6-20 (g) Before a health insurer may charge an increased premium
6-21 rate for basic health care coverage to a policyholder, the insurer
6-22 must give written notice of the rate increase to the policyholder
6-23 not later than the 90th day before the date on which the rate
6-24 increase is scheduled to take effect.
6-25 (h) In determining premium rates, the board shall give
6-26 consideration to past and prospective loss and expense experience
6-27 in this state, a reasonable margin for underwriting profit and
7-1 contingencies, investment income, and dividends or savings allowed
7-2 or returned by insurers to their policyholders or members. Risks
7-3 may be grouped by classifications, rating schedules, or any other
7-4 reasonable method. Those methods may measure any difference among
7-5 risks that can be demonstrated to have a probable effect on losses
7-6 or expenses.
7-7 (i) Rates adopted under this section must be reasonable and
7-8 may not be excessive, inadequate, or unfairly discriminatory. A
7-9 rate is excessive only if it is unreasonably high for the insurance
7-10 coverage provided. A rate is inadequate only if it is unreasonably
7-11 low for the insurance coverage provided and is insufficient to
7-12 sustain projected losses and expenses.
7-13 Sec. 7. POLICY OR EVIDENCE OF COVERAGE FORMS. (a) The
7-14 board shall prescribe a standard and uniform policy form and a
7-15 standard and uniform evidence of coverage form to be used by health
7-16 insurers writing the basic health care coverage required by this
7-17 article.
7-18 (b) A health insurer may not use any form other than that
7-19 prescribed by the board under this section to write basic health
7-20 care coverage.
7-21 (c) A health insurer that uses a policy or evidence of
7-22 coverage form that is not in compliance with this section is
7-23 subject to sanctions as provided by Section 7, Article 1.10, of
7-24 this code.
7-25 Sec. 8. SUPPLEMENTAL POLICIES AND COVERAGES. A health
7-26 insurer that provides the basic health care coverage to a person
7-27 under this article is not prohibited from providing any
8-1 supplemental coverages under separate supplemental policy forms
8-2 approved by the board as provided by Article 3.42, Insurance Code,
8-3 or under separate evidences of coverage under Section 9, Texas
8-4 Health Maintenance Organization Act (Article 20A.09, Vernon's Texas
8-5 Insurance Code).
8-6 Sec. 9. CANCELLATION AND NONRENEWAL. (a) Basic health care
8-7 coverage provided by an employer to an employee or to members of an
8-8 employee's family may not be cancelled by a health insurer on
8-9 termination of the employment relationship.
8-10 (b) Basic health care coverage may be cancelled or not
8-11 renewed only on 10 days written notice by the health insurer to the
8-12 insured and only:
8-13 (1) for nonpayment of a premium when due;
8-14 (2) for fraud in obtaining coverage; or
8-15 (3) if the health insurer is placed in conservatorship
8-16 or receivership and the cancellation or nonrenewal is approved or
8-17 directed by the conservator or receiver.
8-18 Sec. 10. PRE-EXISTING CONDITIONS. (a) Except as provided
8-19 by Subsection (b) of this section, basic health care coverage may
8-20 not include any limitations on the person covered.
8-21 (b) The basic health care coverage shall include a one-year
8-22 limitation on pre-existing conditions of an insured for a person
8-23 who has not been covered by health insurance for a period of one
8-24 year or longer.
8-25 Sec. 11. REINSURANCE AND STOP-LOSS COVERAGE. An insurer
8-26 authorized to do business in this state may not reinsure or provide
8-27 stop-loss coverage for any type of health care benefits program or
9-1 plan that does not provide basic health care coverage as part of
9-2 that program or plan.
9-3 Sec. 12. RULES. The board may adopt rules as necessary to
9-4 implement this article.
9-5 SECTION 2. (a) This Act takes effect September 1, 1993, and
9-6 applies only to a health insurance policy, contract, or evidence of
9-7 coverage that is delivered, issued for delivery, or renewed on or
9-8 after July 1, 1994.
9-9 (b) The State Board of Insurance shall develop and implement
9-10 a plan to assure the orderly implementation of Article 3.79-1,
9-11 Insurance Code, as added by this Act.
9-12 SECTION 3. The importance of this legislation and the
9-13 crowded condition of the calendars in both houses create an
9-14 emergency and an imperative public necessity that the
9-15 constitutional rule requiring bills to be read on three several
9-16 days in each house be suspended, and this rule is hereby suspended.