Health insurance bills stalled by strong opposition
by Marion Davis

as appeared in the Providence Business News on April 25th, 2005

A package of bills designed to make Rhode Island's individual health insurance market more welcoming for commercial carriers has met with strong opposition at the General Assembly, with only one, very narrow bill so far gaining committee approval.

The bills' proponents, the Rhode Island Association of Health Underwriters (RIAHU), carrier Assurant Health and state Sen. Marc Cote (D-Woonsocket), who sponsored the package say they're not giving up yet, and they hope to reach compromises with critics and get bills passed.

One of the most controversial item, however; to eliminate the Rhode Island's strict rate approval system, with public hearings and review by the attorney general's insurance advocate, in favor of a so-called "file and use" system, compromise may be impossible.

Attorney General Patrick C Lynch who personally testified against that bill and calls it "utterly offensive" in its disregard for consumers, said he's willing to "look at any changes" but short of radical revision, "I intend to kill this piece of legislation and I would implore every good faithed legislator who cares about their constituents to do the same."

Cote's package is modeled after health insurance reforms instituted in New Hampshire - not the now reviled SB110, a small group market reform that many say cost Gov. Craig Benson his job but SB118, which lessened regulations and created a high risk pool.

Rhode Island law currently requires individual market insurers to take all comers and rate their individual clientele as a group (using "community rating"), though it does still allow for preferred rates for people wh0o meet certain health standards. None of Cote's bills remove the guaranteed issue requirement though by definition, a high risk pool is for those rejected by carriers.

Two other bills within the package would address Rhode Island -specific issues, exempting preferred-provider organizations (PPOs) from a low that holds HMOs liable for the quality of care provided to subscribers, and allowing carriers who leave the state to return within three years, rather than the current five.

Only the latter measure has gotten anywhere so far: while the Senate Health and Human Services Committee tabled it, the House Corporations Committee approved an identical bill; the full House is scheduled to vote on it on Wednesday.

But that alone would not be enough to attract carriers back to Rhode Island said Emily Harding principal of Health Plan Specialists, a Newport Brokerage, and founder of RIAHU . "We need some version of the whole package," she said. As she sees it. Rhode Island health insurance market is excessively regulated and uncompetitive, and that's why only Blue Cross and Blue Shield of Rhode Island, which is required by law to offer individual insurance, is the only one doing it.

"It's a case of less is more," she said. If we had less health insurance regulations, we'd have more carriers, more affordable health insurance, and a better environment and marketplace"

Harding's best case scenario would have been to get approval for Cote's bills as filed, but she acknowledged that "it just wasn't going to happen that way."

So now she and Cote said they are reaching out to the bills critics and working with the governor's office and Health Insurance Commissioner Christopher F. Koller to try to forge a compromise.

All four of Cote's bills have been "held for further study" by the Senate Health and Human Services Committee, but under Senate Rules, that doesn't mean, they can't be amended and heard again. Even the Senate's May 5th deadline for committee approvals isn't binding, spokesman Greg Pare said, because the Senate president can always request that a bill be heard.

Harding said that she's "optimistic that we can get something done this year."

In a separate interview, Cote was a bit more guarded, saying he hopes "we will achieve some successes" this session," but adding that "if we feel there are some unfinished agenda items...then we will just follow through with it next session."

Asked what specific changes they were contemplating, Cote said it was too premature to say but Harding did offer an example: Perhaps the "file and use"
bill she said, might be restricted to for-profit carriers in the individual market, which would keep Blue Cross tightly regulated

Asked if that would suffice to get his support, Lynch laughed.

"Oh my God. Do I even have to respond to that?" he said. Not only would that buy into the fallacy that Blue Cross is the big evil entity in Rhode Island," he said but it would deprive consumers of protection from all other carriers.

"We want to create an atmosphere for insurance companies, as many as possible, to function and prosper in Rhode Island, but we don't want to give them the keys to the city," Lynch said