PETITION OF:

SECTION 1. Section one of Chapter 175 of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting the following new definitions:-

“Flexible health benefit policy” means a health insurance policy that in whole or in part, does not offer state mandated health benefits.

“State mandated health benefits" means coverage required or required to be offered in the general or special laws as part of a policy of accident or sickness insurance that:

1. includes coverage for specific health care services or benefits;

2. places limitations or restrictions on deductibles, coinsurance, copayments, or

any annual or lifetime maximum benefit amounts; or

3. includes a specific category of licensed health care practitioner from whom an

insured is entitled to receive care.

“Policy of Accident and Sickness Insurance,” any policy or contract covering the kind or kinds of insurance described in subdivisions (a) through (d) of the sixth paragraph of section 47 of this chapter.

SECTION 2. Section 108 of chapter 175 of the General Laws, as so appearing, is hereby further amended by adding the following new paragraph at the end thereof:-

A carrier authorized to transact individual policies of accident or sickness insurance under this section may offer a flexible health benefit policy, provided however, that for each sale of a flexible health benefit policy the carrier shall provide to the prospective policyholder written notice describing the state mandated health benefits that are not included in the policy and provide to the prospective individual policyholder the option of purchasing at least one health insurance policy that provides all state mandated health benefits.

SECTION 3. Section 110 of chapter 175, as so appearing, is hereby amended by inserting the following new paragraph at the end thereof:-

A carrier authorized to transact group policies of accident or sickness insurance under this section may offer one or more flexible health benefit policies; provided however, that for each sale of a flexible health benefit policy the carrier shall provide to the prospective group policyholder written notice describing the state mandated benefits that are not included in the policy and provide to the prospective group policyholder the option of purchasing at least on health insurance policy that provides all state mandated benefits. The carrier shall provide each subscriber under a group policy upon enrollment with written notice stating that this a flexible health benefit policy and describing the state mandated health benefits that are not included in the policy.

SECTION 4. Chapter 176A of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting the following new section:-

Section 1D. Definitions

The following words, as used in this chapter, unless the text otherwise requires or a different meaning is specifically required, shall mean-

“Flexible health benefit policy” means a health insurance policy that in whole or in part, does not offer state mandated health benefits.

"State mandated health benefits" means coverage required or required to be offered

in the general or special laws as part of a policy of accident or sickness insurance that:

1. includes coverage for specific health care services or benefits;

2. places limitations or restrictions on deductibles, coinsurance, copayments, or

any annual or lifetime maximum benefit amounts; or

3. includes a specific category of licensed health care practitioner from whom an

insured is entitled to receive care.

SECTION 5. Section 8 of chapter 176A of the General Laws, as so appearing, is hereby further amended by adding the following paragraphs at the end thereof:-

(h) A non-profit hospital service corporation authorized to transact individual policies of accident or sickness insurance under this section may offer a one flexible health benefit policy, provided however, that for each sale of a flexible health benefit policy the non-profit hospital service corporation shall provide to the prospective policyholder written notice describing the state mandated health benefits that are not included in the policy and provide to the prospective individual policyholder the option of purchasing at least one health insurance policy that provides all state mandated health benefits.

(i) A non-profit hospital service corporation authorized to transact group policies of accident or sickness insurance under this section may offer one or more flexible health benefit policies; provided however, that for each sale of a flexible health benefit policy the non-profit hospital service corporation shall provide to the prospective group policyholder written notice describing the state mandated benefits that are not included in the policy and provide to the prospective group policyholder the option of purchasing at least on health insurance policy that provides all state mandated benefits. The non-profit hospital service corporation shall provide each subscriber under a group policy upon enrollment with written notice stating that this a flexible health benefit policy and describing the state mandated health benefits that are not included in the policy.

SECTION 6. Section one of Chapter 176B of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting the following new definitions:-

“Flexible health benefit policy” means a health insurance policy that in whole or in part, does not offer state mandated health benefits.

"State mandated health benefits" means coverage required or required to be offered in the general or special laws as part of a policy of accident or sickness insurance that:

1. includes coverage for specific health care services or benefits;

2. places limitations or restrictions on deductibles, coinsurance, copayments, or

any annual or lifetime maximum benefit amounts; or

3. includes a specific category of licensed health care practitioner from whom an

insured is entitled to receive care.

SECTION 7. Section 4 of chapter 176B of the General Laws, as so appearing, is hereby further amended by adding the following paragraphs at the end thereof:-

A medical service corporation authorized to transact individual policies of accident or sickness insurance under this chapter may offer a one flexible health benefit policy, provided however, that for each sale of a flexible health benefit policy the medical service corporation shall provide to the prospective policyholder written notice describing the state mandated health benefits that are not included in the policy and provide to the prospective individual policyholder the option of purchasing at least one health insurance policy that provides all state mandated health benefits.

A medical service corporation authorized to transact group policies of accident or sickness insurance under this section may offer one or more flexible health benefit policies; provided however, that for each sale of a flexible health benefit policy the medical service corporation shall provide to the prospective group policyholder written notice describing the state mandated benefits that are not included in the policy and provide to the prospective group policyholder the option of purchasing at least on health insurance policy that provides all state mandated benefits. The medical service corporation shall provide each subscriber under a group policy upon enrollment with written notice stating that this a flexible health benefit policy and describing the state mandated health benefits that are not included in the policy.

SECTION 8. Section one of Chapter 176G of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting the following new definitions:-

“Flexible health benefit policy” means a health insurance policy that in whole or in part, does not offer state mandated health benefits.

"State mandated health benefits" means coverage required or required to be offered in the general or special laws as part of a policy of accident or sickness insurance that:

1. includes coverage for specific health care services or benefits;

2. places limitations or restrictions on deductibles, coinsurance, copayments, or

any annual or lifetime maximum benefit amounts; or

3. includes a specific category of licensed health care practitioner from whom an

insured is entitled to receive care.

SECTION 9. Section 4 of chapter 176G of the General Laws, as so appearing, is hereby further amended by adding the following paragraph at the end thereof:-

A health maintenance organization authorized to transact individual policies of accident or sickness insurance under this chapter may offer a one flexible health benefit policy, provided however, that for each sale of a flexible health benefit policy the health maintenance organization shall provide to the prospective policyholder written notice describing the state mandated health benefits that are not included in the policy and provide to the prospective individual policyholder the option of purchasing at least one health insurance policy that provides all state mandated health benefits.

SECTION 10. Chapter 176G, as so appearing, is hereby further amended by inserting the following new section:

Section 4A. A health maintenance organization authorized to transact group policies of accident or sickness insurance under this chapter may offer one or more flexible health benefit policies; provided however, that for each sale of a flexible health benefit policy the health maintenance organization shall provide to the prospective group policyholder written notice describing the state mandated benefits that are not included in the policy and provide to the prospective group policyholder the option of purchasing at least on health insurance policy that provides all state mandated benefits. The health maintenance organization shall provide each subscriber under a group policy upon enrollment with written notice stating that this a flexible health benefit policy and describing the state mandated health benefits that are not included in the policy.

SECTION 11. Chapter 176M of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting in section one the following new definitions:-

“Flexible health benefit policy” means a health insurance that, in whole or in part, does not offer state mandated health benefits.

"State mandated health benefits" means coverage required to be offered any general or special law that:

1. includes coverage for specific health care services or benefits;

2. places limitations or restrictions on deductibles, coinsurance, copayments, or

any annual or lifetime maximum benefit amounts; or

3. includes a specific category of licensed health care practitioner from whom an

insured is entitled to receive care.

SECTION 12. Section 2 of said chapter 176M is hereby amended by striking out the first sentence of paragraph (d) and inserting in place thereof the following:

A carrier that participates in the nongroup health insurance market shall make available to eligible individuals a standard guaranteed health plan established pursuant to paragraph (c) and may additionally make available to eligible individuals no more than two alternative guaranteed issue health plans, one of which may be a flexible health benefit policy, with benefits and cost sharing requirements, including deductibles, that differ from the standard guaranteed issue health plan.

SECTION 13. Chapter 118G of the General Laws, as so appearing in the 2002, is hereby amended by adding at the end thereof the following new section:-

Section 24. The division, in consultation with other relevant state agencies, shall conduct a review and evaluation of all existing mandated health benefits and shall report its findings to the joint committees on health care and insurance on or before December 1, 2005. For the purpose of this section, “existing mandated health benefits” shall have the same meaning as a “mandated health benefit proposal” in paragraph (a) of section 38C of chapter 3 of the General Laws.

The division shall enter into interagency agreements as necessary with the division of medical assistance, the group insurance commission, the department of public health, the division of insurance, and other state agencies holding utilization and cost data relevant to the division’s review. Such interagency agreements shall require that the data shared under the agreements is used solely in connection with the division’s review under this section, and that the confidentiality of any personal data is protected. The division may also require data from insurers licensed or otherwise authorized to transact accident or health insurance under chapter 175, nonprofit hospital service organizations organized under chapter 176A, nonprofit medical service corporations organized under chapter 176B, health maintenance organizations organized under chapter 176G and their industry organizations to complete its analysis. The division may contract with an actuary, or economist as necessary to complete its analysis. The division shall reference all information pertaining to cost, utilization and outcomes that it examines in conducting its review and make it available upon request.

The report shall include an evaluation of the medical efficacy of mandating the benefit, including the impact of the benefit to the quality of the patient care and health status of the population and the results of any research demonstrating the medical efficacy of the treatment or service compared to alternative treatments or services, or not providing the service or treatment; and the increase in insurance premiums, if any, resulting from mandating the coverage of this service or treatment and any other relevant information that would be useful in evaluating the mandated health benefit. Costs associated with the mandate shall be evaluated based on the experience of the prior five years, or from the date the mandate is passed, if in existence less than five years. The report may include a recommendation to repeal any mandate that is no longer justified as to cost effectiveness, medical efficacy or safety.

This process shall be repeated every five (5) years.

SECTION 14. Subsection (b) of section 38C of Chapter 3 of the General Laws is hereby amended by inserting at the end thereof the following:

Notwithstanding the foregoing or any general or special law or regulation to the contrary, no mandated health benefit bill shall be reported favorably by any joint committee of the general court or the house or senate committees on ways and means, unless and until the rate of increase in the Consumer Price Index (CPI) for medical care services as reported by the United States Bureau of Labor Statistics remains at zero or below zero for two consecutive years. The Division of Health Care Finance and Policy shall file an annual report with the house and senate committees on ways and means, the joint committee on insurance and the joint committee on health care no later than the last day of January for the previous year certifying the rate of increase in the CPI for medical care services.