HB0058 Keeven, Ronald P. Hall, Glenn et al

P R E F I L E D

HB 58 -- Health Care Reform

Co-Sponsors: Keeven and Hall

This bill addresses the cost of health care. In its main provisions, it:

(1) Includes any cost or premium for coverage under any policy, plan, or program which the employer pays for medical benefits or health insurance on behalf of an employee, employee's spouse, or dependent as income to the employee for income tax purposes. In any taxable year beginning on or after January 1, 1996, the amount a resident taxpayer pays for health care during the taxable year can be deducted from Missouri adjusted gross income to the extent not included in state itemized deductions. Health care costs paid to the taxpayer's employer's cafeteria plan may not be deducted. A deduction from Missouri adjusted gross income may also be taken in all taxable years beginning on or after January 1, 1996, in the amount the resident taxpayer deposited in a medical savings account plus interest accruing to the account during the taxable year. Funds removed from a medical savings account may only be used for the individual's, individual's spouse, or dependent's health care costs. A taxpayer may deposit no more than $3,000 plus $500 per dependent in each taxable year. The Director of the Department of Revenue will establish the procedure for opening a medical savings account and for claiming a deduction on a tax return;

(2) Directs the Department of Insurance to develop and describe, by rule, 5 standard health insurance policies which may be offered. One of the policies will be the basic health benefit plan which is a lower cost benefit plan. None of the standard policies will restrict the choice of health care provider. After January 1, 1996, all health insurance policies must be in the form of one of the standard health insurance policies developed by the department. The director will choose private insurers to manage a separate level of catastrophic insurance coverage. Premiums for catastrophic coverage will be included in a standard health insurance policy's premium;

(3) Prohibits all health insurance policies sold or offered in this state from containing a pre-existing condition exclusion or a limitation period for particular services, unless the individual is transferring to a policy with higher coverage after January 1, 1996. Health insurance premium rates may vary according to age, sex, and geographic area. Existing policyholders and new applicants of the same age, sex, and geographic area will be charged the same premium rate. Policies may not be cancelled or refused renewal by the insurer, except in cases of nonpayment of premium, fraud, or misrepresentation;

(4) Requires employers of Missouri residents, after January 1, 1996, to withhold premiums for a standard health insurance policy for each employee not otherwise covered by a standard health insurance policy and send the premiums to the employee's insurer;

(5) Requires all persons who are at least 18 years old or emancipated minors to purchase a standard health care policy if they are not otherwise covered by such a policy. Persons who cannot afford to buy a standard policy may apply to the Department of Social Services for medical assistance benefits or financial assistance for paying the standard health care policy premium. Failure to purchase a standard policy is an infraction and subjects the individual to a $200 fine;

(6) Changes the statute of limitations for minors involved in actions against physicians, hospitals, and other health care providers as described in the bill. Currently, a minor under 10 has until his or her twelfth birthday to bring such an action. The bill requires a minor under 6 to bring action by his or her tenth birthday;

(7) Requires all actions against physicians, hospitals, and other health care providers as described in the bill to be commenced no more than 4 years after the act of neglect. Current law requires commencement of such an action within 10 years of the act of neglect;

(8) Reduces the damage cap in actions against a health care provider for personal injury or death from $300,000 per

occurrence for noneconomic damages from any one defendant to $250,000 per occurrence for noneconomic damages from any one defendant;

(9) Repeals current law which allows the limitation on damage caps to be increased or decreased on an annual basis according to the Implicit Price Deflator for Personal Consumption Expenditures;

(10) Limits the amount of damages a plaintiff may recover from a manufacturer or seller of health care products approved by the FDA for personal injury or death arising out of the use of a health care product to $250,000 per occurrence for noneconomic damages from any single defendant;

(11) Changes the standard a plaintiff must prove in an award of punitive damages against a health care provider from clear and convincing evidence that the health care provider demonstrated willful, wanton, or malicious misconduct to clear and convincing evidence that the harm suffered was the result of conduct manifesting conscious, flagrant indifference to the health of the plaintiff;

(12) Requires the court to direct inadequately insured judgment debtors in actions against a health care provider for damages for personal injury or death due to the rendering of or failure to render services to post security or purchase an annuity adequate to assure full payment of damages. Current law permits the court to do so;

(13) Places a limit on attorney's fees in actions against health care providers for damages for personal injury or death arising out of the rendering or failure to render health care services; and

(14) Makes it a class C felony to knowingly:

(a) make or cause to be made any false claim for payment of a health care benefit;

(b) submit a claim for a health care benefit which was not used by, or on behalf of, the claimant;

(c) present multiple claims for payment of the same health care benefit with an intent to defraud; or

(d) make or cause to be made any false or fraudulent material statement or material representation for the purpose of obtaining or denying any health care benefit.

The bill has an effective date of January 1, 1996.