WILLIAM DONALD SCHAEFER, Governor

Ch. 9

(2) THE EXCLUSION OF COVERAGE FOR PREEXISTING CONDITIONS
DOES NOT APPLY TO HEALTH CARE SERVICES FURNISHED TO NEWBORNS.

(3) A HEALTH BENEFIT PLAN THAT CHOOSES NOT TO USE A
PREEXISTING CONDITION PROVISION MAY IMPOSE ON ENROLLEES A WAITING
PERIOD NOT TO EXCEED 30 DAYS BEFORE THE COVERAGE UNDER THIS PROGRAM
IS EFFECTIVE. DURING THE WAITING PERIOD, THE HEALTH BENEFIT PLAN IS NOT
REQUIRED TO PROVIDE HEALTH CARE SERVICES OR BENEFITS AND A PREMIUM
MAY NOT BE CHARGED TO THE ENROLLEE.

(E) A PARTICIPATING CARRIER SHALL WAIVE ANY TIME PERIOD APPLICABLE
TO A PREEXISTING CONDITION PROVISION OR LIMITATION PERIOD WITH RESPECT
TO PARTICULAR SERVICES FOR THE PERIOD OF TIME AN ENROLLEE WAS
PREVIOUSLY COVERED BY A PLAN THAT PROVIDED AT LEAST THE SAME OR
SIMILAR BENEFITS, IF THE QUALIFYING PREVIOUS COVERAGE WAS CONTINUOUS
TO A DATE WITHIN THE 30 DAY PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE
DATE OF THE NEW COVERAGE.

702.

(A) (1) IN ESTABLISHING THE RATE FOR A HEALTH BENEFIT PLAN, A
CARRIER SHALL USE A RATING METHODOLOGY:

(I) IN WHICH THE PREMIUM IS THE SAME FOR ALL INDIVIDUALS
COVERED BY THAT HEALTH BENEFIT PLAN; AND

(II) THAT IS BASED ON THE EXPERIENCE OF THE ENTIRE POOL OF
RISKS COVERED BY THAT PLAN WITHOUT REGARD TO AGE, GENDER, GEOGRAPHY,
HEALTH STATUS, OR OCCUPATION.

(2) RATES MAY VARY BASED ON FAMILY COMPOSITION.

(B) (1) IN THIS SUBSECTION, "RISK ADJUSTMENT MECHANISM" MEANS A
STATISTICALLY BASED PROCESS THAT MAY BE USED TO ADJUST PAYMENTS TO
CARRIERS TO OFFSET DISPROPORTIONATE SHARES OF HIGH OR LOW RISK
ENROLLEES BY PARTICULAR CARRIERS.

(2) THE COMMISSION SHALL GATHER THE NECESSARY DATA TO STUDY
THE NEED FOR A RISK ADJUSTMENT MECHANISM THAT COULD BE IMPLEMENTED
TO CARRY OUT THIS SUBTITLE. A RISK ADJUSTMENT MECHANISM MAY BE
IMPLEMENTED AS THE COMMISSION DEEMS NECESSARY. A RISK ADJUSTMENT
MECHANISM ADOPTED BY THE COMMISSION SHALL BE BASED ON OBJECTIVE
DEMOGRAPHIC, GEOGRAPHIC, AND OTHER DATA REFLECTING ENROLLEES'
ACTUARIAL RISK, AND THE METHODS AND MECHANISM SHALL BE SUBJECT TO A
PUBLIC COMMENT PERIOD. THE COMMISSION SHALL DISCLOSE THE RISK
ADJUSTMENT MECHANISM TO CARRIERS BEFORE IT IS IMPLEMENTED.

(3) ANY RISK ADJUSTMENT MECHANISM THAT IS ADOPTED AND EACH
IMPLEMENTATION OF THE RISK ADJUSTMENT MECHANISM SHALL BE FILED WITH
THE INSURANCE COMMISSIONER.

- 539 -