SECTION 1. Short Title.
This act shall be known and may be cited as the "Rhode Island Health Trust Act."
SECTION 2. Legislative Findings and Purpose.
The general assembly finds and declares the following:
(1) Rhode Island residents increasingly cannot find primary care. Independent analysis indicates that the state needs at least three hundred (300) additional primary care providers. An analysis by researchers at Brown University and the Warren Alpert Medical School of the state All-Payer Claims Database identified approximately seven hundred (700) primary care providers for a population of roughly one million one hundred thousand (1,100,000) residents, or about one (1) clinician for every one thousand seven hundred (1,700) people.
(2) The shortage is deepening. One analysis found that even if every active provider carried a full panel of one thousand two hundred (1,200) patients, approximately three hundred forty-three thousand (343,000) Rhode Island residents would still lack a provider. A separate projection by the American Academy of Family Physicians estimated that the state will be short approximately one hundred (100) primary care providers by 2030, leaving roughly one (1) in five (5) residents unable to find one.
(3) In less than one (1) year, from the fall of 2024 to the middle of 2025, nearly thirty thousand (30,000) Rhode Island residents lost primary care to practice closures, including approximately twenty-five thousand (25,000) from the closure of a single practice, of whom roughly seven thousand (7,000) were children.
(4) The shortage falls hardest on those with the fewest resources. Approximately one-third (1/3) of Hispanic Rhode Island residents lack a reliable primary care provider, more than six (6) times the rate of white, non-Hispanic residents. Households earning less than twenty-five thousand dollars ($25,000) are more than four (4) times as likely to report no provider as households earning seventy-five thousand dollars ($75,000) or more. Fewer than half (1/2) of residents enrolled in Medicaid managed care received a regular wellness visit in 2024, compared to nearly seven (7) in ten (10) residents with commercial coverage.
(5) A principal cause is underpayment. The office of the health insurance commissioner found in its 2026 primary care report that commercial reimbursement for common primary care services is approximately thirty percent (30%) higher in Massachusetts than in Rhode Island in bordering communities. Leaders of the state's largest health system have stated publicly that Rhode Island payment rates are twenty percent (20%) to thirty percent (30%) below those of neighboring states and that the state cannot compete for clinical talent. A second cause is payment conduct, including the delay, denial, downcoding, and underpayment of valid claims.
(6) These conditions impose costs on the entire state. Rhode Island hospitals provided more than eighty-four million dollars ($84,000,000) in uncompensated care in 2024, much of it for conditions that became emergencies because care was not available earlier.
(7) The state has begun to act. The office of the health insurance commissioner is raising the commercial primary care spending target from four and seven-tenths percent (4.7%) of medical spending in 2024 toward ten percent (10%) by 2028, and has directed reductions in prior authorization. This act completes and secures that direction.
(8) Rhode Island's commercial insurance market is concentrated, dominated by two (2) carriers. Concentration enables sustained underpayment without competitive consequence.
(9) The purpose of this act is to keep and attract the providers Rhode Island residents need, and to guarantee that no resident loses coverage if an insurer withdraws from the market, through two (2) coordinated measures established in this single act: a Payer Mandate, set forth in section 3; and the Rhode Island Health Trust, set forth in section 4.
(10) The general assembly further finds and declares the following design principles, which shall govern the construction of this act:
(i) The Rhode Island Health Trust is a payer that operates alongside private insurers. It is not a single payer. No person's coverage is terminated on a single mandated date. The transition contemplated by this act is gradual and voluntary on the part of insurers.
(ii) This act imposes no payroll tax and no new tax on any worker or any business. The Rhode Island Health Trust is financed by assessments on the insurance industry, on the model the state has used since 1985 under chapter 34.3 of title 27, and by the redirected premiums of the members it receives. The assessment on insurers is a regulatory assessment on the business of insurance. The member premium is a private premium paid for coverage the member receives. Neither is a tax.
(iii) The core operation of the Rhode Island Health Trust, financed by the assessment and by redirected premiums, operates under the law of this state and requires no federal waiver and no federal appropriation to take effect. The Trust's mandatory enrollment is confined to the state-regulated commercial and individual market and does not reach any population whose coverage is funded or governed by Medicaid or Medicare.
(iv) Where federal law makes federal funds available on terms consistent with this act, including the advance premium tax credit and cost-sharing reductions that follow a member into a qualified health plan certified on HealthSource RI, and the Basic Health Program under Section 1331 of the Patient Protection and Affordable Care Act, the Rhode Island Health Trust may capture those funds to lower costs for members. Federal funds supplement the Trust. They do not condition its core operation, and a reduction or withdrawal of federal funds shall not impair the assessment-funded functions of the Trust.
(v) This act finances the Rhode Island Health Trust within the same act that establishes it, and does not defer financing to a future authorization.
(vi) This act regulates only what a licensed insurer pays a provider for a covered service. It does not regulate benefit design, coverage terms, or the administration of any employee benefit plan, and it does not require any employer to offer, to maintain, or to terminate any health plan. Self-funded employer plans governed by the federal Employee Retirement Income Security Act of 1974 are excluded from the scope of this act, as set forth in section 3.
(vii) The regulation of insurer reimbursement enacted by this act is a permissible exercise of the state's authority over the business of insurance, saved from federal preemption by the insurance savings clause of the federal Employee Retirement Income Security Act of 1974. The Supreme Court of the United States held unanimously in Rutledge v. Pharmaceutical Care Management Association, 592 U.S. 80 (2020), that a state law regulating the rates an insurer pays is not preempted by federal law.
SECTION 3. The Rhode Island Payer Mandate.
Title 27 of the General Laws is hereby amended by adding thereto the following chapter:
CHAPTER 27-[XX]
THE RHODE ISLAND PAYER MANDATE
§ 27-[XX]-1. Definitions.
As used in this chapter, unless the context requires otherwise:
(1) "Advance premium tax credit" and "cost-sharing reduction" mean the federal subsidies provided under 26 U.S.C. § 36B and section 1402 of the Patient Protection and Affordable Care Act, respectively.
(2) "Affordability standard" means a standard fixed by the commissioner by rule and expressed as a defined percentage of Rhode Island median household income, against which cost-sharing ceilings are indexed under section 27-[XX]-10.
(3) "Benchmark rate" means the regional median commercial reimbursement rate as determined annually by the commissioner under section 27-[XX]-4.
(4) "Clean claim" means a claim for payment for a health care service that may be processed without obtaining additional information from the provider of the service or from a third party, and that is submitted in the standard electronic transaction format required by the federal Health Insurance Portability and Accountability Act of 1996 and its implementing regulations. An insurer shall not impose any documentation or submission prerequisite beyond those standards as a condition of a claim being treated as clean.
(5) "Commissioner" means the health insurance commissioner established under chapter 14.5 of title 42.
(6) "Exchange" or "HealthSource RI" means the state-based health benefits exchange operating in this state under the Patient Protection and Affordable Care Act and the law of this state.
(7) "Insurer" means any entity subject to the jurisdiction of the commissioner that offers, issues, or administers insured state-regulated coverage, including an accident and sickness insurer, a nonprofit hospital service corporation, a nonprofit medical service corporation, a health maintenance organization, and any other licensed carrier offering health coverage in this state. The term does not include a third-party administrator in its capacity administering a self-funded plan.
(8) "Minimum essential coverage" has the meaning given in 26 U.S.C. § 5000A(f).
(9) "Provider" means a physician, advanced practice registered nurse, physician assistant, or other health care professional or facility licensed to furnish health care services in this state.
(10) "Qualified health plan" means a health plan certified for sale on the Exchange under 42 U.S.C. § 18021 and the law of this state.
(11) "Self-funded plan" means an employee welfare benefit plan, as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., that provides health benefits and that is not an insured plan. A self-funded plan is not state-regulated coverage.
(12) "State-regulated coverage" means health insurance coverage offered in the individual market or the fully-insured group market in this state and subject to regulation by the commissioner. State-regulated coverage does not include a self-funded plan, Medicaid, a Medicaid managed care plan, Medicare, a Medicare Advantage plan, or any coverage the regulation of which is preempted or precluded by federal law.
(13) "Third-party administrator" means an entity that administers claims or benefits for a plan without bearing insurance risk. No obligation under this chapter applies to a third-party administrator in its capacity administering a self-funded plan.
§ 27-[XX]-2. Scope; exclusion of self-funded plans.
(a) This chapter applies to every insurer with respect to state-regulated coverage.
(b) This chapter does not apply to, and shall not be construed to regulate, mandate a payment by, assess, report on, or otherwise reach a self-funded plan, or a third-party administrator in its capacity administering a self-funded plan. Nothing in this chapter regulates the benefit design, coverage terms, or administration of any plan, and nothing in this chapter requires any employer to offer, to maintain, or to terminate any plan. This chapter regulates only the reimbursement an insurer pays a provider for a covered service under state-regulated coverage.
§ 27-[XX]-3. Construction; relationship to federal law.
(a) This chapter regulates the business of insurance and is intended to be saved from preemption by the insurance savings clause of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1144(b)(2)(A), as construed in Kentucky Association of Health Plans v. Miller, 538 U.S. 329 (2003), and Rutledge v. Pharmaceutical Care Management Association, 592 U.S. 80 (2020).
(b) No provision of this chapter shall be construed to dictate the benefit design, coverage terms, or administration of any plan, or to require any employer to offer, to maintain, or to terminate any plan. Every provision of this chapter regulates only the price a licensed insurer pays a provider and the conduct of a licensed insurer in paying providers.
(c) This chapter applies prospectively. It applies to state-regulated coverage issued or renewed on or after the applicable effective date, and to provider contracts entered or renewed on or after that date. It does not impair the terms of a contract in effect before that date until that contract is renewed.
§ 27-[XX]-4. The benchmark reimbursement floor.
(a) An insurer shall reimburse a provider for a covered service furnished to a person enrolled in state-regulated coverage at not less than the benchmark rate for that service.
(b) The commissioner shall determine the benchmark rate annually by a formula fixed by rule, in accordance with the following standards, which constitute the principle guiding this delegation:
(1) The benchmark rate shall be set at the regional median of commercial reimbursement for the service, derived from the most recent prior-year published reimbursement data for Rhode Island, Massachusetts, and Connecticut. The benchmark rate is a figure determined by the commissioner and informed by regional data. It is not the reimbursement schedule of any other state and is not a mechanical adoption of another state's prices.
(2) The purpose of the benchmark rate is to set reimbursement at a level sufficient to retain and attract providers in Rhode Island.
(3) The year-over-year increase in the benchmark rate for any service shall not exceed a cap fixed by rule, which shall not in any event exceed [outer bound, for example ten percent (10%)] per year, so that the benchmark is predictable and does not compound against itself.
(4) Until the commissioner first determines the benchmark rate by rule, the benchmark rate for a service shall be the greater of the Rhode Island commercial median reimbursement for that service in the most recent year for which data are available or [a defined floor, for example one hundred forty percent (140%) of the Medicare rate for that service]. This default governs in the interim and constitutes a statutory floor.
(c) The commissioner shall publish the benchmark rate and the underlying data supporting it annually.
(d) The benchmark rate applies uniformly to every insurer offering state-regulated coverage, whether domiciled within or outside this state.
(e) The benchmark floor shall be phased in over a period of approximately three (3) years from the effective date of this chapter, on a schedule fixed by the commissioner by rule, and subject to the actuarial certification required by section 27-[YY]-7(b). [Parameter for counsel: confirm phase-in duration and annual increments and the interim default and outer bound in subsections (b)(3) and (b)(4).]
§ 27-[XX]-5. Payment of clean claims in full and on time.
(a) An insurer shall pay a clean claim for a covered service furnished under state-regulated coverage at one hundred percent (100%) of the benchmark rate, automatically, within the deadline set by this section.
(b) An insurer shall pay a clean claim within thirty (30) days of receipt of a claim submitted electronically and within forty (40) days of receipt of a claim submitted in writing, consistent with and supplementing sections 27-18-61, 27-19-52, 27-20-47, and 27-41-64, as coordinated by section 27-[XX]-17.
(c) If an insurer does not, within fifteen (15) days of receipt of a claim, reject the claim by written notice stating specific deficiencies that are valid under this chapter, the claim is deemed clean as a matter of law, and the payment deadline under subsection (b) runs from the date the claim was originally submitted.
§ 27-[XX]-6. Penalty interest.
(a) Interest accrues automatically on any clean claim that is not paid in full by the applicable deadline, without any filing, request, or other action by the provider.
(b) Interest accrues on the unpaid or underpaid amount at a rate equal to a defined reference rate plus a defined spread, and in no event less than twelve percent (12%) per annum, compounding monthly. [Parameter for counsel: fix the reference rate, the spread, and the compounding interval.]
(c) Penalty interest under this section is in addition to, and not in lieu of, any administrative fine under section 27-[XX]-8.
§ 27-[XX]-7. Payment first; recoupment after.
(a) If an insurer contends that it has overpaid a claim, the insurer shall pay the claim as required by this chapter and may thereafter seek recoupment only through the process set forth in this section.
(b) A recoupment demand shall: (1) be filed within twelve (12) months of the date the claim was paid; (2) state the specific grounds for the demand and identify the specific claim to which it applies; and (3) not be satisfied by offsetting the disputed amount against payments owed on unrelated claims.
(c) A provider may contest a recoupment demand. The commissioner shall by rule establish a process for the resolution of contested recoupment demands that provides written notice of the grounds, a defined period within which the provider may respond, and review by a neutral decision-maker before any recoupment is effected.
(d) If a recoupment demand is finally determined to be without merit, the insurer shall bear the provider's reasonable costs of contesting the demand.
§ 27-[XX]-8. Administrative fines for patterns of noncompliance.
The commissioner may impose escalating administrative fines on an insurer for a documented pattern of underpayment, improper denial, improper downcoding, or late payment of clean claims, according to a schedule fixed by rule. The schedule shall be graduated by the frequency and the amount of the noncompliance, and shall be set at a level sufficient to make compliance less costly to the insurer than noncompliance. Administrative fines under this section are separate from and additional to per-claim penalty interest under section 27-[XX]-6.
§ 27-[XX]-9. Medical loss ratio floor; premium relief.
(a) An insurer offering state-regulated coverage shall maintain a medical loss ratio of not less than a floor fixed by the commissioner by rule, which shall be not less than eighty-eight percent (88%) and not more than ninety percent (90%). [Parameter for counsel: fix the floor within this range.]
(b) An insurer whose medical loss ratio falls below the floor shall pay rebates to its enrollees, calculated on the method used under federal law. The rebate mechanism is the primary means of premium relief under this chapter.
(c) A premium increase for state-regulated coverage may reflect only actual and projected spending on care and quality improvement.
(d) [Optional provision, flagged for counsel: an excess-margin assessment funding a premium relief pool. Counsel should weigh this against the risk that a court recharacterizes the assessment as a tax, and may rely on the rebate mechanism in subsection (b) alone.]
§ 27-[XX]-10. Cost-sharing ceilings.
An insurer shall not impose deductibles or out-of-pocket maximums under state-regulated coverage in excess of ceilings fixed by the commissioner by rule and indexed to the affordability standard, which shall be expressed as a defined percentage of Rhode Island median household income and shall constitute the principle guiding this delegation. An increase above the indexed ceiling requires the prior approval of the commissioner.
§ 27-[XX]-11. Network adequacy.
An insurer offering state-regulated coverage shall maintain a network sufficient to meet maximum appointment-wait-time and travel-time standards for primary care, fixed by the commissioner by rule and not exceeding outer bounds stated by rule and sufficient to ensure timely access to primary care. A violation of this section is subject to the same schedule of administrative fines as section 27-[XX]-8.
§ 27-[XX]-12. Public reporting.
(a) Each insurer shall report annually to the commissioner, with respect to its state-regulated coverage, its rates of claim denial, payment timeliness, claim rejection and downcoding, appeal overturn, and trends in enrollee cost-sharing. The commissioner shall publish this information annually, identified by insurer.
(b) No reporting obligation under this section applies to a third-party administrator in its capacity administering a self-funded plan, or reaches the data of any self-funded plan.
§ 27-[XX]-13. Relief for confiscatory application.
(a) An insurer may petition the commissioner for relief from the combined operation of sections 27-[XX]-4, 27-[XX]-9, and 27-[XX]-10 on a showing, by clear and convincing evidence and supported by audited financial data, that their combined effect, as applied to the insurer, deprives it of a constitutionally adequate return.
(b) An insurer shall remain in full compliance with this chapter while a petition is pending.
(c) The commissioner shall decide a petition within one hundred twenty (120) days of a complete filing. Relief granted shall be tailored to the showing made and limited in time, and shall be reviewed on renewal.
(d) This section provides an administrative remedy for a confiscatory-as-applied condition before any judicial remedy is sought.
§ 27-[XX]-14. Market withdrawal; wind-down.
(a) An insurer that intends to withdraw from offering state-regulated coverage in this state, or from any market segment or region thereof, shall provide the commissioner not less than eighteen (18) months' written notice.
(b) During the wind-down period, the withdrawing insurer shall maintain coverage for its members and shall fund transition coverage as the commissioner requires by rule, so that no member experiences a lapse in coverage.
(c) The obligations of a withdrawing insurer under this section are in addition to its obligations under chapter 27-[YY], including the posting of a transition reserve under section 27-[YY]-5.
§ 27-[XX]-15. Open-entry licensing.
The commissioner shall establish a streamlined process for licensing insurers, health care cooperatives, and provider-sponsored plans that agree to accept the payment standards of this chapter, so that new payers may enter the Rhode Island market without unnecessary delay.
§ 27-[XX]-16. Prospective application.
This chapter applies as provided in section 27-[XX]-3(c) and does not impair contracts in effect before the applicable effective date until those contracts are renewed.
§ 27-[XX]-17. Coordination with existing prompt-pay statutes.
This chapter supplements and, where its requirements are more protective, controls over the prompt-payment provisions at sections 27-18-61, 27-19-52, 27-20-47, and 27-41-64. Where a provision of this chapter and a provision of those sections both apply, the provision more protective of the provider governs.
SECTION 4. The Rhode Island Health Trust.
Title 27 of the General Laws is hereby amended by adding thereto the following chapter:
CHAPTER 27-[YY]
THE RHODE ISLAND HEALTH TRUST
§ 27-[YY]-1. Establishment.
(a) There is hereby established the Rhode Island Health Trust, a public body corporate and politic and a public instrumentality of the state, constituting a payer that operates alongside private insurers offering state-regulated coverage.
(b) The Rhode Island Health Trust is not a single payer and does not replace private insurers. Its functions are to offer or procure a qualified health plan on the Exchange as provided in section 27-[YY]-9, to receive and cover the members described in section 27-[YY]-3 when an insurer withdraws, and, as a later phase, to operate a Basic Health Program as provided in section 27-[YY]-10, so that coverage in the state-regulated commercial and individual market is never interrupted by an insurer's departure.
(c) The Rhode Island Health Trust holds a single statewide risk pool for the members it covers.
§ 27-[YY]-2. The Rhode Island Health Trust Fund; firewall.
(a) There is hereby established the Rhode Island Health Trust Fund, a segregated fund held by the Rhode Island Health Trust and dedicated exclusively to the payment of covered care and the reasonable administrative costs of the Rhode Island Health Trust. The fund is not general revenue and is not held by the general treasurer for general purposes.
(b) No money in the Rhode Island Health Trust Fund shall be transferred, swept, or appropriated to the general fund or to any purpose other than those stated in subsection (a). Except for the liquidity facility expressly authorized by section 27-[YY]-5(f), which exists solely to maintain the payment of claims, is non-recourse to the state, and is repaid from the dedicated revenues of the fund, no money in the fund shall be borrowed against, and the state shall not borrow against the fund. Every dollar in the fund is confined to the payment of care.
(c) Money in the Rhode Island Health Trust Fund does not lapse and remains available for its dedicated purpose.
(d) Federal Basic Health Program funds received under section 27-[YY]-10 shall be held in a segregated account within the fund and spent only as Section 1331 of the Patient Protection and Affordable Care Act requires.
§ 27-[YY]-3. Covered population; exclusion of Medicaid and Medicare; preservation of federal subsidies.
(a) The mandatory enrollment of the Rhode Island Health Trust is confined to persons enrolled in state-regulated coverage, meaning the individual market and the fully-insured group market defined in section 27-[XX]-1.
(b) The Rhode Island Health Trust shall not automatically enroll, and shall not become the payer by operation of this act for, any person enrolled in Medicaid, a Medicaid managed care plan, Medicare, or a Medicare Advantage plan. The continuity of coverage for those persons is governed by the separate federal and state mechanisms that apply to those programs.
(c) The Rhode Island Health Trust shall maintain coordination-of-benefits rules ensuring that it does not pay for a service that is the financial responsibility of Medicaid, Medicare, or another payer of primary responsibility. For a member who is or becomes dually eligible for Medicare or Medicaid, the Rhode Island Health Trust shall coordinate benefits so that it pays only amounts properly payable by a commercial payer.
(d) The confinement of the core, assessment-funded operation of the Rhode Island Health Trust to the state-regulated commercial and individual market is the reason that operation requires no federal waiver.
(e) Preservation of federal subsidies. The Rhode Island Health Trust shall offer or procure a qualified health plan certified on the Exchange, as provided in section 27-[YY]-9, so that a member of the individual market whom the Trust covers may receive and retain the advance premium tax credit and cost-sharing reductions for which the member qualifies. Nothing in this act displaces the Exchange's special-enrollment and plan-selection process by which a member of the individual market whose insurer withdraws may enroll in another qualified health plan with the member's federal subsidies intact. The Rhode Island Health Trust shall coordinate with the Exchange so that a member is not moved off the Exchange, and does not lose a federal subsidy, as a consequence of the operation of this act.
§ 27-[YY]-4. Coverage of members on withdrawal; transfer by market segment.
(a) Individual market. When an insurer withdraws from offering individual-market state-regulated coverage, an affected member who qualifies for federal subsidies is enrolled, through the Exchange, in another qualified health plan, which may be a qualified health plan offered by the Rhode Island Health Trust under section 27-[YY]-9, with the member's federal subsidies intact. The Rhode Island Health Trust becomes the automatic payer for an affected individual-market member only where no qualified health plan remains available to the member on the Exchange, or where the member otherwise lacks minimum essential coverage and would otherwise be left without coverage. In either case coverage continues without a gap and the member need take no action.
(b) Fully-insured group market. This act does not dissolve, modify, or transfer any employer's group health plan and does not require any employer to offer, to maintain, or to terminate coverage. The Rhode Island Health Trust becomes the payer for a former member of a fully-insured group only where that member lacks minimum essential coverage and would otherwise be uninsured. Eligibility under this subsection turns solely on the member's own coverage status, and not on any action or inaction of an employer or of an employer's plan.
(c) A region below network adequacy. When a region of the state falls below the network adequacy standard established under section 27-[XX]-11 as a result of an insurer's withdrawal or contraction, affected individual-market members in that region are covered as provided in subsection (a).
(d) In every case, a member covered by the Rhode Island Health Trust retains the identification card already issued to the member. Claims for the member's care are routed to the Rhode Island Health Trust or its contracted issuer for adjudication and payment. The Rhode Island Health Trust, and not the member, bears the administrative burden of the transfer.
(e) Care in progress at the time of transfer continues without interruption. No claim shall be denied on the ground that coverage transferred during the course of treatment or during the transfer of records.
(f) The Rhode Island Health Trust shall pay benefits as the member's coverage requires and shall pay providers at the benchmark rate under, and subject to, the payment standards of chapter 27-[XX].
§ 27-[YY]-5. Financing; layered sources.
(a) The Rhode Island Health Trust is financed by the sources set forth in this section and by no other. It levies no tax. The redirected member premium and the insurer assessment are separate and are separately characterized.
(b) Redirected member premiums. When a member is covered by the Rhode Island Health Trust other than through a qualified health plan under section 27-[YY]-9, the premium that the member and, where applicable, the member's employer paid for the member's prior coverage is redirected to the Rhode Island Health Trust Fund and applied to the payment of that member's care. At the time of transfer, the member pays no amount greater than the member paid for the member's prior coverage, and pays no tax. For subsequent coverage years, the premium is set actuarially in the ordinary course and is subject to the same rate-review protections that apply to other state-regulated coverage, including review of any increase at renewal. Redirected premiums are a primary source of ongoing claims payment for covered members.
(c) Insurer assessment; standing reserve. Every insurer licensed to offer state-regulated coverage is a mandatory participant in an assessment, on the model of the Rhode Island Life and Health Insurance Guaranty Association under chapter 34.3 of title 27. Each insurer's share is allocated in proportion to its share of Rhode Island premium volume, subject to an annual cap fixed by rule and consistent with chapter 34.3 of title 27. The assessment is levied on an ongoing basis while insurers are present in the market, and its proceeds capitalize a standing reserve within the fund before any withdrawal occurs, so that the fund is substantially pre-funded and does not depend on assessing a diminished market after a large carrier has left. The purpose of the assessment is the solvency of the Rhode Island Health Trust. [Parameter for the chief actuary and counsel: fix the assessment schedule, the annual cap, and the standing reserve target.]
(d) Extension of the guaranty mechanism. The assessment established by this section extends the mechanism of chapter 34.3 of title 27 to be triggered to fund coverage on a solvent insurer's voluntary withdrawal, and not only on a court-ordered insolvency, and to reach every insurer form offering state-regulated coverage, including a nonprofit hospital service corporation, a nonprofit medical service corporation, and a health maintenance organization. [Drafting note for counsel: confirm the exact statutory-entity labels for Blue Cross and Blue Shield of Rhode Island and Neighborhood Health Plan of Rhode Island against the insurance code.]
(e) Transition reserve of a withdrawing insurer. A withdrawing insurer shall post a transition reserve, in an amount fixed by rule and scaled to the size of its book of business and the projected run-out of its claims, so that a larger insurer posts a larger reserve. The transition reserve of a withdrawing insurer is drawn first to fund the coverage of that insurer's transferred members, before the standing reserve or any other source.
(f) Reinsurance and liquidity. The Rhode Island Health Trust may procure reinsurance or stop-loss coverage against catastrophic or concentrated losses. The Rhode Island Health Trust may maintain a revolving line of credit or other repayable liquidity facility, solely to maintain the payment of claims during the period before redirected premiums and assessments fully flow. Any such facility is non-recourse to the state, is payable solely from the dedicated revenues of the Rhode Island Health Trust, shall not pledge the full faith and credit of the state, and shall not constitute a debt of the state within the meaning of the Constitution of Rhode Island. [Drafting note for counsel: a one-time repayable startup capitalization is an alternative, structured as repayable. A permanent general-fund appropriation is not recommended, because it would undercut the premium-not-tax character of the financing.]
(g) Risk adjustment. The Rhode Island Health Trust shall have authority to apply risk adjustment to account for the health status of the population it covers, consistent and coordinated with any federal risk-adjustment program applicable to the individual and small-group markets and subject to federal approval where required, so that the Trust is not destabilized by adverse selection.
(h) The reserve held within the fund is a defined contingency held against the solvency standard certified under section 27-[YY]-7 and shall not be counted both as available claims funds and as reserve.
(i) Financing of the Trust's qualified health plan. For a member covered through a qualified health plan offered by the Rhode Island Health Trust under section 27-[YY]-9, financing consists of the member's premium and the federal advance premium tax credit and cost-sharing reductions that follow the member, in the ordinary manner of a qualified health plan. This financing is separate from the assessment and the standing reserve, which remain dedicated to the functions in subsections (c) through (e) and are not required to subsidize the qualified health plan.
(j) These sources are the sole financing of the Rhode Island Health Trust. No payroll tax and no new tax on any worker or business finances the Rhode Island Health Trust.
§ 27-[YY]-6. Governance; Board of Trustees.
(a) The Rhode Island Health Trust is governed by a Board of Trustees of not fewer than seven (7) and not more than nine (9) voting members.
(b) A nominating committee, appointed jointly by the governor, the speaker of the house of representatives, and the president of the senate, and composed with mandatory balance between the two (2) largest political parties, shall screen candidates for expertise in health care finance, health care delivery, or actuarial science, and shall forward to the governor only a list of qualified candidates. The governor shall appoint Trustees from that list, subject to the advice and consent of the senate.
(c) Trustees serve staggered terms of six (6) years, fixed so that the terms cross gubernatorial cycles. A vacancy shall be filled by the same process within a defined period.
(d) A Trustee may be removed only for cause.
(e) A Trustee serves full-time, is compensated at a rate equivalent to that of a judge of the superior court, and is barred from outside employment with any entity regulated under this title.
(f) Each Trustee owes an enforceable fiduciary duty to the beneficiaries of the Rhode Island Health Trust and to its long-term solvency, superior to any party or industry interest. The board shall adopt and enforce rules on recusal, on a cooling-off period restricting a former Trustee from employment with a regulated entity, and on the acceptance of gifts.
(g) Governance is separate from operations. The board sets policy and oversees the Rhode Island Health Trust. A professional administrator conducts its day-to-day operations.
(h) The board shall establish regional advisory councils to receive broad public and community input.
§ 27-[YY]-7. Office of the Chief Actuary; solvency; certification; annual report.
(a) There is established within the Rhode Island Health Trust an independent Office of the Chief Actuary.
(b) The chief actuary shall certify annually that the Rhode Island Health Trust meets a defined solvency standard, and shall maintain a reserve and contingency fund adequate to that standard. Before each step of the phase-in of the benchmark floor under section 27-[XX]-4(e) takes effect, the chief actuary shall certify that the combined requirements of chapter 27-[XX], including the standing assessment under section 27-[YY]-5(c), are sustainable and are not likely to drive insurers to withdraw, and that the Rhode Island Health Trust would remain solvent in a scenario in which the largest insurer in the state withdraws, modeled both at the earliest point in the phase-in and in steady state. If the chief actuary cannot so certify, the phase-in step is suspended, unless the general assembly by law directs that it proceed.
(c) The Rhode Island Health Trust shall publish an annual Rhode Island Health Trust Trustees Report, modeled on the annual report of the boards of trustees of the federal Social Security and Medicare trust funds, disclosing its financial condition, its actuarial status, and the certification of the chief actuary.
(d) Projections of administrative efficiency and cost are targets certified by the chief actuary and are not guarantees.
§ 27-[YY]-8. Public-option qualified health plan on the Exchange.
(a) The Rhode Island Health Trust shall offer, or shall procure through a competitive process one or more licensed carriers to offer, one or more qualified health plans certified on the Exchange, meeting all federal and state requirements applicable to a qualified health plan.
(b) The board shall determine whether the Rhode Island Health Trust is itself licensed as the issuer of a qualified health plan or contracts with one or more licensed carriers to issue the plan.
(c) The purpose of this section is to preserve the eligibility of members for federal advance premium tax credits and cost-sharing reductions and to provide a stable, benchmark-priced option on the Exchange.
§ 27-[YY]-9. Basic Health Program; later phase.
(a) The Rhode Island Health Trust is authorized, as a later phase and not as a condition of the operation of the rest of this act, to establish a Basic Health Program under Section 1331 of the Patient Protection and Affordable Care Act, 42 U.S.C. § 18051, for eligible residents with household income between one hundred thirty-eight percent (138%) and two hundred percent (200%) of the federal poverty level.
(b) Federal funds received for the Basic Health Program shall be held in the segregated account established under section 27-[YY]-2(d) and spent only to reduce premiums and cost-sharing, or to provide additional benefits, for enrollees, as Section 1331 requires.
(c) Implementation of the Basic Health Program is contingent on approval by the federal Centers for Medicare and Medicaid Services of a program blueprint and on the availability of federal funding. If federal funding is reduced or withdrawn, the Rhode Island Health Trust shall wind the Basic Health Program down in an orderly manner. A reduction or withdrawal of Basic Health Program funding shall not impair the assessment-funded functions of the Rhode Island Health Trust or the operation of its qualified health plan.
§ 27-[YY]-10. Administration.
The Rhode Island Health Trust shall conduct enrollment through and coordinate with HealthSource RI, and shall adjudicate and pay claims through a contracted administrator, a contracted issuer, or existing state claims infrastructure, as the board determines to be most efficient.
SECTION 5. Severability.
If any provision of this act, or the application of any provision to any person or circumstance, is held invalid, that invalidity shall not affect other provisions or applications of the act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable. The general assembly declares that it would have enacted the remaining provisions of this act even without any provision held invalid.
SECTION 6. Effective Date and Phase-In.
(a) This act takes effect upon passage.
(b) The benchmark reimbursement floor established by section 27-[XX]-4 shall be phased in over a period of approximately three (3) years, as provided in that section and subject to the actuarial certification required by section 27-[YY]-7(b).
(c) The commissioner and the Rhode Island Health Trust shall promulgate the rules required by this act within the periods the general assembly prescribes for each. [Parameter for counsel: set rulemaking deadlines.]