HBA-ATS H.B. 1431 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1431
By: Averitt
Insurance
3/8/1999
Introduced



BACKGROUND AND PURPOSE 

Created in 1989, the Texas Health Insurance Risk Pool (pool) became
operational when the Texas Legislature provided start-up funding in 1997.
The legislature provided the start-up funding to ensure that Texas complied
with a federal law that reformed the marketplace for health insurance.
Commonly called HIPAA (the Health Insurance Portability and Accountability
Act), the federal legislation limits the imposition of preexisting
condition requirements in any group health plan or group health insurance,
and requires every health insurance issuer offering individual health
insurance coverage in a state to accept every eligible individual wanting
to purchase such coverage without imposing such requirements.  The law
required the states to conform to the minimum federal standards or to
develop an acceptable alternative mechanism.  Those alternatives included
the following: providing guaranteed individual health insurance (with no
rate constraints by law); enacting or modifying laws to implement a health
insurance risk pool according to the new law (with rates capped at a
maximum of 200 percent of average); or enacting another type of
risk-spreading mechanism.  

Texas chose to implement the health risk insurance pool it had created in
1989.  The purpose of the pool is to provide uninsurable individuals access
to health insurance for medical conditions or diagnoses that result in
ineligibility for private insurance coverage.  The pool funds itself by
charging premiums for the policies that it issues.  If claims and expenses
for the pool's operation exceed collected premiums, state law authorizes
the board of directors of the pool to collect additional funds by charging
an assessment to licensed insurers providing health insurance coverage in
this state.  It has been anticipated that assessments will be required each
year.   

H.B. 1431 authorizes the commissioner of insurance (commissioner) to
approve the payment of a higher percentage of the gross premium receipts
(not to exceed 15 percent) of the pool to administer the pool if the
commissioner determines that the higher amount is necessary. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 7(f), Article 3.77, Insurance Code, to authorize
the commissioner of insurance (commissioner) to approve the payment of a
higher percentage of the gross premium receipts of the Texas Health
Insurance Risk Pool (pool) for the calendar year, rather than the preceding
calendar year, to administer the pool if the commissioner determines that
the higher amount is necessary.  Provides that the new amount is not to
exceed 15 percent.  Makes a conforming change. 

SECTION 2.  Provides that this Act applies to payments for the 1999
calendar year or a subsequent year. 

SECTION 3.  Emergency clause.
            Effective date: upon passage.