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H 7346Health Insurance

Insurance - Accident and Sickness Insurance Policies

This bill prohibits certain merged insurance companies from paying healthcare providers less than the state-approved Medicaid reimbursement rate.

Held for study
Population
Affected
35
Email Legislator
Introduced Jan 28, 2026Committee House Health & Human Services

Plain-English Summary

This legislation amends existing insurance laws to regulate the payment rates of specific insurance companies—specifically those formed by the merger or acquisition of nonprofit hospital or medical service corporations. The bill mandates that these insurance companies 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. Additionally, these companies must submit an accounting to the insurance commissioner under oath at least 30 days before implementing rates to demonstrate compliance with this rule.

For younger readers

Imagine you have a lemonade stand. Usually, people pay you different amounts for a cup. This law creates a rule for big insurance companies that pay doctors and hospitals. It says these companies are not allowed to pay the doctors less money than the government pays for people who need extra help (a program called Medicaid). This makes sure that doctors and hospitals get paid at least a specific minimum amount for their work, so they don't lose too much money when treating patients covered by these big companies.

Who & Where It Applies

Impacted groups
Insurance CompaniesHealthcare Providers (Doctors/Hospitals)PolicyholdersExecutive Office of Health and Human ServicesOffice of the Health Insurance Commissioner
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Prevents large corporate insurers from utilizing their market power to drive provider reimbursement rates below the safety-net standard of Medicaid, ensuring a baseline of financial stability for healthcare providers.
  • Protects the healthcare infrastructure in underserved communities by ensuring that providers are not forced to accept unsustainable payment rates from dominant market players.
  • Increases transparency and corporate accountability by requiring insurers to submit sworn accounting documentation to the insurance commissioner to prove compliance with payment standards.
  • Medicaid rates are historically very low and often do not cover the actual cost of care; anchoring private rates to this floor might inadvertently encourage insurers to lower payments to match this minimum.
  • The legislation may lead to higher insurance premiums for working-class families if insurance companies pass the mandatory minimum costs directly to policyholders.
  • It only applies to specific types of merged or acquired insurance entities rather than establishing a fair reimbursement standard for the entire insurance industry.
For Conservatives
  • Protects small business owners (private medical practices) from being bullied into accepting devastatingly low reimbursement rates by massive, consolidated insurance corporations.
  • Ensures the viability of the healthcare supply chain by preventing insurers from undercutting the market to the point where services become unavailable.
  • Requires strict accountability from corporate entities by mandating sworn submissions to regulators, discouraging deceptive business practices.
  • Represents government interference in the free market by dictating price controls on private contracts between insurance companies and service providers.
  • Will likely result in increased insurance premiums for consumers as companies adjust pricing to accommodate government-mandated payment floors.
  • Expands the regulatory authority of the state insurance commissioner and creates more bureaucratic red tape for businesses attempting to operate in the state.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 15 additions · 4 deletions

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 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.