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SPONSOR: |
Rawson |
DATE TYPED: |
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HB |
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SHORT TITLE: |
Notice of Health Insurance Premium Increase |
SB |
588 |
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ANALYST: |
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APPROPRIATION
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Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI |
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Responses
Received From
Attorney
General’s Office (AGO)
Human
Services Department (HSD)
Retiree
Health Care Authority (RHCA)
Public
School Insurance Authority (PSIA)
General
Services Department (GSD)
Public
Regulation Commission (PRC)
Health
Policy Commission (HPC)
SUMMARY
Synopsis
of Bill
Senate Bill 588 requires a health insurance
policyholder to be given 60 days written notice prior to a rate increase.
Significant
Issues
Current law requires approval by the
superintendent of insurance of polices and premiums before they may be issued
by an insurance company. This approval
includes approval of those contract provisions relating to notice to the
policyholder of premium increases. This
bill would remove this discretionary authority from the superintendent of
insurance and replace that discretionary authority with a statutory standard.
Most health insurers give 30 days written notice
of rate increases. There is no current
requirement in law, but most health insurance policies or contracts contain
provisions requiring 30 days notice.
With health insurance rate increases running in
the 20-40% level, proponents believe that policyholders need more time to
respond to written notice of premium rate increases. 30 days does not give an individual or an
employer much time to shop for alternative coverage.
ADMINISTRATIVE
IMPLICATIONS
SB
588 will require policy form filings with the PRC’s Insurance Division. This will be a one time filing and can be
handled with existing staff.
OTHER SUBSTANTIVE ISSUES
SB588 offers health insurance policyholders the
opportunity to plan and prepare financially for the increases in their
premiums. Cost is the number one barrier
between New Mexicans and adequate health insurance coverage, and while SB588
does not address that issue directly, the bill would provide many New Mexicans
with at least a small measure of security.