New law will help protect against insurance premium hikes
STATE HOUSE – Legislation passed by the General Assembly to help keep health insurance premiums down has been signed into law.
The legislation (2018-S 2934A, 2018-H 8351), called the Rhode Island Market Stability and Reinsurance Act and sponsored by Senate Health and Human Services Committee Chairman Joshua Miller and Rep. John G. Edwards, is meant to help stabilize health insurance rates and premiums in the individual market and to provide greater financial certainty to consumers. Reinsurance helps reduce the size of premium increases by paying for some of the most expensive claims for some consumers in the individual market.
“This law will help address the high cost of health insurance for consumers and help ensure that those with health issues will be able to get coverage, particularly in light of efforts in Washington to undermine the Affordable Care Act. Every way we can lower costs overall and costs to individual patients is an improvement that makes the costs of maintaining good health more achievable to Rhode Islanders,” said Senator Miller (D-Dist. 28, Cranston, Providence).
The new law authorizes HealthSource RI, Rhode Island’s health insurance exchange, to establish reinsurance to insurance carriers that offer health insurance coverage on the individual market, to mitigate the impact of high-risk individuals on the health insurance rates that consumers pay. The program would depend on the approval of a state innovation waiver from the federal government. This bill did not commit any state funding, but allows HealthSource RI to begin the data analysis, program design and the federal waiver application process. Federal Affordable Care Act savings (realized by lower premiums) and matching funding from other sources are to be identified and proposed separately through legislation next year.
The new law, which passed the General Assembly June 23 and was signed by Gov. Gina M. Raimondo July 3, was recommended by a workgroup convened this spring by the Office of the Health Insurance Commissioner (OHIC) and HealthSource RI to study how to mitigate potential impact of federal changes on health coverage costs, consumer choice and access.
“Reinsurance is a way to help avoid large, across-the-board health insurance premium increases. When insurers aren’t at risk for absorbing the exceptionally expensive medical costs of the few subscribers who have them, they don’t have to set their premiums for everyone quite so high. The result is lower costs for subscribers,” said Representative Edwards (D-Dist. 70, Tiverton, Portsmouth).
Senator Miller was also the sponsor of two other bills concerning health insurance that passed the Senate, but not the House. Both were recommendations from the Office of the Health Insurance Commissioner and HealthSource RI’s recently convened a Market Stability Workgroup, whose goal was to identify sensible, state-based policy options to protect Rhode Island’s progress under the ACA and to safeguard our health insurance markets. The first (2018-S 2931) would define short-term limited duration health insurance policies under the authority of OHIC, requiring them to comply with consumer protection standards that apply to all plans in the individual market. Short-term limited duration insurance policies are products for individuals who experience a gap in insurance coverage, and under current law, they are specifically excluded from these consumer protections.
The other (2018-S 2785Aaa) would authorize the state to seek a federal waiver under the ACA to allow sole proprietors and the self-employed to purchase their health insurance in the small group market instead of the individual market, as they were allowed until 2016, enact a list of 10 essential health benefits that all health insurance policies would be required to provide, and mandate that preventive services be provided without patient cost-sharing.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903