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LRB-2629/1
PJK:klm&wlj
2015 - 2016 LEGISLATURE
September 30, 2015 - Introduced by Senators C. Larson, Carpenter, Hansen, L.
Taylor
, Vinehout, Harris Dodd, Erpenbach and Ringhand, cosponsored by
Representatives Kolste, Jorgensen, Sinicki, Brostoff, Kessler, Goyke,
Genrich, Pope, Spreitzer, Ohnstad, Subeck and Berceau. Referred to
Committee on Insurance, Housing, and Trade.
SB277,1,4 1An Act to renumber 625.02 (1); to amend 625.03 (1m) (intro.), 625.13 (1),
2625.15 (2), 625.21 (1), 625.22 (1), 625.22 (3) and 625.23; and to create 625.02
3(1j) and 625.25 of the statutes; relating to: rate regulation for health
4insurance.
Analysis by the Legislative Reference Bureau
This bill changes the filing requirements for health insurance premium rates
and adds some publication and notice requirements related to increases in those
rates.
Under current law, insurers must file with the Office of the Commissioner of
Insurance (OCI) premium rates, and changes to premium rates, for all types of
insurance within 30 days after the rates or rate changes become effective. Current
law prohibits premium rates from being excessive, inadequate, or unfairly
discriminatory and provides guidelines for determining whether rates comply with
those standards. The commissioner of insurance may order that a rate be
discontinued for any policy issued or renewed after a date specified in the order if,
after a hearing, the commissioner determines that the rate does not comply with
those standards.
Under the bill, an insurer that writes health insurance must file with OCI
premium rates, and changes to premium rates, for health insurance before those
rates or changes to rates become effective and may not use a new or changed rate for
health insurance without approval of the rate by the commissioner. Unless the
commissioner holds a hearing on a rate or change to a rate, the rate or changed rate

is approved if the commissioner does not disapprove the rate or changed rate within
30 days after it was filed with OCI. The bill specifically authorizes the commissioner
to disapprove any proposed rate or rate change that is not justified based on
underlying medical costs.
The bill requires the commissioner to publish on OCI's Internet site all health
insurance rate increases that the commissioner approves and requires an insurer of
a health benefit plan for which a rate increase has been approved to provide at least
60 days' notice of the rate increase to each insured under the health benefit plan.
Under the bill, the commissioner must hold a public hearing before approving or
disapproving any health insurance rate change that increases an existing rate by
more than 10 percent. In addition, if the commissioner approves a health insurance
rate increase of more than 10 percent after holding a hearing and the insurer
justified the rate increase based on increased medical costs, the commissioner must
publish on OCI's Internet site the discounted payment rates negotiated by the
insurer with the insurer's provider networks.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB277,1 1Section 1. 625.02 (1) of the statutes is renumbered 625.02 (1m).
SB277,2 2Section 2. 625.02 (1j) of the statutes is created to read:
SB277,2,33 625.02 (1j) "Health insurance" has the meaning given in s. 632.745 (12).
SB277,3 4Section 3. 625.03 (1m) (intro.) of the statutes is amended to read:
SB277,2,85 625.03 (1m) (intro.) This Except as specifically provided otherwise in this
6chapter, this
chapter applies to all kinds and lines of direct insurance written on risks
7or operations in this state by any insurer authorized to do business in this state,
8except:
SB277,4 9Section 4. 625.13 (1) of the statutes is amended to read:
SB277,3,210 625.13 (1) Filing procedure. Except as provided in sub. (2) and s. 625.25 (2)
11(a)
, every authorized insurer and every rate service organization licensed under s.
12625.31 which has been designated by any insurer for the filing of rates under s.
13625.15 (2) shall file with the commissioner all rates and supplementary rate

1information and all changes and amendments thereof made by it for use in this state
2within 30 days after they become effective.
SB277,5 3Section 5. 625.15 (2) of the statutes is amended to read:
SB277,3,114 625.15 (2) Rate filing. An insurer may discharge its obligation under s. 625.13
5(1) or 625.25 (2) (a) by giving notice to the commissioner that it uses rates and
6supplementary rate information prepared by a designated rate service organization,
7with such information about modifications thereof as is necessary fully to inform the
8commissioner. The insurer's rates or proposed rates and supplementary rate
9information shall be those filed from time to time by the rate service organization,
10including any amendments or proposed amendments thereto as filed, subject,
11however, to the modifications filed by the insurer.
SB277,6 12Section 6. 625.21 (1) of the statutes is amended to read:
SB277,3,2413 625.21 (1) Rule instituting delayed effect. If the commissioner finds that
14competition is not an effective regulator of the rates charged or that a substantial
15number of companies are competing irresponsibly through the rates charged, or that
16there are widespread violations of this chapter, in any kind or line of insurance or
17subdivision thereof or in any rating class or rating territory, he or she may
18promulgate a rule requiring that in the kind or line of insurance or subdivision
19thereof or rating class or rating territory comprehended by the finding any
20subsequent changes in the rates or supplementary rate information be filed with the
21commissioner at least 15 days before they become effective. The commissioner may
22extend the waiting period for not to exceed 15 additional days by written notice to
23the filer before the first 15-day period expires. This subsection does not apply to
24health insurance, which is subject to s. 625.25 (2) (a).
SB277,7 25Section 7. 625.22 (1) of the statutes is amended to read:
SB277,4,4
1625.22 (1) Order in event of violation. If the commissioner finds after a
2hearing that a rate or proposed rate is not in compliance with s. 625.11, the
3commissioner shall order that its use be discontinued, or that it may not be used, for
4any policy issued or renewed after a date specified in the order.
SB277,8 5Section 8. 625.22 (3) of the statutes is amended to read:
SB277,4,106 625.22 (3) Approval of substituted rate. Within Except for rates for health
7insurance, which is subject to s. 625.25 (2) (a), within
one year after the effective date
8of an order under sub. (1), no rate promulgated to replace a disapproved one may be
9used until it has been filed with the commissioner and not disapproved within 30
10days thereafter.
SB277,9 11Section 9. 625.23 of the statutes is amended to read:
SB277,4,23 12625.23 Special restrictions on individual insurers. The commissioner
13may by order require that a particular insurer file any or all of its rates and
14supplementary rate information 15 days prior to their effective date, if and to the
15extent that he or she finds, after a hearing, that the protection of the interests of its
16insureds and the public in this state requires closer supervision of its rates because
17of the insurer's financial condition or rating practices. The commissioner may extend
18the waiting period for any filing for not to exceed 15 additional days by written notice
19to the insurer before the first 15-day period expires. A filing not disapproved before
20the expiration of the waiting period shall be deemed to meet the requirements of this
21chapter, subject to the possibility of subsequent disapproval under s. 625.22. This
22section does not apply to an insurer with respect to rates for health insurance, which
23is subject to s. 625.25 (2) (a).
SB277,10 24Section 10. 625.25 of the statutes is created to read:
SB277,4,25 25625.25 Rates for health insurance. (1) Definitions. In this section:
SB277,5,1
1(a) "Group health benefit plan" has the meaning given in s. 632.745 (9).
SB277,5,22 (b) "Health benefit plan" has the meaning given in s. 632.745 (11).
SB277,5,33 (c) "Insurer" has the meaning given in s. 632.745 (15).
SB277,5,44 (d) "Large group market" has the meaning given in s. 632.745 (17).
SB277,5,55 (e) "Small group market" has the meaning given in s. 632.745 (26).
SB277,5,22 6(2) Filing of rates; hearing. (a) Every insurer, and every rate service
7organization licensed under s. 625.31 that has been designated by any insurer for the
8filing of rates under s. 625.15 (2), shall file with the commissioner all proposed rates
9and supplementary rate information, and all proposed changes and amendments to
10rates and supplementary rate information, for use in this state for any health benefit
11plan offered by the insurer before the proposed rates or changes to rates become
12effective. An insurer may not use a proposed rate or change to a rate until it has been
13filed with and approved by the commissioner. Unless the commissioner holds a
14hearing on the proposed rate or change to a rate, a proposed rate or change to a rate
15is approved if the commissioner does not disapprove the proposed rate or change
16within 30 days after filing, or within a 30-day extension of that period ordered by the
17commissioner prior to the expiration of the first 30 days. The requirement under this
18paragraph applies with respect to rates and changes to rates for all health benefit
19plans, including individual health benefit plans, group health benefit plans offered
20in the small group market, and group health benefit plans offered in the large group
21market, that have not gone into effect by the effective date of this paragraph .... [LRB
22inserts date].
SB277,5,2523 (b) If any proposed change to a rate filed under par. (a) increases the existing
24rate by more than 10 percent of that rate, the commissioner shall hold a public
25hearing before approving or disapproving the proposed change to the rate.
SB277,6,3
1(c) The commissioner may disapprove a proposed rate or change to a rate filed
2under par. (a) that the commissioner determines is not justified based on underlying
3medical costs.
SB277,6,7 4(3) Publication of increases, negotiated rates. (a) The commissioner shall
5publish on the office's Internet site, in a format that is readily understandable by
6members of the public, all rate changes filed under sub. (2) (a) that increase an
7existing rate by any amount and that are approved.
SB277,6,128 (b) If the commissioner approves a rate increase after holding a hearing under
9sub. (2) (b) and the insurer justified the rate increase based on increased medical
10costs, the commissioner shall publish on the office's Internet site, in a format that is
11readily understandable by members of the public, the discounted payment rates the
12insurer has negotiated with each of the insurer's provider networks.
SB277,6,16 13(4) Notice of rate increase to insureds. If the commissioner approves a rate
14increase filed under sub. (2) (a), the insurer shall provide notice of the rate increase
15to each insured under the health benefit plan at least 60 days before the rate increase
16goes into effect.
SB277,6,1717 (End)
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