DCBS Media Release
September 25, 1996
Health insurance reforms to take effect October first
(Salem) The 400,000 Oregonians who do not have health insurance, the 560,000 who change or lose their jobs each year, and thousands of small businesses across the state need to know that a new law going into effect on October 1, 1996, could make it easier for them to get coverage or to offer it to their employees.
"Despite the fact that Oregon is well ahead of the national curve on health insurance reform, too many Oregonians still don't have health insurance," Oregon Insurance Commissioner Kerry Barnett said. "The changes we're implementing on October 1st make real progress in three crucial areas; availability of coverage, whether you're healthy or sick; portability of coverage; and equitable premium rates."
S.B. 152, which the Oregon Legislature enacted and Governor Kitzhaber signed in 1995, implements a series of reforms for group and individual health insurance coverage, plus "portability" reforms for individuals who lose their eligibility for group coverage. The reforms in SB 152 are more extensive than those recently passed by Congress (the Kennedy-Kassebaum Act), and the federal reforms do not take effect until the middle of next year. The new state law addresses four basic areas of reform:
These are the most talked-about reforms, and apply to anyone who loses health insurance coverage under a group plan – if they leave their job, for instance – as long as they have been covered for at least six months in Oregon. S.B. 152 requires insurance carriers to offer these Oregonians at least two options (low cost and average cost) for continued coverage for as long as they need it. This addresses the most common concern expressed by the 87 percent of Oregon residents who currently have health insurance: that they can be cut out of the system if they lose or leave their job.
Small Group Reforms
These changes build on small group reforms enacted by the legislature in 1991 by significantly expanding the availability of coverage to small employers (those with 2-25 employees). Carriers cannot reject a small employer for any health insurance plan they offer, and they must include a state-approved basic health care plan among their offerings. S.B. 152 also requires carriers to charge the same average premium to all small employers, adjusted only for differences in member age. These reforms make the small group market more like the large group market – more choices and more stability in rates.
These reforms apply to all group policies with two or more members, and eliminate a range of discriminatory practices. Under S.B. 152, insurance carriers cannot refuse to cover or impose different coverage terms on a group member based on that person's health status. Carriers also cannot exclude pre-existing medical conditions from coverage for more than six months, cannot exclude pre-existing conditions at all if the enrollee has had coverage for the past six months, and cannot treat pregnancy as a pre-existing condition.
Individual Market Reforms
These reforms specify that insurance carriers must use a standardized health statement to determine whether they will accept or reject applicants, and they prohibit policy exclusions or limitations that are based on the health status of an enrollee. As with group plans, individual policies must use the standard six-month preexisting conditions clause, with credit for prior coverage. And, like small employer plans, all enrollees must be charged the same average premium rates, adjusted only for differences in age.
"The reforms put in place by S.B. 152 are particularly important for small employers who want to offer coverage to their workers but could not afford to in the past," Commissioner Barnett said. "but these reforms also offer critical support for women's health issues: the bill eliminates gender-based rating in setting premiums, and prohibits insurers from treating pregnancy as a pre-existing condition in all group policies."