H.R. 3504

Consumer Protection and Rate Review Act of 2013

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I

113th CONGRESS

1st Session

H. R. 3504

IN THE HOUSE OF REPRESENTATIVES

November 15, 2013

Ms. Schakowsky introduced the following bill; which was referred to the Committee on Energy and Commerce

A BILL

To provide improved consumer protection and rate review for health insurance coverage in the individual market, and for other purposes.

1.

Short title

This Act may be cited as the Consumer Protection and Rate Review Act of 2013.

2.

Requiring State insurance commissioners to investigate instances of inadequate notices of cancellation or conversion of individual health insurance policies

(a)

In general

Each State insurance commissioner shall investigate and take appropriate administrative or other actions (such as the imposition of a fine) on cases of inadequate notices of cancellations or conversions of health insurance coverage in the individual market that take effect on or after January 1, 2014.

(b)

Inadequate notice

In this section, a notice of the cancellation or conversion of individual health insurance coverage shall be treated as inadequate if the notice—

(1)

fails to contain information—

(A)

on obtaining health insurance coverage through an Exchange under the Patient Protection and Affordable Care Act;

(B)

on the possible availability of assistance under such Act towards payment of the premiums and cost-sharing for such coverage; and

(C)

on the improved benefits for coverage through an Exchange, compared to health insurance coverage not offered through an Exchange;

(2)

fails to be transparent by inappropriately steering individuals to more expensive plans provided by the cancelling issuer; or

(3)

fails to otherwise comply with requirements of law.

(c)

Reports

(1)

State commissioners to HHS

Not later than March 31, 2014, each State insurance commissioner shall submit to the Secretary of Health and Human Services a report on the investigations and actions described in subsection (a).

(2)

HHS report to Congress

Not later than April 30, 2014, the Secretary shall submit to Congress a report on such investigations and actions.

(d)

Definitions of State, health insurance coverage, and individual market

In this section, the terms State, health insurance coverage, and individual market have the meanings given such terms for purposes of title I of the Patient Protection and Affordable Care Act.

3.

Protection of consumers from excessive, unjustified, or unfairly discriminatory rates from H.R. 1019

(a)

Protection from excessive, unjustified, or unfairly discriminatory rates

The first section 2794 of the Public Health Service Act (42 U.S.C. 300gg–94), as added by section 1003 of the Patient Protection and Affordable Care Act (Public Law 111–148), is amended by adding at the end the following new subsection:

(e)

Protection from excessive, unjustified, or unfairly discriminatory rates

(1)

Authority of States

Nothing in this section shall be construed to prohibit a State from imposing requirements (including requirements relating to rate review standards and procedures and information reporting) on health insurance issuers with respect to rates that are in addition to the requirements of this section and are more protective of consumers than such requirements.

(2)

Consultation in rate review process

In carrying out this section, the Secretary shall consult with the National Association of Insurance Commissioners and consumer groups.

(3)

Determination of who conducts reviews for each State

The Secretary shall determine, after the date of enactment of this section and periodically thereafter, the following:

(A)

In which markets in each State the State insurance commissioner or relevant State regulator shall undertake the corrective actions under paragraph (4), as a condition of the State receiving the grant in subsection (c), based on the Secretary’s determination that the State regulator is adequately undertaking and utilizing such actions in that market.

(B)

In which markets in each State the Secretary shall undertake the corrective actions under paragraph (4), in cooperation with the relevant State insurance commissioner or State regulator, based on the Secretary’s determination that the State is not adequately undertaking and utilizing such actions in that market.

(4)

Corrective action for excessive, unjustified, or unfairly discriminatory rates

In accordance with the process established under this section, the Secretary or the relevant State insurance commissioner or State regulator shall take corrective actions to ensure that any excessive, unjustified, or unfairly discriminatory rates are corrected prior to implementation, or as soon as possible thereafter, through mechanisms such as—

(A)

denying rates;

(B)

modifying rates; or

(C)

requiring rebates to consumers.

(5)

Noncompliance

Failure to comply with any corrective action taken by the Secretary under this subsection may result in the application of civil monetary penalties and, if the Secretary determines appropriate, make the plan involved ineligible for classification as a Qualified Health Plan.

.

(b)

Clarification of Regulatory Authority

Such section is further amended—

(1)

in subsection (a)—

(A)

in the heading, by striking premium and inserting rate;

(B)

in paragraph (1), by striking unreasonable increases in premiums and inserting potentially excessive, unjustified, or unfairly discriminatory rates, including premiums,; and

(C)

in paragraph (2)—

(i)

by striking an unreasonable premium increase and inserting a potentially excessive, unjustified, or unfairly discriminatory rate;

(ii)

by striking the increase and inserting the rate; and

(iii)

by striking such increases and inserting such rates;

(2)

in subsection (b)—

(A)

by striking premium increases each place it appears and inserting rates; and

(B)

in paragraph (2)(B), by striking premium and inserting rate; and

(3)

in subsection (c)(1)—

(A)

in the heading, by striking Premium and inserting Rate;

(B)

by inserting that satisfy the condition under subsection (e)(3)(A) after award grants to States; and

(C)

in subparagraph (A), by striking premium increases and inserting rates.

(c)

Conforming amendment

Title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amended—

(1)

in section 2723 (42 U.S.C. 300gg–22), as redesignated by the Patient Protection and Affordable Care Act—

(A)

in subsection (a)—

(i)

in paragraph (1), by inserting and section 2794 after this part; and

(ii)

in paragraph (2), by inserting or section 2794 after this part; and

(B)

in subsection (b)—

(i)

in paragraph (1), by inserting and section 2794 after this part; and

(ii)

in paragraph (2)—

(I)

in subparagraph (A), by inserting or section 2794 that is after this part; and

(II)

in subparagraph (C)(ii), by inserting or section 2794 after this part; and

(2)

in section 2761 (42 U.S.C. 300gg–61)—

(A)

in subsection (a)—

(i)

in paragraph (1), by inserting and section 2794 after this part; and

(ii)

in paragraph (2)—

(I)

by inserting or section 2794 after set forth in this part; and

(II)

by inserting and section 2794 after the requirements of this part; and

(B)

in subsection (b)—

(i)

by inserting and section 2794 after this part; and

(ii)

by inserting and section 2794 after part A.

(d)

Applicability to grandfathered plans

Section 1251(a)(4)(A) of the Patient Protection and Affordable Care Act (Public Law 111–148), as added by section 2301 of the Health Care and Education Reconciliation Act of 2010 (Public Law 111–152), is amended by adding at the end the following:

(v)

Section 2794 (relating to reasonableness of rates with respect to health insurance coverage).

.

(e)

Authorization of appropriations

There are authorized to be appropriated to carry out this section, such sums as may be necessary.

(f)

Effective date

The amendments made by this section shall take effect on the date of enactment of this Act and shall be implemented with respect to health plans beginning not later than January 1, 2014.