Section 7: Community rating; premium surcharges, discounts, increases; annual report of loss ratio; judicial review; public hearings
Section 7. (a) Any policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract offered, sold, issued, delivered, or otherwise made effective, or renewed, on or after a date established by the commissioner, by any carrier in the commonwealth shall be community rated.
(b) The commissioner may by regulation permit a carrier whose approved service area includes several different geographical regions of the commonwealth to use separate rates for different portions of its service area, provided the carrier's proposed regions do not contain configurations designed to avoid or segregate particular areas.
(c) As of February first, nineteen hundred and ninety-four, a carrier may apply a surcharge to the premium for a policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract to an eligible person who upgrades coverage or is a late enrollee as of January first, nineteen hundred ninety-four may discount the premium for a policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract for a person who has enrolled during the six month period beginning at the time the person became initially eligible for coverage. For purposes of this section, an eligible person ''upgrades coverage'' if the policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract under which the eligible person is covered at the time of application for new coverage is of lesser actuarial value than the new coverage, as determined in accordance with standards promulgated by the commissioner. Any surcharge applied to the premium of an eligible person who upgrades coverage or is a late enrollee may not exceed fifteen percent annually, and may not be charged for more than three years from the date it is first imposed by the carrier. Any discount applied to the premium of an eligible person who has enrolled during the six month period beginning at the time the person became initially eligible for coverage may not exceed fifteen percent and may not be applied for more than three years from the date such person first receives coverage under this chapter. The commissioner may promulgate regulations to enforce the provisions of this paragraph.
(d) After a date established by the commissioner pursuant to regulation and subject to the provisions of subsection (g), every carrier desiring to increase or decrease premiums for any policy for medicare supplement insurance or medicare select insurance, or desiring to set the initial premium for a new policy for medicare supplement insurance or medicare select insurance shall file a rate filing or application with the commissioner at least thirty days before the proposed effective date of such new rates. The commissioner may disapprove the proposed rates if the benefits provided therein are unreasonable in relation to the rate charged, or if they are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of this chapter.
If not disapproved by the commissioner, such filings shall be deemed to be approved by the commissioner thirty days after the date of filing, provided that:
(i) the filing complies with the anticipated minimum loss ratio standards of subsection (e); and
(ii) the carrier submits, as part of such filing, an actuarial opinion and a legal opinion that the carrier is in compliance with the provisions of this chapter. The commissioner may by regulation specify such other information which shall be included in any such filing.
Such filing shall not be disapproved by the commissioner except after a hearing conducted pursuant to chapter thirty A within thirty days after such filing. Any increase in premium rates shall continue in effect for not less than twelve months, except that an increase in benefits or decrease in rates may be permitted at any time.
(e) The anticipated minimum loss ratio shall be:
(i) at least ninety-five percent of premium for medicare supplement insurance or medicare select insurance issued by a non-profit hospital service corporation or medical service corporation for the nineteen hundred and ninety-four policy year;
(ii) at least ninety percent of premium for medicare supplement insurance or medicare select insurance issued by a non-profit hospital service corporation or medical service corporation for subsequent policy years;
(iii) at least sixty-five percent of premium earned from individual policies for medicare supplement insurance or medicare select insurance issued by commercial insurers; or at least seventy-five percent of premium earned from group policies issued by commercial insurers, including, but not limited to policies issued as a result of solicitations of individuals through the mails or through mass media advertising, including both print and broadcast advertising; and,
(iv) at least eighty percent of premium for policies issued for the nineteen hundred and ninety-four policy year and thereafter pursuant to a cost contract by a health maintenance organization, and provided that, where medicare select insurance under chapter one hundred and seventy-six G is issued by any carrier for the nineteen hundred and ninety-four policy year and thereafter, this loss ratio shall apply.
Each policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract offered by a carrier shall independently meet the applicable minimum loss ratio standard.
(f) A carrier shall annually report to the commissioner no later than May first, the actual loss ratio calculated for each policy for medicare supplement insurance or medicare select insurance or a policy issued pursuant to a cost contract for the previous calendar year. In each case where the loss ratio for policies for medicare supplement insurance or medicare select insurance or policies issued pursuant to a cost contract fails to comply with the minimum loss ratio requirements of this chapter, the carrier shall issue a refund or credit against future premiums to insureds. The instructions and format for calculating and reporting loss ratios and issuing dividends and credits shall be prescribed by the commissioner by regulation, and shall be consistent with the requirements of OBRA 90.
(g) If a carrier files for an increase in premium of ten percent or more than the premium previously charged, or if a carrier files an initial premium request that is ten percent or more than the average premium for the same policies for medicare supplement insurance or medicare select insurance or policies issued pursuant to a cost contract offered by carriers in the same class under subsection (e), or if a carrier files an initial premium request for new policies of medicare supplement insurance or medicare select insurance issued to conform with the initial regulations promulgated by the commissioner under section four, such carrier's rate, in addition to being subject to all other provisions of this chapter, shall be subject to the prior approval of the commissioner as set forth in this subsection. In granting such prior approval, the commissioner shall make a finding on the basis of information submitted by the carrier that the carrier employs a utilization review program and other techniques acceptable to the commissioner which have had or are expected to have a demonstrated impact on the prevention of reimbursement by the carrier for services which are not medically necessary. Any requested premium increase in excess of ten percent for a medicare supplemental insurance plan shall be communicated to the insureds at least ninety days prior to the effective date of such increase, or as the commissioner may direct.
Such requested premium increase or initial premium request shall be filed no later than ninety days prior to the requested effective date of such rate. No such rate shall be effective until after a public hearing conducted by the commissioner, and advertised in newspapers in Boston, Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford, and Lowell, or by notifying such newspapers of said hearing, and held within thirty days of the filing of such rate with the commissioner pursuant to subsection (d). The commissioner shall approve or disapprove such rate within thirty days following the conclusion of the public hearing, to be effective not earlier than thirty days subsequent to such approval. No such rate shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of this chapter.
The commissioner shall promulgate regulations to specify the scheduling of the hearings required pursuant to this subsection, and the timetable for the approval or disapproval of requests for rate increases.
(h) Every carrier, as a condition of doing business under the authority of this chapter, shall file annually with the commissioner an actuarial opinion and legal opinion that certifies that the carrier's rating methodologies and rates comply with the requirements of this chapter and regulations promulgated under authority of this chapter. Every carrier shall maintain at its principal place of business for inspection by the commissioner a complete and detailed description of its rating practices and such other information as the commissioner may by regulation require.
(i) The supreme judicial court shall have jurisdiction in equity upon the petition of the attorney general, on behalf of the commissioner and upon a summary hearing, to enforce all lawful orders of the commissioner.
Any subscriber, non-profit hospital service corporation, non-profit medical service corporation or other person aggrieved by any final action, order, finding, or decision of the commissioner under this section may, within twenty days from the filing of such memorandum thereof in his office, file a petition in the supreme judicial court for the county of Suffolk for a review of such action, order, finding, or decision. The final action, order, finding, or decision of the commissioner shall remain in full force and effect, pending the final decision of the court unless the court or a justice thereof after notice to the commissioner shall by a special order otherwise direct. Review by the court on the merits shall be limited to the record of proceedings before the commissioner. The court shall have jurisdiction to modify, amend, annul, reverse or affirm such action, order, finding or decision and shall uphold the commissioner's action, order, finding, or decision if it is consistent with the standards set forth in paragraph seven of section fourteen of chapter thirty A. The court may make any appropriate order or decree. The court may make such order as to costs as it deems equitable. The court may make such rules or orders as it deems proper governing proceedings under this section to secure prompt and speedy hearings and to expedite final decisions thereon.
(j) The commissioner shall annually conduct a public hearing to monitor the overall condition of the commonwealth's market so as to improve access by individuals to coverage under this chapter, to encourage aggregation of risk pools through product selection and to promote long-term access by individuals to coverage through continued stability and financial viability of all carriers in the market. The commissioner shall annually summarize all claims arising under this chapter experience and loss ratio data from all insurers covered by this chapter and submit such information to the committee on insurance. The commissioner shall also file with the committee on insurance any recommendations for legislation to improve the accessibility and affordability of coverage in the market.
(k) The commissioner may promulgate regulations to facilitate the administration and enforcement of this chapter and to govern hearings and investigations thereunder, and he may issue such orders as he finds proper, expedient or necessary to enforce and administer the provisions of this chapter and to secure compliance with any rules and regulations made thereunder, and he may by written order suspend or modify the requirements of filing or prior approval of contracts and rates.