2018 -- S 2934 SUBSTITUTE A

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LC005817/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- HEALTH CARE--HEALTH

INSURANCE

     

     Introduced By: Senator Joshua Miller

     Date Introduced: May 29, 2018

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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CHAPTER 157.1

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RHODE ISLAND MARKET STABILITY AND REINSURANCE ACT

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     42-157.1-1. Short title and purpose.

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     (a) This chapter shall be known and may be cited as the "Rhode Island Market Stability

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and Reinsurance Act."

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     (b) The purpose of this chapter is to authorize the director to create the Rhode Island

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reinsurance program to stabilize health insurance rates and premiums in the individual market and

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provide greater financial certainty to consumers of health insurance in this state.

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     (c) Nothing in this chapter shall be construed as obligating the state to appropriate funds

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or make payments to carriers.

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     42-157.1-2. Definitions.

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     As used in this chapter:

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     (1) "Director" means the director of the Rhode Island health benefits exchange.

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     (2) "Exchange" means the Rhode Island health benefits exchange established within the

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department of administration by § 42-157-1.

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     (3) "Health insurance carrier" or "carrier" has the same meaning as it does in § 27-18.5-2.

 

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     (4) "Health insurance coverage" has the same meaning as it does in § 27-18.5-2.

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     (5) "Individual market" has the same meaning as it does in §27-18.5-2.

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     (6) "Office of the health insurance commissioner" means the entity established by § 42-

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14.5-1 within the department of business regulation.

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     (7) "Program" means the Rhode Island reinsurance program established by § 42-157.1-3.

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     (8) "Program fund" or "fund" means the fund established by § 42-157.1-5.

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     (9) "State" means the state of Rhode Island.

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     42-157.1-3. Establishment of the Rhode Island reinsurance program.

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     (a) The director is authorized to establish and implement a state-based reinsurance

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program, to be known as the Rhode Island reinsurance program:

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     (1) To provide reinsurance to carriers that offer health insurance coverage on the

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individual market in the state;

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     (2) That meets the requirements of a waiver approved under 42 U.S.C. § 18052; and

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     (3) That is consistent with state and federal law.

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     (b) The program is intended to mitigate the impact of high-risk individuals on health

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insurance rates offered in the individual insurance market on and off of the exchange.

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     (c) The director is authorized to establish reinsurance payment parameters for calendar

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year 2020 and each subsequent calendar year that include:

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     (1) An attachment point;

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     (2) A coinsurance rate; and

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     (3) A coinsurance cap.

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     (d) Carriers must provide the exchange and the office of the health insurance

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commissioner with data the director prescribes by rules and regulations as necessary to determine

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reinsurance payments in a time and manner determined by the director.

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     (e) The director may alter the parameters established in accordance with §§ 42-157.1-3(c)

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and 42-157.1-3 (d) as necessary to secure federal approval for a waiver submitted in accordance

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with § 42-157.1-6.

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     42-157.1-4. Powers of the director.

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     (a) The director may:

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     (1) Contract with the federal government or another unit of government to ensure

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coordination of the program;

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     (2) Apply for any available federal funding for the program;

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     (3) Undertake, directly or through contracts with other persons or entities, studies or

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demonstration programs to develop awareness of the benefits of this chapter; and

 

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     (4) Formulate general policy and adopt rules and regulations that are reasonably

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necessary to administer this chapter, including regulations establishing a reinsurance program to

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mitigate the impact of high-risk individuals on health insurance rates.

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     42-157.1-5. Establishment of program fund.

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     (a) A fund shall be established to provide funding for the operation and administration of

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the program in carrying out the purposes of the program under this chapter.

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     (b) The director is authorized to administer the fund.

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     (c) The fund shall consist of:

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     (1) Any pass-through funds received from the federal government under a waiver

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approved under 42 U.S.C. § 18052;

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     (2) Any funds designated by the federal government to provide reinsurance to carriers

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that offer individual health benefit plans in the state;

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     (3) Any funds designated by the state to provide reinsurance to carriers that offer

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individual health benefit plans in the state; and

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     (4) Any other money from any other source accepted for the benefit of the fund.

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     (d) Nothing in this chapter shall be construed as obligating the state to appropriate funds

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or make payments to carriers.

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     42-157.1-6. State innovation waiver.

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     In accordance with § 42-157-5, the director may apply to the United States Secretary of

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Health and Human Services under 42 U.S.C. § 18052, for a state innovation waiver to implement

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the program and seek federal pass-through funding for calendar years beginning January 1, 2020,

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and future years, to maximize federal funding.

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     42-157.1-7. Program contingent on federal waiver and appropriation of state

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funding.

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     If the state innovation waiver request in § 42-157.1-6 is not approved, the director shall

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not implement the program or provide reinsurance payments to eligible carriers.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- HEALTH CARE--HEALTH

INSURANCE

***

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     This act would establish the Rhode Island reinsurance program that will provide

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reinsurance to insurance carriers that offer health insurance coverage on the individual market, to

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mitigate the impact of high-risk individuals on health insurance rates. The director of the Rhode

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Island health benefits exchange would be authorized to establish payment parameters for this

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program.

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     This act would take effect upon passage.

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