Section 62E.08 State Plan Premium
62E.08 STATE PLAN PREMIUM.
Subdivision 1.Establishment.
The association shall establish the following maximum premiums to be charged for membership in the comprehensive health insurance plan:
(a) the premium for the number one qualified plan shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted average of rates charged by those insurers and health maintenance organizations with individuals enrolled in:
(1) $1,000 annual deductible individual plans of insurance in force in Minnesota;
(2) individual health maintenance organization contracts of coverage with a $1,000 annual deductible which are in force in Minnesota; and
(3) other plans of coverage similar to plans offered by the association based on generally accepted actuarial principles;
(b) the premium for the number two qualified plan shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted average of rates charged by those insurers and health maintenance organizations with individuals enrolled in:
(1) $500 annual deductible individual plans of insurance in force in Minnesota;
(2) individual health maintenance organization contracts of coverage with a $500 annual deductible which are in force in Minnesota; and
(3) other plans of coverage similar to plans offered by the association based on generally accepted actuarial principles;
(c) the premiums for the plans with a $2,000, $5,000, or $10,000 annual deductible shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted average of rates charged by those insurers and health maintenance organizations with individuals enrolled in:
(1) $2,000, $5,000, or $10,000 annual deductible individual plans, respectively, in force in Minnesota; and
(2) individual health maintenance organization contracts of coverage with a $2,000, $5,000, or $10,000 annual deductible, respectively, which are in force in Minnesota; or
(3) other plans of coverage similar to plans offered by the association based on generally accepted actuarial principles;
(d) the premium for each type of Medicare supplement plan required to be offered by the association pursuant to section 62E.12 shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted average of rates charged by those insurers and health maintenance organizations with individuals enrolled in:
(1) Medicare supplement plans in force in Minnesota;
(2) health maintenance organization Medicare supplement contracts of coverage which are in force in Minnesota; and
(3) other plans of coverage similar to plans offered by the association based on generally accepted actuarial principles; and
(e) the charge for health maintenance organization coverage shall be based on generally accepted actuarial principles.
The list of insurers and health maintenance organizations whose rates are used to establish the premium for coverage offered by the association pursuant to paragraphs (a) to (d) shall be established by the commissioner on the basis of information which shall be provided to the association by all insurers and health maintenance organizations annually at the commissioner's request. This information shall include the number of individuals covered by each type of plan or contract specified in paragraphs (a) to (d) that is sold, issued, and renewed by the insurers and health maintenance organizations, including those plans or contracts available only on a renewal basis. The information shall also include the rates charged for each type of plan or contract.
In establishing premiums pursuant to this section, the association shall utilize generally accepted actuarial principles, provided that the association shall not discriminate in charging premiums based upon sex. In order to compute a weighted average for each type of plan or contract specified under paragraphs (a) to (d), the association shall, using the information collected pursuant to this subdivision, list insurers and health maintenance organizations in rank order of the total number of individuals covered by each insurer or health maintenance organization. The association shall then compute a weighted average of the rates charged for coverage by all the insurers and health maintenance organizations by:
(1) multiplying the numbers of individuals covered by each insurer or health maintenance organization by the rates charged for coverage;
(2) separately summing both the number of individuals covered by all the insurers and health maintenance organizations and all the products computed under clause (1); and
(3) dividing the total of the products computed under clause (1) by the total number of individuals covered.
The association may elect to use a sample of information from the insurers and health maintenance organizations for purposes of computing a weighted average. In no case, however, may a sample used by the association to compute a weighted average include information from fewer than the two insurers or health maintenance organizations highest in rank order.
Subd. 2.Self-supporting.
Subject to subdivision 1, the schedule of premiums for coverage under the comprehensive health insurance plan shall be designed to be self-supporting and based on generally accepted actuarial principles.
Subd. 3.Determination of rates.
Premium rates under this section must be determined annually. These rates are effective July 1 of each year and must be based on a survey of approved rates of insurers and health maintenance organizations in effect, or to be in effect, on April 1 of the same calendar year. These rates may be trended to July 1 in order to reflect economic and inflationary changes.
Subd. 4.Smoker's rates.
The association may establish smoker and nonsmoker premium rates that are based on generally accepted actuarial principles.
History:
1976 c 296 art 1 s 8; 1977 c 409 s 12; 1979 c 272 s 6; 1983 c 123 s 1; 1991 c 165 s 2; 1993 c 324 s 1; 2000 c 398 s 2; 2003 c 109 s 2