6. High Risk Pool

Georgia passed legislation creating a High Risk Pool in 1989!  The pool has never been funded and therefor is inactive.  Other states have implemented high risk pools with some byt little success (see kaiser Family Foundation Report).  Only about 200,000 persons are covered under state high risk pools.  Funding has always been a major problem. The Georgia Health Reform Working Group has a new and unique idea that can work for Georgia. Below are diecrt links to other southern states who have high risk pools with varying levels of success.  Federal law requires each state to have an opportunity for previously insured to get coverage after termination from a group plan.  Georgia has an assignment pool that satisfies that requirment.  Therefore, Georgia can keep the assignment pool in place and create a High Risk Pool the focuses on the problem areas of the uninsured working for small employers.
 
                                                      Other State With High Risk Pools
 
OVERVIEW: If other states can do it, so can Georgia - and do it better! The establishment of a Georgia specific Personal Responsibility High Risk Pool is a complex and difficult concept that needs colaboration and concensus.  The goal is to have a voluntary system where insurers will want to participate rather than be legislatively forced to participation. The process of the other 2012 Georgia reforms have received input and ideas from all stakeholders.  The ideas contained in the DRAFT below were in part developed with input from insurers. However, more discussions is needed and more analysis is required for building a workable personal responsibility high risk pool, developing allowed coverages, outlining insurer responsibilities, and identifying impact on individual and small group pricing and underwriting.   The ways to fund the high risk pool have always been problematic.  There are new approaches and ideas, but these need more vetting with state legislators, insurers, and federal agencies.  Therefore, this DRAFT is presented for informational purposes but no filed High Risk Pool legislation is expected until broader discussions can take place for 2013.
 
Currently under PPACA Georgians have access to a temporary federal high risk pool.  Georgia currently has less than 1,000 people enrolled in that program.  Nationally only about 30,000 persons are covered under the program. The Supreme Court ruling on PPACA will be rendered by July 2012, Georgia can be prepared with better solution and be ready with legislation for the 2013 General Assembly.
 
  TITLE 33 -- INSURANCE...Chapter 44 –
Personal Responsibility HIGH RISK HEALTH INSURANCE PLAN
 
It is the intent of the Georgia General Assembly to create the Georgia Health Underwriting Authority to review qualifying applicants for acceptance into a personal responsibility high risk pool that stabilizes premiums for the small group and provides access to coverage for otherwise uninsurable individuals.  Insurers participation with Georgia Health Underwriting Authority and the Personal Responsibility High Risk Pool is voluntary. 
 

33-44-1  "Personal Responsibility High Risk Health Insurance plan"

This chapter shall be known and may be cited as the "Personal Responsibility High Risk Health Insurance Plan."
 

33-44-2  Definitions

As used in this Chapter:

(1) “Qualifying Eligible Member” means a person who as a part of a group application for a group 10 or fewer employees for Comprehensive major Medical coverage has a medical condition or history that causes the group plan to be rated at a premium level of at least 25% or higher than otherwise standard rates.

(2) “Qualifying Eligible Individual” means a person who has applied to a Georgia licensed insurer for an individual Comprehensive Major Medical policy and has been rejected for coverage, unable to agree on alternatives that allow for a premium of less than 25% over standard premium rates, include contract benefit limits of 25% or more of the policy value, or any combination thereof.

 (3) "Insurer" means any insurance company authorized to transact accident and sickness insurance business in this state, any nonprofit medical service corporation, any nonprofit hospital service corporation, any health care plan, and any health maintenance organization authorized to transact business in this state and eligible to voluntarily contract with the Georgia Health Underwriting Authority.

(4) "Comprehensive Major Medical" means that type of insurance as defined in Code Section 33-1-?? but does not include short-term disability, fixed indemnity, limited benefit, or credit insurance coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
 

33-44-3  Establishment of the Georgia Health Underwriting Authority

(a)          The “Georgia Health Underwriting Authority” shall be established as a public/private partnership to establish, operate and manage the Georgia Health Underwriting Authority and the Personal Responsibility High Risk Pool.  For public administration and public management responsibilities the Georgia Health Underwriting Authority is assigned to the Department of Insurance.

 

33-44-4  Contracting with Insurers

(a)          Nothing in this act requires insurers to contract with the Georgia Health Underwriting Authority.

 

(b)          The Georgia Health Underwriting Authority is authorized to contract with Georgia authorized insurers offering fully insured individual and group Comprehensive Major Medical policies for the review of applications to the Personal Responsibility High Risk Pool.

 

(c)          Access to the Personal Responsibility High Risk Pool is limited to those insurers contracting with the Georgia Health Underwriting Authority for reviewing both qualifying eligible members and qualifying eligible individual applications.

(d)          Insurers can terminate the agreement with the Georgia Health Underwriting Authority with at least a 180 day notification in writing to the Georgia Health Underwriting Authority.

 

(e)          The Georgia Health Underwriting Authority can immediately suspend or terminate the agreement with any insurer if the insurer fails to meet participation standards as established by the Georgia Health Underwriting Authority. 

 

33-44-5  Eligibility for Personal Responsibility High Risk Pool

(a)          If an applicant is determined by the Georgia Health Underwriting Authority to be uninsurable they will automatically qualify for the Personal Responsibility High Risk Pool, if the pool is accepting new applicants and can then select among the plans offered and the premiums then charged by the Personal Responsibility High Risk Pool.

 

(b)          If the applicant is determined by the Georgia Health Underwriting Authority to be uninsurable and the Personal Responsibility High Risk Pool is not accepting new applicants, the applicant can choose to be placed into a queue for future acceptance. If the pool opens to new entrants, applicants will be offered coverage in the order they were placed in the queue. 

 

(c)          If a qualifying eligible member from a group of ten or fewer employees is determined by the Georgia Health Underwriting Authority to not be uninsurable, the Georgia Health Underwriting Authority may assist the group in securing coverage with another insurer at rates appropriate to the health status and history of the group.

 

(d)          If a qualifying eligible individual is determined by the Georgia Health Underwriting Authority to not be uninsurable, the Georgia Health Underwriting Authority may assist the individual in securing coverage at rates appropriate to the health status and history of the qualifying individual.

 

(e)          Assisting qualifying eligible individuals with securing coverage may include at least a twenty-five percent premium increase over the insurer’s standard rates, include coverage limitations equal to a twenty-five percent increase over the insurer’s standard rates, or a combination thereof.
 
33-44-6  Application to the Georgia Health Underwriting Authority

(a)          Participating insurers can request a review by the Georgia Health Underwriting Authority for acceptance of qualifying eligible members or qualifying eligible individuals into the Personal Responsibility High Risk Pool.

(b)          If a review by the Georgia Health Underwriting Authority is requested, the participating insurers shall submit to the Georgia Health Underwriting Authority all underwriting information on the qualifying eligible member or qualifying eligible individual used by the insurer to underwrite the applicant.

(c)          Qualifying eligible individuals may make a direct request for a review by the Georgia Health Underwriting Authority for potential acceptance into the Personal Responsibility High Risk Pool.

(d)          The Georgia Health Underwriting Authority can limit the acceptance of otherwise qualifying eligible members or qualifying eligible individuals into the Personal Responsibility High Risk Pool if expected future administrative and claim costs of the pool exceed the expected premium revenues plus any expected state, federal, or private pool subsidies.

33-44-7  Insurer Obligations

 

(a)          Insurers voluntarily contracting with the Georgia Health Underwriting Authority must agree to participate for both qualifying eligible members and qualifying eligible individual applicants.

 

(b)          Participating insurers must accept the determinations by the Georgia Health Underwriting Authority of uninsurable and not uninsurable decisions for eligible qualified members and qualifying eligible individuals. 

 

(c)          Participating insurers submitting qualified eligible members who are determined to be uninsurable and accepted into the Personal Responsibility High Risk Pool can exclude those individuals from any otherwise group requirements for underwriting, acceptance, or renewal of the group policy.

 

(d)          Participating insurers are not obligated to offer coverage to any group if a qualified eligible member determined by the Georgia Health Underwriting Authority to not be uninsurable, except as otherwise provided under Georgia law.

 

(e)          Participating insurers submitting qualifying eligible individuals, who are determined to be uninsurable and are accepted into the Personal Responsibility High Risk Pool, will no longer be obligated to offer coverage to that applicant.

 

(f)          Participating insurers, who decline coverage or unable to offer coverage at less than 25% over standard rates, with reduced coverage of 25% or more, or a combination thereof for qualifying eligible individuals, agree to accept up to an equal number of qualified eligible individuals determined by the Georgia Health Underwriting Authority to not be uninsurable.

 

33-44-8  Uninsured Underwriting Standards

(a)          Nothing in this Act shall impose or impinge on an insurer’s ability to set or use individual or group underwriting standards as defined by each insurer and in compliance with other standards in the Georgia Code.

(b)          For employer groups previous uninsured, the Georgia Health Underwriting Authority shall establish standards for qualifying eligible members in groups of 10 or fewer employees based on generally accepted underwriting practices and qualifying eligible members must:

(1)  have been uninsured for a period of at least six months, except for applications allowed under subsection (c);

(2)  have a medical condition or history that causes the group Comprehensive Major Medical coverage to be rated at a premium level of at least 25% or higher than otherwise standard rates; and

(3)   meet other standards as set by the Georgia Health Underwriting Authority.

(c)    For employer groups insured renewing with the same insurer, at the first annual policy anniversary for each group of 10 or fewer employees, insurers may at their option apply to the Georgia Health Underwriting Authority for a qualifying eligible member(s) and/or associated family member(s) to be considered for the Personal Responsibility High Risk Pool. 

(d)          The Georgia Health Underwriting Authority shall establish standards for qualifying eligible individuals for the Personal Responsibility High Risk Pool who are uninsurable based upon generally accepted underwriting practices and standards and qualifying eligible individuals must:  

(1)  have been uninsured for a period of at least six months, and

(2)  have been rejected by an insurer for individual Comprehensive Major Medical coverage, or have been unable to purchase an individual Comprehensive Major Medical plan at less than 25% additional charge over standard premiums or have been unable to purchase an individual Comprehensive Major Medical plan without a major coverage exclusion of more than 12 months, and

(3)  Must meet other standards as set by the Georgia Health Underwriting Authority.

 

33-44-9 Funding for Georgia Health Underwriting Authority

(a)          The Georgia Health Underwriting Authority shall operate as a self-sufficient entity deriving operating funds from:
     (1)   membership fees charged contracting insurers;

(2)   processing fees charged contracting insurers based upon time and expense required to review qualifying eligible member applications. The Georgia Health Underwriting Authority can refund in whole or in part fee paid by insurers if the applicant is determined to be uninsurable;

(3)   processing fees charged contracting insurers based upon the time and expense required to review qualifying eligible individual applications.  The Georgia Heath Underwriting Authority can refund in whole or in part fees paid by insurers if the applicant is determined to be uninsurable.

(4)  processing fees to be paid by qualifying eligible members who directly request a review by the Georgia Health Underwriting Authority. The Georgia Underwriting Authority can refund in whole or in part fees paid by qualified individuals or members if the applicant is determined to be uninsurable.

(5)  processing fees to be paid by qualifying eligible individuals who directly request a review by the Georgia Health Underwriting Authority. The Georgia Underwriting Authority can refund in whole or in part fees paid by qualified individuals if the applicant is determined to be uninsurable.

(6)      The Georgia Health Underwriting Authority is authorized to request state funding for initial organization and operation expenses of the Georgia Health Underwriting Authority. 

(7)      The Georgia Health Underwriting Authority is authorized to seek federal or private grants to support the establishment or operations of the Authority and the Personal Responsibility High Risk pool.

(8)      Other revenue opportunities as approved by the authorities governing board.

33-47-10  Personal Responsibility High Risk Pool Eligibility Requirements

(a) Any individual person who has been a resident of this state for at least twelve months prior to the application to an insurer shall be eligible for review by the Georgia Health Underwriting Authority for coverage in the Personal Responsibility High Risk Pool, except the following:

(1) Any person who is eligible for health care benefits under Article 7 of Chapter 4 of Title 49, the "Georgia Medical Assistance Act of 1977";

(2) Any person who is eligible for another state or federal plan of coverage or program, including but not limited to Medicare, Tri-Care, or Veterans Health Care; 

(3) Inmates of public institutions and persons eligible for public programs;

(4) Any person who is eligible for self-insured employer coverage;  

(5) Any person who terminated coverage in the Personal Responsibility High Risk Pool within the previous 12 months;

(6) Any person on whose behalf the Personal Responsibility High Risk Pool has previously paid out $1,000,000.00 in benefits; and

(b) Any person who ceases to meet the Personal Responsibility High Risk Pool eligibility requirements of subsection (a) may be terminated at the end of the earlier of the policy period or enrollment in other coverage.

(c) Personal Responsibility High Risk Pool coverage cannot be rescinded unless the application was approved due to fraud or material misrepresentation.
 

33-47-11  Personal Responsibility High Risk Pool Operations

(a)   The Georgia Health Underwriting Authority shall contract with a Georgia licensed insurer or administrator to provide coverage under the Personal Responsibility High Risk Pool.

 

(b)   The Personal Responsibility High Risk Pool shall accept applications only through the Georgia Health Underwriting Authority. 

 

(c)          The Personal Responsibility High Risk Pool shall offer at least three options including at least a comprehensive major medical plan, a high deductible health plan as defined under Section 223 of the Internal Revenue Code, and a another choice that may be more limited in nature, but all plans must also qualify as creditable coverage.  Such choices shall be known as the "Personal Responsibility High Risk Pool Options".  With the payment of timely premiums, the policies are guaranteed renewable until the individual is eligible for group coverage or until Medicare or Medicaid eligibility.

 

33-47-12  Georgia Health Underwriting Authority Governance

 

(a)          The board of directors of the Georgia Health Underwriting Authority is to be composed of ten members appointed as provided in this subsection and the Commissioner of Insurance, who shall serve as an ex officio member.

 

(b)          The Commissioner shall appoint, with the approval of the Governor, one member who shall represent domestic insurers licensed to transact accident and sickness insurance in this state, one member who shall represent a domestic nonprofit health care service plan, and one member who shall be a hospital administrator.

 

(c)          The Governor shall appoint two members who shall be consumers, one member who shall represent employers who have more than 25 employees, one member who shall represent employers who have less than 25 employees, one member who shall represent health maintenance organizations, one member who shall be a licensed physician, and one member who shall either be a representative of the Department of Public Health or a representative of a government agency involved directly or indirectly in state-wide health planning.

 

(d)          All members of the board shall serve for terms of six years, except the Commissioner whose term shall be concurrent with his term of office as Commissioner. The board shall select one of its members to serve as chairman. The members of the board of directors shall be required to take and subscribe before the Governor an oath to discharge the duties of their office faithfully and impartially. This oath shall be in addition to the oath required of all civil officers. The members of the board of directors shall not be entitled to compensation for their services but shall be entitled to reimbursement for their actual travel and expenses necessarily incurred in the performance of their duties when funds are available for this purpose.

 

(e)          The board of directors shall establish a method of operation and administration for the Georgia Health Underwriting Authority and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable operation and administration of the Personal Responsibility High Risk Pool.

 

(f)          The method of operation and any amendments thereto shall be submitted to the Commissioner for his evaluation and he shall make recommendations to the board of directors if he feels revisions are required to assure the fair, reasonable, and equitable operation and administration of the plan.

 

(g)          The Commissioner shall, after notice and hearing, approve the method of operation, provided such is determined to be suitable to assure the fair, reasonable, and equitable operation and administration of the plan. The method of operation shall become effective upon approval in writing by the Commissioner consistent with the date on which the coverage under this chapter may be made available.

 

(h)          If the plan fails to submit a suitable method of operation within 180 days after the appointment of the board of directors or at any time thereafter fails to submit suitable amendments to the plan, the Commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this Code section. Such rules shall continue in force until modified by the Commissioner or superseded by a method of operation submitted by the board and approved by the Commissioner.

(i) In the method of operation the directors shall:

(1) Establish procedures for the handling and accounting of assets and moneys of the plan;

(2) Select a chief executive offer who shall staff, manage, and operate the Georgia Health Underwriting Authority and the Personal Responsibility High Risk Pool.

(2) Select an administrator, who shall be a qualified administrator or insurer licensed to transact accident and sickness insurance in this state, in accordance with Code Section 33-44-5;

(3) Establish procedures for filling vacancies on the board of directors;

(4) Establish coverages for the payment of benefits that include incentives for cost containment and features designed to encourage, support and reinforce personal responsibility in seeking healthcare, compliance with provider treatment plans, adherence to medication regimens, informed medical choices, and promotion of healthy lifestyle choices.  

(5) Develop and implement a program to publicize the existence of the plan, the eligibility requirements, and the procedures for enrollment and to maintain public awareness of the plan.

(j) The Personal Responsibility High Risk Pool shall have the general powers and authority granted under the laws of this state to insurance companies licensed to transact accident and sickness insurance as defined under Code Section 33-44-2 and, in addition thereto, the specific authority to:

(1) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this chapter, including the authority to enter into contracts with similar funds or pools of other states for the joint performance of common administrative functions or with persons or other organizations for the performance of administrative functions. The plan shall have the authority to establish reciprocal agreements with similar pools or funds of other states and may agree to waive or change the residency requirement with respect to persons who become residents of this state and were covered under a similar pool or fund with which the plan had established a reciprocal agreement;

(2) Bring or defend actions;

(3) Take such legal action as necessary to avoid the payment of improper claims against the plan or the coverage provided by or through the plan;

(4) Establish appropriate rates; rate schedules; rate adjustments; expense allowances; agents' referral fees; claim reserve formulas; cost containment features, including, but not limited to, second opinions for surgeries, review and auditing of claims, precertification of hospital admissions and surgeries, and preferred providers; and any other actuarial functions appropriate to the operation of the plan. Rates and rate schedules may be adjusted for appropriate risk factors such as age and area variation in claim cost and shall take into consideration appropriate risk factors in accordance with established actuarial and underwriting practices;

(5) Issue policies or certificates of insurance coverage in accordance with the requirements of this chapter; and

(6) Establish rules, conditions, and procedures for reinsurance of risks of the plan.


33-44-13  Personal Responsibility High Risk Pool Financial Soundness

(a) Following the close of each fiscal year, the personal responsibility high risk pool administrator shall determine the net premiums, which shall be total premiums less administrative expense allowances, the plan expenses of administration, and the incurred losses for the year, taking into account investment income and other appropriate gains and losses, and shall report such information to the board of directors.

(b) The board of directors may revise the schedule of benefits and cost containment features provided under the plan as necessary to ensure that the plan maintains adequate resources for continued operation.

(c)  Coverage for pre-existing conditions shall exclude all charges or expenses incurred during the first six months in excess of $25,000 following the effective date of coverage and charges or expenses incurred which are in excess of $50,000.00 per insured individual during the seventh through twelfth months following the effective date of coverage as to any condition which during the six-month period immediately preceding the effective date of coverage:

(1) had manifested itself in such a manner as would cause an ordinarily prudent person to seek diagnosis, care, or treatment; or

(2) For which medical advice, care, or treatment was recommended or received.

 (d)(1) Benefits otherwise payable under the personal responsibility high risk pool coverage shall be reduced by all amounts paid or payable through any other accident and sickness insurance or insurance arrangement and by all hospital and medical expense benefits paid or payable under any workers' compensation coverage, automobile medical payment, or liability insurance, whether provided on the basis of fault or no-fault, and by any hospital or medical benefits paid or payable under or provided pursuant to any state or federal law or program except Medicaid.

(2) The administrator or the board of directors of the personal responsibility high risk pool shall have a cause of action against an eligible person for the recovery of the amount of benefits paid which are not covered expenses. Benefits due from the plan may be reduced or refused as a offset against any amount recoverable under this paragraph.
 

33-44-14  Immunity from liability

The establishment of rates, forms, procedures, or fixed schedules of benefits or any other similar action required by this chapter shall not be the basis of any legal action, criminal or civil liability, or penalty against the plan or the board of directors of the plan.
 

33-44-15  Exemption from taxes

The plan established pursuant to this chapter shall be exempt from any and all taxes levied by this state or any of its political subdivisions.
 

33-44-16  Personal Responsibility High Risk Pool Funding

(a)          All premiums paid by covered lives shall be used solely for the administration and payment of claims under the policies of the personal responsibility high risk pool.

 

(b)          commissions of at least 4% on all policies placed with the Personal Responsibility High Risk Pool.  The pool insurer or administrator will be under no contractual obligation to compensate another agent, broker, or third party for the placements made through the Georgia Health Underwriting Authority.

(c)          In assisting qualified eligible members or qualified eligible individuals with securing private insurance who are determined to be not uninsurable the Georgia Health Underwriting Authority shall be compensated with a commission of at least 5% of the premiums paid for the length of the contract or alternatives subsequently chosen.  The insurer will be under no contractual obligation to compensate another agent, broker, or third party for the sale of the policy made through the Georgia Health Underwriting Authority.

(d)          Subsequent to the acceptance of the qualifying eligible member or qualifying eligible individual for a health insurance the policy will be consider a “Home Office” account.  The Georgia Health Underwriting Authority shall not have any further obligations to the member or individual for policy maintenance or claims support.

(e)          The personal responsibility high risk pool shall be authorized to receive donations or gifts from individuals, private organizations, foundations, or other sources and shall be authorized to receive state funds or any federal funds which may become available. Any funds received as donations or gifts shall be deemed trust funds to be held and applied solely for the purposes of this chapter.

 

(f)          The personal responsibility high risk pool is authorized to receive directed funds from third parties to Health Savings Accounts for specific individuals, if such an account is properly established by the individual.

 

(g)          A “Personal Responsibility High Risk Pool” Tax Credit totaling $10,000,000 per year for ten years is authorized for the operations and payment of benefits under the personal responsibility high risk pool. 

 

(h) The General Assembly shall authorize up to $10,000,000 per year for the operations and payment of benefits under the personal responsibility high risk pool.
 
(i) The High Risk Pool shall receive state income tax funding from the partial or full loss of Georgia state income tax standard personal or family exemptions from those choosing to be uninsured.  The Department of Revenue will calculate the increased state income tax from returns showing the loss of exemptions and submit 80% of that tax amount to cover claims and other expenses of the  Personal Responsibility High Risk Pool.

 

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