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Rhode Island health insurance exchange

RI average rates increasing just 4.3%; new carrier joins exchange

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  • By
  • healthinsurance.org contributor
  • November 2, 2014

A promising outlook for 2015

The high-performing, state-run Rhode Island exchange will offer plans from three carriers in 2015, up from two this 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.

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

The modest 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 directed Christine Ferguson explains that this is part of their fundamental believe that “…competition drives innovation, price, and quality”

2014 enrollees need to re-enroll for 2015

Health Source RI will not be utilizing automatic renewals for 2015.  They are undertaking a comprehensive outreach program to let current enrollees know how the renewal process will work, and advising them to contact the call center or use the exchange website to see the plans and prices available for 2015 and complete their renewals or policy changes during open enrollment.  Open enrollment runs from November 15 to February 15.

The enrollment deadline to get a policy with a January 1 effective date is December 23.  Current enrollees who bought a plan for 2014 must reapply by December 23 in order to have coverage in place on January 1.  You can apply after that date, but if your application is submitted between December 24 and January 23, the effective date will be February 1.  Applications submitted between January 24 and February 15 will have a March 1 effective date.

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.

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).

Funding issues

RI lawmakers are currently considering how to fund HealthSourceRI’s projected $23.9 million 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.

Future switch to Healthcare.gov?

As a result, they are 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 would have eliminated the state-run exchange at the end of 2014 and switched operations over to Healthcare.gov instead.  At the end of May, a committee recommended that the bill be held for further study, but it may be taken up again in 2015.  

Governor Lincoln Chafee is not running for re-election in 2014, so the state will have a new governor starting in 2015; the outcome of the race will likely come into play in terms of how the state moves forward with funding the exchange or considering other alternatives.

If it had passed, this bill would have made RI the first state to give up a successful exchange and switch to an FFM (other states – Oregon and Nevada – 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 $1615.  

In May, HealthSource RI director Christine Ferguson was seeking $4.6 million in state funds to complete the $55 million budget for the exchange for the upcoming fiscal year that begins on July 1 (the remainder of the budget would be federal funds).  But in late May, the federal government agreed to fund the state’s exchange for the upcoming fiscal year without requiring RI to pay the $4.6 million.

Or create a new state regulatory agency?

And another 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, 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.

It appears that there will be left-over federal funding from 2014 that will be available to use in 2015, but the state has not yet secured federal permission to do this.  $23.4 in federal funding was budgeted for 2014, but the exchange has only used $1.35 million of this money as of mid-October.

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.

Rhode Island’s exchange is one of only five in the country that does not offer any plans that specifically exclude all abortion coverage.  This has caused some controversy with a local Catholic Bishop.

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