Bill Sponsors
Bissaillon, Ciccone, Tikoian, Gallo, Murray, and DiMario
Committee
Senate Health & Human Services
Summary
Select
This legislation amends Rhode Island insurance laws regarding health insurance rates. It specifically targets insurance companies that are organized as stock or mutual corporations that merge with, acquire, or control nonprofit hospital service corporations, medical service corporations, or health maintenance organizations (HMOs). The bill mandates that these insurance entities cannot pay healthcare providers a reimbursement rate that is lower than the approved Medicaid rate set by the state's Executive Office of Health and Human Services. It establishes a floor for provider payments in these specific corporate acquisition scenarios.
Sponsor
Analysis
Pros for Progressives
- Protects healthcare providers, including those serving vulnerable populations, from being squeezed by large corporate insurers who might otherwise leverage their market power to lower reimbursement rates below sustainable levels.
- Ensures that the privatization or consolidation of nonprofit health entities does not result in a "race to the bottom" regarding provider compensation, maintaining a baseline of financial stability for the healthcare workforce.
- Prevents for-profit entities from undercutting public payment standards, thereby reinforcing the legitimacy and baseline value of the Medicaid rate structure within the broader healthcare market.
Cons for Progressives
- Tying the minimum payment to Medicaid rates, which are historically low, might inadvertently validate these low rates as an acceptable standard for private insurers rather than pushing for fair market value.
- Does not mandate that insurance companies pay *more* than Medicaid, potentially leaving providers struggling financially if the Medicaid rate itself is insufficient to cover the actual cost of care.
- Applies only to specific types of corporate mergers and acquisitions, meaning other large private insurers are not bound by this rule and could potentially continue to reimburse at lower rates if not otherwise regulated.
Pros for Conservatives
- Protects small business owners (doctors and independent practices) from being financially crushed by the monopolistic bargaining power of massive insurance conglomerates.
- Ensures that private insurance companies pay their fair share to providers, reducing the likelihood that costs are shifted to taxpayers or other consumers to make up for underpayments.
- Promotes the stability of the local healthcare market by preventing aggressive corporate tactics that could force local hospitals and providers out of business.
Cons for Conservatives
- Institutes government price controls on private business transactions, interfering with the free market ability of companies to negotiate their own contracts and rates.
- Restricts the operational freedom of private corporations, potentially discouraging investment or business consolidation within the state due to heavy-handed regulation.
- Could lead to higher insurance premiums for consumers if insurance companies are forced to pay artificially mandated rates rather than market-driven rates.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Insurance companies
- Healthcare providers
- Hospitals
- Nonprofit medical service corporations
- Health Maintenance Organizations (HMOs)
Towns Affected
All
Cost to Taxpayers
None
Revenue Generated
None
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/16/2026 Introduced, referred to Senate Health and Human Services
Bill Text
SECTION 1. Section 27-18-54 of the General Laws in Chapter 27-18 entitled "Accident and Sickness Insurance Policies" is hereby amended to read as follows:
27-18-54. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or otherwise acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state;or (2) Charge to any party in the state any rate or premium, that takes into account or reflects in any manner the value of any contribution, distribution, or allocation the company expends or incurs in establishing or funding a charitable foundation organized to maintain or account for the assets of a nonprofit hospital service corporation, nonprofit medical service corporation, or health maintenance organization; or (3) Pay a rate that is less than the approved Medicaid rate set by the executive office of health and human services. For any rate that is to be charged to policy holders, regardless of whether the rate is subject to approval by a state agency under this or another chapter, the company shall at least thirty (30) days before implementing the rate submit under oath to the commissioner of insurance an accounting that documents the cost structure on which the rate is based and demonstrates the company’s compliance with this section.
SECTION 2. Section 27-19-30.1 of the General Laws in Chapter 27-19 entitled "Nonprofit Hospital Service Corporations" is hereby amended to read as follows:
27-19-30.1. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or otherwise acquires control of a nonprofit hospital service corporation organized under this chapter, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title, may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state, or; (2) Charge to any party in the state any rate or premium that takes into account or reflects in any manner the value of any contribution, distribution, or allocation the company expends or incurs in establishing or funding a charitable foundation organized to maintain or otherwise account for the assets of a nonprofit hospital service corporation, nonprofit medical service corporation, or health maintenance organization; or (3) Pay a rate that is less than the approved Medicaid rate set by the executive office of health and human services. For any rate that is to be charged to policyholders, regardless of whether the rate is subject to approval by a state agency under this or another chapter, the company shall at least thirty (30) days before implementing the rate submit under oath to the commissioner of insurance an accounting that documents the cost structure on which the rate is based and demonstrates the company’s compliance with this section.
SECTION 3. Section 27-20-25.2 of the General Laws in Chapter 27-20 entitled "Nonprofit Medical Service Corporations" is hereby amended to read as follows:
27-20-25.2. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with; acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of; or acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under this chapter, or a health maintenance organization organized under chapter 41 of this title may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state, or; (2) Charge to any party in the state any rate or premium, that takes into account or reflects in any manner the value of any contribution, distribution, or allocation the company expends or incurs in establishing or funding a charitable foundation organized to maintain or account for the assets of a nonprofit hospital service corporation, nonprofit medical service corporation, or health maintenance organization; or (3) Pay a rate that is less than the approved Medicaid rate set by the LC003844 - Page 2 of 4 executive office of health and human services. For any rate that is to be charged to policyholders, regardless of whether this rate is subject to approval by a state agency under this or another chapter, the company shall at least thirty (30) days before implementing the rate submit under oath to the commissioner of insurance an accounting that documents the cost structure on which the rate is based and demonstrates the company’s compliance with this section.
SECTION 4. Section 27-41-27.2 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" is hereby amended to read as follows:
27-41-27.2. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title: (1) May file with any state agency for review or approval any proposed rate to be used by the company in the state, or; (2) May charge to any party in the state any rate or premium, that takes into account or reflects in any manner the value of any contribution, distribution, or allocation the company expends or incurs in establishing or funding a charitable foundation organized to maintain or account for the assets of a nonprofit hospital service corporation, nonprofit medical service corporation, or health maintenance organization; or (3) Pay a rate that is less than the approved Medicaid rate set by the executive office of health and human services. For any rate that is to be charged to policyholders, regardless of whether this rate is subject to approval by a state agency under this or another chapter, the company shall at least thirty (30) days before implementing the rate submit under oath to the commissioner of insurance an accounting that documents the cost structure on which the rate is based and demonstrates the company’s compliance with this section.
SECTION 5. This act shall take effect on January 1, 2027.
27-18-54. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or otherwise acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state;
SECTION 2. Section 27-19-30.1 of the General Laws in Chapter 27-19 entitled "Nonprofit Hospital Service Corporations" is hereby amended to read as follows:
27-19-30.1. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or otherwise acquires control of a nonprofit hospital service corporation organized under this chapter, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title, may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state
SECTION 3. Section 27-20-25.2 of the General Laws in Chapter 27-20 entitled "Nonprofit Medical Service Corporations" is hereby amended to read as follows:
27-20-25.2. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with; acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of; or acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under this chapter, or a health maintenance organization organized under chapter 41 of this title may: (1) File with any state agency for review or approval any proposed rate to be used by the company in the state
SECTION 4. Section 27-41-27.2 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" is hereby amended to read as follows:
27-41-27.2. Health insurance rates.
No insurance company organized as a stock or mutual corporation that merges or consolidates with, acquires ownership or control or possession of twenty percent (20%) or greater of the operating assets of, or acquires control of a nonprofit hospital service corporation organized under chapter 19 of this title, a nonprofit medical service corporation organized under chapter 20 of this title, or a health maintenance organization organized under chapter 41 of this title: (1) May file with any state agency for review or approval any proposed rate to be used by the company in the state
SECTION 5. This act shall take effect on January 1, 2027.