II 111th CONGRESS 1st Session S. 1730 IN THE SENATE OF THE UNITED STATES September 30, 2009 Mr. Franken (for himself, Mr. Rockefeller, Mr. Whitehouse, and Mr. Sanders) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To provide for minimum loss ratios for health insurance coverage.

1.

Short title

This Act may be cited as the Fairness in Health Insurance Act.

2.

Requirement of minimum loss ratio of 90 percent for health insurance coverage

(a)

In general

A health insurance issuer shall not offer health insurance coverage unless the issuer demonstrates that such coverage has a medical loss ratio of at least 90 percent. (b)

Medical loss ratio

(1)

In general

In this section, the term medical loss ratio has the meaning given such term by the Secretary of Health and Human Services. The Secretary shall establish a uniform definition of medical loss ratio and methodology for determining how to calculate the medical loss ratio. Such methodology shall take into account the circumstances of different plans and activities related to health services such as chronic disease management and quality assurance. (2)

Report

Not later than December 31, 2010, the Secretary of Health and Human Services shall publish a report that describes the definition developed under paragraph (1) and the elements with respect to such definition. (c)

Transparency

(1)

Submission of data

Beginning in plan year 2011, a health insurance issuer shall provide the Secretary of Health and Human Services with data to enable the Secretary to determine whether the issuer is in compliance with subsection (a) with respect to health insurance coverage offered by such issuer. (2)

Development of elements and definitions

Not later than December 31, 2010, the Secretary of Health and Human Services shall develop, publish in a report, and implement the standardized data elements and definitions to be used by health insurance issuers in the reporting of data necessary for the calculation of the medical loss ratio under paragraph (1). (d)

Rebates

Each health insurance issuer that offers health insurance coverage shall provide that for any plan year in which the coverage has a medical loss ratio below 90 percent, the issuer shall provide, in a manner specified by the Secretary, for rebates to enrollees of payments sufficient with respect to such loss ratio. (e)

Enforcement

The Secretary shall promulgate regulations for enforcing the provisions of this section and may provide for appropriate penalties. (f)

Definition

In this section, the terms health insurance coverage and health insurance issuer shall have the meanings given such terms in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91).