R.I. Senate Backs Regional Health Plan

June 17, 2004

The Rhode Island Senate has approved legislation introduced by Sen. James C. Sheehan (D-Dist. 36) of Narragansett and North Kingstown to integrate Rhode Island’s insurance rules and regulations with those of Massachusetts in an effort to combine both states into one market for the sale of health insurance.

The bill, (2004 – S2415) – The Health Insurance Market Expansion Act, now goes to the House of Representatives for consideration.

“In light of the many concerns that have arisen in Rhode Island in regard to health insurance in general and Blue Cross Blue Shield in particular, I believe this legislation would serve a valuable purpose of starting the process to bring more competition to the Ocean State’s health care market,” said Sheehan. “Competition is crucial to providing health insurance customers with efficient and cost-effective medical services.”

Sheehan said Rhode Island is one of 12 states with three or fewer health insurers active in the group insurance market.

“A regional approach to health insurance that joins Rhode Island’s with Massachusetts’ regulations would expand the opportunities for regional insurers to offer insurance in Rhode Island,” he said. “One reason cited for the departure of health insurers from Rhode Island is the size of our population. States, or regions, with larger populations offer a greater opportunity for competition and profit.”

The bill would require the Director of the R.I. Department of Business Regulation to undertake a review of existing laws and regulations pertaining to the business of health insurance in Rhode Island and Massachusetts. It would require the director to present to the General Assembly by January 1, 2005, a report recommending needed revisions in Rhode Island law to reconcile with that of Massachusetts as well as a timetable for regulatory change and cooperative agreements with the insurance commissioner in Massachusetts to bring about a health insurance market incorporating both states.

“The solution to our Blue Cross problems is not a simple one,” said Sen. J. Michael Lenihan (D-Dist. 35) of North Kingstown, East Greenwich and Warwick, one of the bill’s co-sponsors. “This legislation properly addresses one aspect of the problem — increased competition. As recent revelations demonstrate, the status quo is completely unacceptable.”

Besides Senator Lenihan, the bill is co-sponsored by Sen. Elizabeth H. Roberts (D-Dist. 28) of Cranston; Senate Majority Leader M. Teresa Paiva Weed (D-Dist. 13) of Newport and Jamestown, and Sen. V. Susan Sosnowski (D-Dist. 37) of South Kingstown and New Shoreham.

Sheehan said his desire to enact the legislation, which he introduced in early February, was bolstered by revelations of the business practices of Blue Cross. “I was troubled when I read about the unusual business dealings by the state’s largest not for profit health insurer,” he said. “This serves to further underscore the need for more market competition as well as more rigorous oversight over our state’s health insurance industry.”

“A regional approach to health insurance that joins Rhode Island’s with Massachusetts’ regulations would expand the opportunities for regional insurers to offer insurance in Rhode Island,” said Sheehan.

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