practice to large groups.20 Another court has found no unfair discrimination where insurers used HIV testing results to deny coverage because HIV-positive individuals were held not to be in the "same class" as persons who did not test positive for HIV.21

Coverage and Mandates

States seek also to regulate the type of health insurance coverage that is available to their residents. Many require health insurers to offer specified benefits or to make payments to particular types of practitioners. One recent survey of these laws reports that 992 requirements in various states are applicable to some or all types of health insurance.22 Known as "mandates," these laws typically follow two approaches. The first involves mandated coverage for specific conditions such as premature birth or substance abuse and dependency. The second type of mandate specifies those practitioners such as nurse midwives or optometrists who may receive payment under group health insurance policies.

In some states where concern for the availability of insurance for small employers and for uninsured individuals has commanded legislative attention, states have abandoned their emphasis on mandates in favor of so-called "bare bones" policies.23 These policies offer a limited array of basic benefits and are intended to provide an affordable alternative to group health policies whose cost has been increased by mandated benefits.

Managed Care

States also regulate insurance like, or risk-assuming, entities in what has come to be called managed care. In a broad sense, managed care involves organized systems of cost containment achieved through management of consumer and provider patterns of consumption of health care services. HMOs and PPOs are the most widely regulated types of managed care organizations. Cost containment methods in managed care vary widely, and state regulatory activities are equally varied in scope and intensity. For example, some states do not regulate PPOs that do not assume risk.

To protect the public against insolvency, undertreatment, and poor quality care, state regulators rely upon initial licensing and ongoing supervision that address these concerns. Typically, state laws prohibit any person from offering or establishing an HMO or risk-assuming PPO without obtaining a license.24 Some regulation of HMOs and PPOs has, historically, been intended to protect conventional health care providers and discourage prepaid group practices and network health plans. (See Chapter 2 of this report.)

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