S.B. 1670 78(R)    BILL ANALYSIS


S.B. 1670
By: Averitt
Insurance
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

Currently, health maintenance organizations are not permitted to use
cost-sharing measures, such as copayments, deductibles, and limitations on
costs. These measures could have the effect of lowering premium costs.
This situation has made it difficult for health maintenance organizations
to compete in the health benefits market against preferred provider
organizations.  S.B. 1670 authorizes a health maintenance organization to
use cost-sharing measures.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

SECTION 1. Amends Article 26.48, Insurance Code, by adding Subsection (c)
to provide that a contract offered by a health maintenance organization
under Subsection (a)(1) of this article is not subject to any restrictions
or limitations on cost sharing provisions in 42 U.S.C. Section 300e(b) and
any rules adopted thereunder.  

SECTION 2. Amends Article 20A.09(l), Insurance Code, to authorize a health
maintenance organization that offers a basic health care plan to impose
limitations as to time and cost except where prohibited by state or
federal law.  

SECTION 3. Amends Article 26.38(b), Insurance Code, to provide that a
health maintenance organization that participates in a purchasing
cooperative that meets certain specifications is not subject to any
restrictions or limitations on cost sharing provisions in 42 U.S.C.
Section 300e(b) and any rules adopted thereunder.  

SECTION 4. Effective date: upon passage or September 1, 2003. 

EFFECTIVE DATE

September 1, 2003.