FRANKFORT, Ky. (March 3, 2004) - Legislation to improve the competitive environment among insurance carriers and to encourage other insurers to return to Kentucky passed its first legislative hurdle today. The House Banking and Insurance Committee unanimously passed House Bill 650 and sent the measure to the full House.

"We believe these initiatives have the potential to improve the health insurance market, attract additional insurers to Kentucky and foster more competition in the insurance marketplace," stated Governor Ernie Fletcher. "Some elements would reduce administrative costs for companies, which should have a direct impact on premiums and give consumers more choices. Other elements will make the Kentucky market more like the nation as a whole, giving companies the uniformity they desire."

This proposal represents the initial step in the Fletcher Administration’s effort toward several improvements in the health insurance market. These initiatives were included in Gov. Fletcher’s "Prescription for Kentucky" - his blueprint for state government that was issued during his campaign.

HB 650, a joint effort by the Cabinets for Health and Family Services and Environmental and Public Protection, is sponsored by Reps. Jim Bruce, D-Hopkinsville and Jim Gooch, D-Providence. The bill will open up market opportunities for associations that are not employer-related. It imposes a statutory moratorium on new state-mandated benefits for three years. Federally mandated benefits would not be subject to this moratorium. State Sen. Julie Denton, R-Louisville, is sponsoring a companion bill in the Senate.

The legislation seeks to streamline and simplify the administrative burdens on health insurance carriers. These simplifications are in the areas of required product mandates, the rate approval process as well as overall simplification for the health plans in the preferred provider organization (PPO) market.

"Governor Fletcher has asked the Cabinet for Health and Family Services to coordinate health care matters - including health insurance. We will work with the Environmental and Public Protection Cabinet to address the critical issues of making improvements in Kentucky’s health insurance market," said Dr. James Holsinger Jr., secretary of the Cabinet for Health and Family Services. "We see this as a first step in making improvements for the carriers currently in Kentucky’s market as well as making changes that will attract new carriers."

"The committee’s action is a good, first step in fulfilling Gov. Fletcher’s commitment to offer Kentuckians additional choices in the health insurance market," said LaJuana S. Wilcher, secretary of the Environmental and Public Protection Cabinet. "The administration is committed to removing unreasonable barriers to competition."

The state Office of Insurance is working with Gov. Fletcher to convene an insurers’ forum in the next few months.

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