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Rhode Island health insurance exchange / marketplace

Proposed weighted average 2016 rate increase under 8% for individual plans in HealthSource RI

2016 rates

Of the three carriers that offer individual plans in HealthSource RI, only one – UnitedHealthcare of New England – shows up on the rate review tool that HHS is using to publish proposed rate hikes of ten percent or higher.  United is requesting an average rate increase of about 11 percent for their Compass individual plans.

Blue Cross Blue Shield had also initially proposed weighted average rate hikes of 11 percent for their individual market plans in RI, but in early July, the carrier revised their projection to a weighted average rate increase of just 7 percent.  The lower rate is partially due to the fact that in the FY 2016 budget (see below), the HealthSource RI premium fee is lower than initially proposed.

Neighborhood Health Plan of RI has proposed increasing premiums by an average of 8.6 percent for 2015.

In 2014, Blue Cross Blue Shield garnered 97 percent of the exchange enrollments, while Neighborhood Health Plan of RI picked up just 3 percent (United joined the exchange in 2015).  But Neighborhood Health Plan decreased their rates for 2015, and their market share increased considerably; during the 2015 open enrollment period, Blue Cross Blue Shield and Neighborhood Health Plans each got just under half of the exchange enrollees, while United snagged about 3 percent of the enrollees.

So the proposed weighted average rate increase for HealthSource RI’s individual plans currently sits just under 8 percent for 2016, although the state is currently reviewing the filed rates and they are subject to change before they’re finalized.

2016 fees to be assessed market-wide

On June 30, RI Governor Gina Raimondo signed the state’s FY 2016 budget (beginning July 1), which included a provision to fund HealthSource RI.  Lawmakers had considered the possibility of switching to Healthcare.gov instead, due to the costs involved with running a state-based exchange and the relatively small population in RI (more details below).  But for now, the Rhode Island will continue to have a state-run exchange.

The new budget calls for a 3.5 percent assessment on plans sold through HealthSource RI, but the fee is then spread across all individual and small group plans sold in RI, including those sold outside the exchange.  That results in an average actual assessment of 2.86 percent for individuals, and 0.59 percent for small groups.  This mirrors the fee assessments used by Healthcare.gov in states that rely on the federally-run marketplace.  Raimondo had initially proposed a higher fee schedule, but the final version of the budget sets the assessment at 3.5 percent.

The state will also provide HealthSource RI with $2.6 million in funding as the exchange transitions away from federal funds to a purely state-based funding approach (federal funds are no longer available to support state-based exchanges).

Enrollment numbers for 2015

As of February 23, 31,513 people had selected private plans through HealthSource RI.  Of that total, 10,301 are new to the exchange for 2015, and 21,212 had coverage in 2014.  The 2015 enrollment put the exchange at about 85 percent of the target enrollment projected by HHS.

Of the people who had enrolled by February 23, 30,001 had already paid for their coverage.  Although the rest had not yet paid, their payments were not past due.  HealthSource RI is the only exchange where enrollees who do not pay their first premium by the due date are quickly purged from the total enrollee count.  By the end of March, 30,416 people had in-force private coverage through HealthSource RI.  This attrition is to be expected, and it takes into account people who enrolled in February but didn’t pay their first premium, as well as people who simply opted to cancel their coverage before the end of March.

While the March 31 effectuated enrollment numbers represented a nearly 13 percent drop from the nationwide reported enrollment count as of February 22, Rhode Island’s effectuated enrollment total was only 3.5 percent lower than the enrollment they had reported as of February 23.  Because HealthSource RI quickly removes enrollees who don’t effectuate their coverage (pay the first premium by the due date), their reported enrollment total is always as close as possible to the actual number of people who have in-force coverage through the exchange.  The ACA allows for a 90 day payment grace period for exchange enrollees who are receiving premium subsidies, but only if they’ve already paid at least one monthly premium; there’s no grace period for the first premium, and when the first premium isn’t paid by the due date, the policy never goes into effect.

Of the 30,416 people who had in-force private coverage through HealthSource RI at the end of March, 85 percent were receiving premium subsidies, and 56 percent were receiving cost-sharing subsidies.  In addition to the private plan enrollments, 65,396 people had enrolled in Medicaid through the exchange by February 21.

By June 2, there were 503 small businesses enrolled through the SHOP exchange at HealthSource RI (up from 479 on February 23).  Those plans cover more than 3,500 employees and dependents.  SHOP enrollment continues year-round, as does Medicaid enrollment.

And as of July 3, HealthSource RI reported that they had “enrolled over 36,000 Rhode Islanders in 2015 coverage to date,” although Charles Gaba notes that the currently enrolled numbers is probably closer to 29,000 due to normal attrition.

HealthSource RI announced on February 15 that due to severe weather, the exchange provided for a special enrollment period through February 23.  Rhode Island’s normal enrollment deadline is the 23rd of the month to get coverage effective the first of the following month, so coverage was effective March 1 for anyone who enrolled by the end of the special enrollment period.

Open enrollment for 2015 has ended, so most enrollees will need a qualifying event in order to obtain 2015 coverage at this point (Native Americans and applicants who are eligible for Medicaid/CHIP can enroll year-round). The next open enrollment period begins on November 1, but coverage won’t be effective until January 1, 2016.

 No auto-renewals

HealthSource RI did not allow auto-renewal of 2014 plans – in a departure from the norm in most states.  People who had a 2014 plan needed to renew it or switch to a new plan by December 31 in order to have coverage in place on January 1.  Plans that were not renewed terminated on December 31.  By February 23, 83 percent of HealthSource RI’s 2014 enrollees had secured coverage for 2015.  Of those, 62 percent had switched to a new plan for this year.

In states using Healthcare.gov, between 35 and 40 percent of 2014 enrollees returned to the exchange to actively select their coverage for 2015 (the rest were auto-renewed, which was the default for Healthcare.gov and most of the state-run exchanges).  Getting consumers to return to the exchange and shop around each year is an integral part of keeping competition in the exchanges strong, so Rhode Island has obviously been much more successful in that aspect than most exchanges.

But the downside is that the remaining 22 percent of 2014 policy-holders no longer have coverage in place.  Of course they can still select a new plan between now and February 15, albeit with a gap in coverage, since their new plan will now be effective in March.

The state-run exchange, HealthSource RI, operated two walk-in enrollment centers – one in Warwick and one in Providence – during the 2015 open enrollment period, and residents were able to get in-person enrollment help at either one.  The exchange had about 200 navigators working in their call center and walk-in locations, and had about 150 of them available during all open hours, which is double the staffing they had last year.

A new year, a new director

HealthSource RI has a new director.  On December 30, Rhode Island’s then Governor-elect Gina Raimondo appointed Anya Rader Wallack to take over the leadership role at HealthSource RI, replacing Christine Ferguson who headed the exchange for two years.  Rader Wallack comes from Vermont, where she was very instrumental in the push for single payer healthcare in Vermont (that effort was abandoned for now, in December).

Funding issues

RI lawmakers have been considering how to fund HealthSourceRI’s annual budget, starting in fiscal year 2016 when federal funds are used up.  In some states, a per-member fee is being assessed, but RI’s small population (and correspondingly small enrollment total) would result in very high per-member fees if the exchanged were to rely solely on that method of funding.

In December, Rhode Island was one of five states to receive additional exchange funding from the federal government.  HealthSource RI got $3 million as a final establishment grant.  But the exchange will not be able to rely on further federal funding, as all of the exchanges had to be financially self-sustaining by January 1, 2015.

The total HealthSource RI budget for the 2016 fiscal year that begins July 1, 2015 is projected to be $27.68 million.  And while the federal government funded the exchange in the first two fiscal years, federal funding is expected to be only a little over $9 million in the upcoming fiscal year.  That left the exchange asking the state to help with $14.5 million in funding, and there was much debate in early 2016 over whether that funding request should be fulfilled.

In a letter to outgoing Governor Chafee that was sent with the exchange’s funding request, HealthSource RI director Christine Ferguson pointed out that the exchange used up considerable amounts of its initial federal funding helping the state to fix enrollment systems that are used not just for Medicaid, but also for other state-run assistance programs.

Rhode Island Governor Raimondo has said she wants to keep HealthSourceRI as a state-run exchange, although she acknowledges that funding is an issue.  Incoming exchange director Anya Rader Wallack obviously wants to continue the state-run exchange model, but notes that in a small state, the exchange has to be “right-sized” to fit the state and its budget.  The issue was debated by the largely Democratic legislature in the 2015 session, and while lawmakers ultimately decided to keep the exchange in the 2016 budget, some lawmakers favored turning the exchange over to the federal government instead.

Future switch to Healthcare.gov?

As a result of the funding issues facing HealthSource RI, lawmakers have been considering other options, including the possibility of switching to the federally facilitated marketplace (FFM).  A bipartisan bill (H7817) introduced in the Rhode Island House of Representatives in March 2014 would have eliminated the state-run exchange at the end of 2014 and switched operations over to Healthcare.gov instead.  

That bill was held for further study by the legislative committee in May 2014, and was not taken up again in 2015.  But at the start of the 2015 legislative session, a similar bill (H5329) was introduced.  It was sent to the House Finance committee on February 5, and called for turning the exchange operations over to Healthcare.gov as of the end of December 2015.  Ultimately, it did not advance beyond the Finance Committee.

If it had passed, H5329 would have made RI the first state to give up a successful exchange and switch to an FFM (other states – Oregon, Nevada, and Hawaii – have made the switch, but they had floundering state-run exchanges). The economies of scale that go along with relying on the FFM are significant:  during the 2014 open enrollment period, the average cost-per-enrollee in the FFM was $647, while in RI it was $1,615.

Governor Lincoln Chafee (who was first a Republican, then an Independent, then a Democrat), did not run for re-election in 2014, and was replaced in January by Governor Gina Raimondo, also a Democrat.  Prior to the election, Raimondo had said that her plan would be to keep the exchange but with a lowered budget (this is in opposition to the other candidates who had said they would either support switching to HealthCare.gov or working with Massachusetts to form a regional exchange).

Although the legislation calling for a switch to Healthcare.gov has not been successful, the issue remains somewhat contentious in Rhode Island.  Betsy Stubblefield Loucks, director of Health RIght, made a good case earlier in the year for why the exchange should remain state-run, including one very important point that transcends the budget concerns:  at that point, we didn’t yet know how the Supreme Court would rule on the King v. Burwell case.  If they had ruled that subsidies are not allowed in the federally-run exchanges, states like Rhode Island that established their own exchanges will be the only ones where subsidies remain legal.  But now that the Court has upheld the legality of subsidies in the FFM, that particular hurdle is no longer an obstacle if the state ultimately decides to switch to Healthcare.gov.

Or create a new state regulatory agency?

And another 2014 bill, known as the HealthRIght Bill (H7819) would create a Rhode Island Healthcare Authority that would consolidate all of the insurance regulatory function that is currently spread across several agencies.  The bill would also require that all insurance in Rhode Island be purchased via HealthSource RI.  H7819 was considered by a House Committee in mid-June 2014, and has been held for further study.

H7819 is being heralded by some as a progressive step, and by others as a government boondoggle.  Either way, it would put much more control in the hands of state government than H7817, which would eliminate HealthSource RI and turn the exchange over to HHS.

Abortion controversy

Rhode Island’s exchange is one of only five in the country that did not offer any plans in 2014 that specifically excluded abortion coverage.  This has caused some controversy with a local Catholic Bishop, and in neighboring Connecticut the exchange recently started offering four plans without abortion coverage.  HealthSource RI director Ferguson said in late November that the exchange was working with the federal government to provide a multi-state plan that doesn’t cover abortion.

In January, a lawsuit was brought against HealthSource RI to resolve the issue, because by law, exchanges must have at least one plan available without elective abortion coverage.  A bronze plan without abortion coverage did become available through HealthSource RI in January, but plans without abortion coverage were not available for the other three metal levels.  However, the FY 2016 budget took effect July 1, 2015, and it requires carriers in HealthSource RI to offer plans that don’t include abortion coverage.  The new RI provision goes further than the ACA’s requirement, and has come under fire from abortion rights advocates who say that it will reduce women’s access to abortion.

New plans, benchmark prices lower in 2015

The high-performing HealthSource RI exchange is offering 20 plans from three carriers in 2015, up from two last year.  And there shouldn’t be much in the way of rate shock for existing exchange enrollees:  Blue Cross Blue Shield of Rhode Island (which garnered 97 percent of the the exchange’s enrollees during the 2014 open enrollment period) is raising its base rate for individual plans by just 4.5 percent (although BCBS of RI had requested a rate hike of 8.9 percent, the final approved rate increase was just 4.5 percent).

Neighborhood Health Plan of Rhode Island (which enrolled the remaining 3 percent of the people who signed up during the first open enrollment) is decreasing its base rate by 7.3 percent.  Between the two carriers, the weighted average rate increase is about 4.3 percent.

United Healthcare is joining the exchange for the first time, which will further help to increase competition and hold down rates in future years (United has participated in the RI SHOP exchange in 2014, offering small business plans, but is offering both small business and individual plans for 2015).

And for people who had the benchmark plan (second lowest-cost silver plan) in 2014 and are willing to switch to the new benchmark plan in 2015, premiums are an average of nearly 11 percent lower in 2015, according to an analysis by the NY Times and confirmed by another analysis done by the Kaiser Family Foundation.

Of the 2014 enrollees in HealthSource RI who returned to the exchange to shop for coverage for 2015, 60 percent opted to switch to a new plan, indicating that competition is alive and well in the exchange.

The modest overall rate increases are especially good news given that 2014 rates in Rhode Island were a little higher than the national average.  In RI, the lowest cost bronze plan averages $264/month in 2014, versus a national average of $249.

Consumers who are dissatisfied with their health plan can contact HealthSourceRI and report the problem.  The exchange is tracking that information to give consumers another source of data.  HealthSourceRI director Christine Ferguson explained that this is part of their fundamental believe that “…competition drives innovation, price, and quality”

Health Source RI 2014 enrollment

As of August 2, Health Source RI had a total of 26,686 enrollments in private plans, and premiums had been paid for 25,892 of those plans – a 97 percent payment rate.  Another 70,243 people had enrolled in the expanded Medicaid program through Health Source RI by mid-April, but Medicaid enrollment continues year-round, so it’s likely that number has continued to climb.

By October 4, the total number of people enrolled in private plans was 26,245.  Based on the August numbers, it’s likely that this latest figure is for paid-up policies, but ACAsignups explains that it’s not entirely clear.  Total enrollment remained steady in the fall, and was at about 26,300 as of November 1.  This is more than twice as many people as the federal government had projected for RI.

The total private plan enrollment in Rhode Island during the first open enrollment period represented 40.6 percent of the eligible population, which was the third highest percentage in the country (trailing only Vermont and California).

Also as of August 2, the Rhode Island SHOP exchange had 258 enrolled small businesses with paid-up plans.  Those plans were covering a total of 1,821 people (1,091 employees plus their dependents).  By November 1, total SHOP enrollment had grown to about 2,400 people (the highest per-capita SHOP enrollment in the nation).  Small businesses can enroll in plans anytime during the year.

No grandmothered plans

RI joined several other states in rejecting President Obama’s November 2013 policy cancellation “fix” that would have allowed existing plans to extend into 2014.  Insureds in RI who received cancellation notices last fall had to enroll in a new ACA-compliant plan to replace their old coverage.

Health Source RI history

Gov. Chafee established the Rhode Island Health Benefits Exchange through an executive order in 2011. The state submitted a blueprint for a state-run exchange to the U.S. Department of Health and Human Services (HHS) and received conditional approval in December 2012. The state exchange was re-branded as Health Source RI in July 2013.

Chafee’s executive order established the exchange with the executive branch of state government and set up a 13-member board of directors. The board receives input from the Expert Advisory Committee (which includes representatives of insurance brokers, insurers and medical providers) and the Rhode Island Healthcare Reform Commission (which includes more than 200 stakeholders).

The Commission was established by Chafee in early 2011 and charged with implementing health care reform in the state. The Commission includes multiple workgroups that study and provide recommendations on various aspects of exchange operations.

According to the state about 126,000 people in Rhode Island were uninsured prior to 2014 — approximately 12 percent of the population. Between policies available on the exchange and through increased Medicaid enrollment, RI hopes to achieve near universal coverage. However, the state has not set a target date for reaching that goal.

Contact the Rhode Island exchange

Health Source RI
855-840-HSRI (855-840-4774)

More Rhode Island health insurance exchange links

State of Rhode Island Healthcare Reform Commission

State Exchange Profile: Rhode Island
The Henry J. Kaiser Family Foundation overview of Rhode Island’s
progress toward creating a state health insurance exchange.

Health Care Advocate, Office of the Attorney General
Serves all consumer and health care professionals with health-related problems.
(401) 274-4400

Rhode Island Consumer Assistance Program
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care.
(401) 462-9520 / insinquiry@dbr.ri.gov