SENATE BILL 391
48th legislature - STATE OF NEW MEXICO - second session, 2008
INTRODUCED BY
Timothy Z. Jennings
AN ACT
RELATING TO INSURANCE; REVISING DEFINITIONS AND ELIGIBILITY CRITERIA IN THE MEDICAL INSURANCE POOL ACT; PROHIBITING LIFETIME MAXIMUM BENEFIT LEVELS IN NEW MEXICO INSURANCE POOL POLICIES; CLARIFYING SMALL GROUP POLICIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 59A-54-3 NMSA 1978 (being Laws 1987, Chapter 154, Section 3, as amended) is amended to read:
"59A-54-3. DEFINITIONS.--As used in the Medical Insurance Pool Act:
A. "board" means the board of directors of the pool;
B. "creditable coverage" means, with respect to
an individual, coverage of the individual pursuant to:
(1) a group health plan;
(2) health insurance coverage;
(3) Part A or Part B of Title 18 of the Social Security Act;
(4) Title 19 of the Social Security Act except coverage consisting solely of benefits pursuant to Section 1928 of that title;
(5) 10 USCA Chapter 55;
[(6) a medical care program of the Indian health service or of an Indian nation, tribe or pueblo;
(7)] (6) the Medical Insurance Pool Act;
[(8)] (7) a health plan offered pursuant to
5 USCA Chapter 89;
[(9)] (8) a public health plan as defined in federal regulations; or
[(10)] (9) a health benefit plan offered pursuant to Section 5(e) of the federal Peace Corps Act;
C. "federally defined eligible individual" means an individual:
(1) for whom, as of the date on which the individual seeks coverage under the Medical Insurance Pool Act, the aggregate of the periods of creditable coverage is eighteen or more months;
(2) whose most recent prior creditable coverage was under a group health plan, [government] governmental plan, church plan or health insurance coverage, as those plans or coverage are defined in Section 59A-23E-2 NMSA 1978, offered in connection with [such a] that plan;
(3) who is not eligible for coverage under
a group health plan, Part A or Part B of Title 18 of the Social Security Act or a state plan under Title 19 or Title 21 of the Social Security Act or a successor program and who does not have other health insurance coverage;
(4) with respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;
(5) who, if offered the option of continuation of coverage under a continuation provision pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 or a similar state program, elected this coverage; and
(6) who has exhausted continuation coverage under this provision or program, if the individual elected the continuation coverage described in Paragraph (5) of this subsection;
D. "health care facility" means [any] an entity providing health care services that is licensed by the department of health;
E. "health care services" means [any] services or products included in the furnishing to [any] an individual of medical care or hospitalization, or incidental to the furnishing of [such] that care or hospitalization, as well as the furnishing to [any] a person of [any] other services or products for the purpose of preventing, alleviating, curing or
healing human illness or injury;
F. "health insurance" means [any] a hospital and medical expense-incurred policy; nonprofit health care service plan contract; health maintenance organization subscriber contract; short-term, accident, fixed indemnity or specified disease policy; [or] disability income contracts; limited benefit insurance; credit insurance; or as defined by Section 59A-7-3 NMSA 1978. "Health insurance" does not include insurance arising out of the Workers' Compensation Act or similar law, automobile medical payment insurance or insurance under which benefits are payable with or without regard to fault and that is required by law to be contained in [any] a liability insurance policy;
G. "health maintenance organization" means [any] a person who provides, at a minimum, either directly or through contractual or other arrangements with others, basic health care services to enrollees on a fixed prepayment basis and who is responsible for the availability, accessibility and quality of the health care services provided or arranged, or as defined by Subsection M of Section 59A-46-2 NMSA 1978;
H. "health plan" means [any] an arrangement by which persons, including dependents or spouses, covered or making application to be covered under the pool have access to hospital and medical benefits or reimbursement, including group or individual insurance or subscriber contract; coverage through health maintenance organizations, preferred provider organizations or other alternate delivery systems; coverage under prepayment, group practice or individual practice plans; coverage under uninsured arrangements of group or group-type contracts, including employer self-insured, cost-plus or other benefits methodologies not involving insurance or not subject to New Mexico premium taxes; coverage under group-type contracts that are not available to the general public and can be obtained only because of connection with a particular organization or group; and coverage by medicare or other governmental benefits. "Health plan" includes coverage through health insurance;
I. "insured" means an individual resident of this state who is eligible to receive benefits from [any] an insurer or other health plan;
J. "insurer" means an insurance company
authorized to transact health insurance business in this state, a nonprofit health care plan, a health maintenance organization and self-insurers not subject to federal preemption. "Insurer" does not include an insurance company that is licensed under the Prepaid Dental Plan Law or a company that is solely engaged in the sale of dental insurance and is licensed not under that act, but under another provision of the Insurance Code;
K. "medicare" means coverage under Part A or
Part B of Title 18 of the Social Security Act, as amended; L. "pool" means the New Mexico medical insurance pool;
M. "preexisting condition" means a physical or mental condition for which medical advice, medication, diagnosis, care or treatment was recommended for or received by an applicant within six months before the effective date of coverage, except that pregnancy is not considered a preexisting condition for a federally defined eligible individual; and
N. "therapist" means a licensed physical, occupational, speech or respiratory therapist."
Section 2. Section 59A-54-12 NMSA 1978 (being Laws 1987, Chapter 154, Section 12, as amended) is amended to read:
"59A-54-12. ELIGIBILITY--POLICY PROVISIONS.--
A. Except as provided in Subsection B of this section, a person is eligible for a pool policy only if on the effective date of coverage or renewal of coverage the person is a New Mexico resident, and:
(1) is not eligible as an insured or covered dependent for [any] a health plan that provides coverage for comprehensive major medical or comprehensive physician and hospital services;
(2) is currently paying a rate for a health plan that is higher than one hundred twenty-five percent of the pool's standard rate;
(3) has a mental health diagnosis and has individual health insurance coverage that does not include coverage for mental health services;
(4) has been rejected for coverage for comprehensive major medical or comprehensive physician and hospital services;
(5) is only eligible for a health plan with a rider, waiver or restrictive provision for that particular individual based on a specific condition;
(6) has a medical condition that is listed on the pool's prequalifying conditions;
(7) has as of the date the individual seeks coverage from the pool an aggregate of eighteen or more months of creditable coverage, the most recent of which was under a group health plan, governmental plan or church plan as defined in Subsections P, N and D, respectively, of Section 59A-23E-2 NMSA 1978, except, for the purposes of aggregating creditable coverage, a period of creditable coverage shall not be counted with respect to enrollment of an individual for coverage under the pool if, after that period and before the enrollment date, there was a [sixty-three-day] ninety-five day or longer period during all of which the individual was not covered under any creditable coverage; or
(8) is entitled to continuation coverage pursuant to Section 59A-23E-19 NMSA 1978.
B. Notwithstanding the provisions of Subsection A of this section:
(1) a person's eligibility for a policy issued under the Health Insurance Alliance Act shall not preclude a person from remaining on or purchasing a pool policy; provided that a self-employed person who qualifies for an approved health plan under the Health Insurance Alliance Act by using a dependent as the second employee may choose a pool policy in lieu of the health plan under that act; and
(2) if a pool policyholder becomes eligible for any group health plan, the policyholder's pool coverage shall not be involuntarily terminated until any preexisting condition period imposed on the policyholder by the plan has been exhausted.
C. Coverage under a pool policy is in excess of and shall not duplicate coverage under any other form of health insurance.
D. A policyholder's newborn child or newly adopted child is automatically eligible for thirty-one consecutive calendar days of coverage for an additional premium.
E. Except for a person eligible as provided in Paragraph (7) of Subsection A of this section, a pool policy may contain provisions under which coverage is excluded during a six-month period following the effective date of coverage as to a given individual for preexisting conditions.
F. The preexisting condition exclusions described in Subsection E of this section shall be waived to the extent to which similar exclusions have been satisfied under any prior health insurance coverage that was involuntarily terminated, if the application for pool coverage is made not later than [thirty-one] ninety-five days following the involuntary termination. In that case, coverage in the pool shall be effective from the date on which the prior coverage was terminated. This subsection does not prohibit preexisting conditions coverage in a pool policy that is more favorable to the insured than that specified in this subsection.
G. An individual is not eligible for coverage by the pool if:
(1) except as provided in Subsection I of
this section, the individual is, at the time of application, eligible for medicare or medicaid that would provide coverage for amounts in excess of limited policies such as dread disease, cancer policies or hospital indemnity policies;
(2) the individual has voluntarily terminated coverage by the pool within the past twelve months and did not have other continuous coverage during that time, except that this paragraph shall not apply to an applicant who is a federally defined eligible individual;
(3) the individual is an inmate of a public institution or is eligible for public programs for which medical care is provided;
(4) the individual is eligible for coverage under a group health plan;
(5) the individual has health insurance coverage as defined in Subsection R of Section 59A-23E-2 NMSA 1978;
(6) the most recent coverages within the coverage period described in Paragraph (7) of Subsection A of this section were terminated as a result of nonpayment of premium or fraud; or
(7) the individual has been offered the
option of continuation coverage under a federal COBRA continuation provision as defined in Subsection F of Section 59A-23E-2 NMSA 1978 or under a similar state program and [he] the individual has elected the coverage and did not exhaust the continuation coverage under the provision or program, provided, however, that an unemployed former employee who has not exhausted COBRA coverage shall be eligible.
H. [Any] A person whose health insurance coverage from a qualified state high risk pool health policy [with similar coverage] is terminated because of nonresidency in another state may apply for coverage under the pool. If the coverage is applied for within [thirty-one] ninety-five days after that termination and if premiums are paid for the entire coverage period, the effective date of the coverage shall be the date of termination of the previous coverage.
I. The board may issue a pool policy for individuals who:
(1) are enrolled in both Part A and Part B of medicare because of a disability; and
(2) except for the eligibility for medicare, would otherwise be eligible for coverage pursuant to the
criteria of this section."
Section 3. Section 59A-54-13 NMSA 1978 (being Laws 1987, Chapter 154, Section 13, as amended) is amended to read:
"59A-54-13. BENEFITS.--
A. The health insurance policy issued by the pool shall pay for medically necessary eligible health care services rendered or furnished for the diagnoses or treatment of illness or injury that exceed the deductible and coinsurance amounts applicable under Section 59A-54-14 NMSA 1978 and are not otherwise limited or excluded. Eligible expenses are the charges for the health care services and items for which benefits are extended under the pool policy. The coverage to be issued by the pool and its schedule of benefits, exclusions and other limitations shall be established by the board and shall, at a minimum, reflect the levels of health insurance coverage generally available in New Mexico for small group policies; provided that a health insurance policy issued by the pool shall not include a lifetime maximum benefit. The superintendent shall approve the benefit package developed by the board to ensure its compliance with the Medical Insurance Pool Act. The benefit package shall include therapy services and hearing aids.
B. The Medical Insurance Pool Act shall not be construed to prohibit the pool from issuing additional types of health insurance policies with different types of benefits [which] that, in the opinion of the board, may be of benefit to the citizens of New Mexico.
C. The board may design and employ cost containment measures and requirements, including preadmission certification and concurrent inpatient review, for the purpose of making the pool more cost effective."
Section 4. Section 59A-54-16 NMSA 1978 (being Laws 1987, Chapter 154, Section 16, as amended) is amended to read:
"59A-54-16. POOL POLICY.--
A. A pool policy offered under the Medical Insurance Pool Act shall contain provisions under which the pool is obligated to renew the contract until the day on which the individual in whose name the contract is issued first becomes eligible for medicare coverage, except that in a family policy covering both husband and wife, the age of the younger spouse shall be used as the basis for meeting the durational requirement of this subsection.
B. The pool shall not change the rates for pool policies except on a class basis with a clear disclosure in the policy of the right of the pool to do so.
C. In the case of a small group policy, a pool policy offered under the Medical Insurance Pool Act shall provide covered family members the right to continue the policy as the named insured or through a conversion policy upon the death of the named insured or upon the divorce, annulment or dissolution of marriage or legal separation of the spouse from the named insured by election to do so within a period of time specified in the contract subject to the requirements of this section [59A-54-l6 NMSA 1978]."
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