RS C.S.H.B. 263 75(R) BILL ANALYSIS INSURANCE C.S.H.B. 263 By: Van de Putte 3-6-97 Committee Report (Substituted) BACKGROUND Medical science is progressing at very rapid pace, it is difficult to pick up a newspaper without reading about the discovery of a new genetic predisposition to some catastrophic disease. Diabetes, breast cancer, Huntington's Disease, Alzheimers, and many other illnesses are being linked each day to the human DNA. DNA is the "map" that is used by nature to define physical individualities. However, the presence of a type of gene in the DNA does not guarantee, or has not been found to guarantee the resulting condition. Because of the uncertainty of this science, and to maintain the ability of individuals to participate in studies of this kind without fear of losing their health insurability, the federal government in the Kennedy-Kassenbaum legislation has excluded genetic predisposition from being considered as a pre-existing condition. However, state regulated health insurance companies are not regulated by the federal legislation. PURPOSE C.S.H.B. 263 prohibits discrimination in the determination of eligibility, premiums, or coverage by state regulated health insurers based on the use of genetic testing. RULEMAKING AUTHORITY The committee has determined that rule making authority exists in Section 1 of the bill (Section 5, Art. 21.73, Insurance Code). SECTION BY SECTION ANALYSIS SECTION 1. - Amends Subchapter E, Chapter 21 of the Insurance Code by adding Article 21.73. ART. 21.73 USE OF GENETIC TESTING INFORMATION BY INSURERS Sec. 1. - DEFINITIONS: Defines "DNA," "Genetic Information," "Genetic Test," "Health Benefit Plan," and "RNA." A genetic test refers to a laboratory test of RNA, DNA or chromosomes to identify alterations or mutations that are a predisposition to a disease or disorder. This term does not relate to a routine exam or test, a chemical, blood or urine analysis, drug or HIV tests. Sec 2. - SCOPE OF BENEFIT (a) A health benefit plan is further defined as any medical plan that provides benefits to treat a health condition, accident or sickness to individuals, groups, or franchises, as an insurance company, group hospital service corporation, fraternal benefit society, stipulated premium insurance company, a health maintenance organization, ERISA as permitted by law, a MEWA as permitted by law, or non-profit health corporations, or other entity providing like benefits not regulated under the Insurance Code. (b) This article excludes plans for specified disease coverage, accidental death or dismemberment, wage recovery insurance, or supplemental liability coverage, medicare supplement policy, workers compensation, motor vehicle medical insurance payments, or a long term health policy. Sec. 3. - USE OF GENETIC INFORMATION. (a) A health benefit plan issuer may not use genetic information or a genetic test to reject, deny, limit, cancel, refuse to renew, or otherwise affect eligibility for coverage under a health benefit plan. An insurer may not require a person covered or applying for coverage under a health plan to release information regarding genetic testing upon themselves or a member of the applicant's family. (b) If a benefit plan issuer requests that an applicant submit to a genetic test in connection with obtaining coverage, the issuer must first obtain written permission from the applicant. Permission must include a description of the particular test or tests, a general statement of the significance and application of the results, a statement about the confidentiality restrictions of the test, and a statement that the applicant has the right to know the results of the test and that the insurer must disclose the results. (c) An insurer may not use a genetic test as an inducement for purchasing further coverage. Sec 4. - INFORMATION CONFIDENTIAL; EXCEPTIONS. (a) a person or entity who holds genetic information about an individual may not be compelled to disclose that information unless specifically authorized. (b) Procedure for the authorization of disclosure of genetic information. (c) Genetic information may be disclosed without permission under the following circumstances: when authorized under a state or federal criminal law, when mandated by a specific court order, authorized as a means to establish paternity, identification of a decedent, or medical diagnosis. (d) Limits redisclosure of genetic information to actuarial or research studies, TDI for enforcement purposes, and for risk assessment in merger or sale of an insurance company and provides for the timely destruction of those records. (e) A redisclosure of information is limited to only that information reasonably needed for those specific purposes. Sec. 5. - RULES. The commissioner shall adopt rules as necessary to enforce this article. Sec. 6. - PENALTIES. The commissioner may issue a cease and desist order if a health benefit plan issuer refuses or fails to comply with this article. SECTION 2. - This article applies to policies issued or renewed on or after January 1, 1998. SECTION 3. - Act takes effect on September 1, 1997 SECTION 4. - Emergency clause. COMPARISON OF H.B. 263 AND C.S.H.B. 263 C.S.H.B. 263 adopts technical changes that clarify the original intention of this measure to declare genetic information private and to limit its use in the determination of coverage and eligibility for health insurance. The definitions section was altered to specify DNA, RNA, and chromosomes in the definition of genetic information, a health benefit plan was updated to include the definition of non-profit health corporations, and other health arrangements not regulated by the Insurance Code. The bill also removes application of Chapter 21.21 of the Insurance Code and provides the Commissioner of Insurance with enforcement of this Chapter.