- COVID-related special enrollment period for uninsured residents continues through August 15, 2021.
- 2021 approved rate changes: 3.3% increase for BCBSRI; 4.7% increase for NHP (lower than insurers had proposed, but attorney general believes the increases should have been even smaller).
- Rhode Island’s reinsurance program took effect in 2020.
- Rhode Island has implemented an individual mandate as of 2020, with penalty payments that will be used to fund the reinsurance program.
- Reinsurance and the mandate kept premiums down — insurers reduced average premiums by about half a percent for 2020.
- More than 34,000 people enrolled in coverage for 2020 through HealthSource RI.
- A look back at insurer participation and rate changes over the years: HealthSource RI has been among the more stable exchanges, although the loss of CSR funding caused a sharp increase in premiums for 2018.
- HealthSource RI refused to certify some very low-cost plans for 2017, in order to avoid sharp decreases in premium subsidies.
- New law directs RI to seek federal permission to allow sole proprietors to buy small-group plans, but the state has not moved forward with the waiver submission process.
- Pregnancy SEP legislation did not advance to a vote in 2017.
What type of exchange does Rhode Island have?
Rhode Island has a state-run health insurance exchange, called HealthSource RI. It is an active purchaser exchange (as opposed to a clearinghouse model), which means that the exchange negotiates directly with insurers, and determines which plans will be made available each year, rather than simply accepting all qualified health plans that insurers offer.
HealthSource RI still has a functional SHOP exchange for small businesses, which is not the case in most states.
COVID-related special enrollment window continues through August 15, 2021
Although open enrollment for 2021 health plans has ended, the state-run exchange has followed the lead set by the Biden administration’s COVID-related special enrollment period. Rhode Island’s COVID-related enrollment window continues through August 15, 2021, and is an opportunity for both new and current enrollees to take advantage of the newly enhanced premium subsidies created by the American Rescue Plan (Rhode Island had previously announced a COVID-related enrollment period through May 15, but it was limited to uninsured residents; the extension through August 15 notes that the enrollment opportunity is also available to current enrollees who would like to make a plan change).
A qualifying event is not necessary in order to use the COVID-related enrollment window, and coverage selected during this window will be effective the first of the month following the enrollment.
Previously, open enrollment for 2021 health plans via HealthSourceRI will was extended through January 23, 2021. This was more than a month longer than the open enrollment period in states that use HealthCare.gov, and it’s a few weeks longer than the open enrollment period that Rhode Island used for 2020 coverage.
What has Rhode Island done to keep its health insurance market stable?
Rhode Island has a state-based individual mandate as of 2020, with a penalty modeled on the federal penalty that applied until the end of 2018. Rhode Island also received federal approval for a reinsurance program that is helping to keep premiums more affordable, particularly for Rhode Island residents who don’t qualify for premium subsidies and have to pay full price for their coverage. Across the state’s two insurers, average pre-subsidy premiums dropped by 0.5 percent for 2020 (without the reinsurance program, rates would likely have increased by about 6 percent).
Rhode Island is one of two states where people can normally enroll as late as the 23rd of the month and still get coverage the first of the following month. In most states, the deadline is the 15th of the month, but Massachusetts and Rhode Island use the 23rd. (Washington’s state-run exchange also had a 23rd of the month deadline until April 2017, when they switched to a 15th of the month deadline)
Rhode Island’s exchange also collects premium payments on behalf of enrollees and remits them to the insurers (in most states people pay their insurer directly, even if they’re enrolled through the exchange). To provide more flexibility for payments, Health Source RI has partnered with CVS so that enrollees can pay their health insurance premiums at any CVS in the country, using credit cards, debit cards, or cash. Enrollees paying at CVS have the option to break up their monthly premium payment into smaller, more manageable chunks if they choose to do so.
HealthSource RI took a unique approach to renewals in the first year (at the end of 2014, for 2015 coverage), requiring enrollees to actively renew their coverage, with no auto-renewal option available. They abandoned that requirement in subsequent years, however, switching to the same sort of auto-renewal default that other states use. Requiring active renewal is a good concept in terms of ensuring that people end up with the plan that best fits their needs each year, as opposed to just keeping their existing plan due to inertia. But the downside is that people end up uninsured if they forget to actively renew their coverage, which is why Rhode Island switched to an auto-renewal default.
Open enrollment for 2020 health coverage in Rhode Island ended on December 31, 2019, which was an extension from the originally-scheduled mid-December end date. But in light of the COVID-19 pandemic, HealthSource RI joined the majority of the other state-based exchanges in opening up a special enrollment period during which uninsured residents can secure coverage. This enrollment window continued until April 30, 2020. Since then, enrollment has been limited to those who experience a qualifying event.
What insurers offer health coverage through Rhode Island's exchange?
In both the individual and small group market, there are two insurers that offer health plans through HealthSource RI: Blue Cross Blue Shield of Rhode Island (BCBSRI) and Neighborhood Health Plan of Rhode Island (NHPRI). This will continue to be the case in 2021 as well.
UnitedHealthcare and Tufts offer small group plans in Rhode Island, but only outside the exchange.
Average approved rate increase of 4.2% for 2021 (lower than insurers proposed, but attorney general believes it’s still far too large)
Rhode Island’s Office of the Health Insurance Commissioner published proposed rate changes for 2021 coverage in July 2020. At that point, Blue Cross Blue Shield of RI had proposed an average rate increase of 3.7 percent, while Neighborhood Health Plan had proposed an average increase of 5.5 percent.
The filings were revised in August, with BCBSRI proposing an average increase of 5.7 percent, and Neighborhood Health Plan proposing an average increase of 5.8 percent. Soon thereafter, however, the Rhode Island Office of the Health Insurance Commissioner announced the approved rate changes, both of which were smaller than the insurers had proposed. The following average rate changes will apply to pre-subsidy premiums for 2021:
- Blue Cross Blue Shield of Rhode Island: 3.3 percent increase (BCBSRI has 17,332 members; details for the initial and revised filing are in SERFF filing BCBS-132404728)
- Neighborhood Health Plan of Rhode Island: 4.7 percent increase (NHPRI has roughly 28,103 members; details for the initial and revised filings are in SERFF filing NHRI-132426358)
Overall, this amounts to a weighted average individual market rate increase of about 4.2 percent for 2021.
The approved rate increases were smaller than the insurers had proposed, and the Office of the Health Insurance Commissioner touted this as a win for consumers amounting to a total premium savings of nearly $13 million (compared with the prices that would have been charged if regulators had approved the insurers’ proposals without modifications).
But the same day that the rates were approved by the Office of the Health Insurance Commissioner, Rhode Island Attorney General Peter Neronha issued a statement expressing disappointment over the approved rates, noting that his office considers the rate increases to be “unnecessary and ill-advised at this time.” Neronha went on to say that “the approved increases are significantly larger than the increases justified in this Office’s actuarial reports (the Attorney General’s office had recommended an average rate increase of just 1.2 percent for BCBSRI, and 0.6 percent for Neighborhood Health Plan).
Reinsurance and a state-based individual mandate took effect in 2020
Health Source RI and the Rhode Island Office of the Health Insurance Commissioner partnered in 2018 to create a Market Stability Workgroup, tasked with creating state-level strategies to stabilize Rhode Island’s health insurance market. The workgroup published their recommendations in June 2018. At that point, it was too late to make any major changes for 2019, but there was plenty of time to implement new programs for 2020.
Congress and the Trump administration have made repeated efforts to destabilize the insurance markets, including an expansion of short-term and association health plans, the elimination of federal funding for cost-sharing reductions (CSR), and the elimination of the individual mandate penalty. The Market Stability Workgroup considered actions that Rhode Island could take to counter the Trump administration’s efforts to “dismantle the Affordable Care Act” and “jeopardize the progress Rhode Island has made in recent years under the [ACA].”
Ultimately, Rhode Island’s workgroup recommended that the state take the following actions:
- Implement a state-based individual mandate — this was part of the budget bill that Governor Raimondo signed into law in July 2019.
- Seek a 1332 waiver to implement a reinsurance program — legislation (S2934 / H8391) to get the ball rolling on this was enacted in 2018, and the state submitted its 1332 waiver proposal to CMS in July 2019, with approval coming the following month. The idea behind reinsurance is that premiums are lower when the reinsurance program is in place, which results in smaller premium subsidies paid by the federal government. By using a 1332 waiver, the state can keep the savings (referred to as pass-through funding).
- Implement new rules that give the state additional regulatory control over short-term health insurance plans. These plans are already highly regulated in Rhode Island (including a requirement that they cover pre-existing conditions), and none are currently for sale. But the workgroup recommended additional regulations. Legislation (S2931) to this effect was considered in 2018, but was not enacted.
In September 2018, Governor Raimondo signed an executive order directing the state to do everything in its power to “ensure access to affordable and quality healthcare for all Rhode Islanders.” The executive order encouraged lawmakers to “codify and strengthen consumer protections,” including the ACA’s protections for people with pre-existing conditions, dependent coverage up to age 26, and essential health benefits mandates. The executive order built on the workgroup’s recommendations (and the reinsurance bill that was enacted in 2018), directing the state to submit a 1332 waiver for a reinsurance program and “aggressively guard against” health plans (such as short-term plans) that don’t cover pre-existing conditions and/or essential health benefits.
Rhode Island’s individual mandate took effect in January 2020 (penalties will start to show up on 2020 tax returns that are filed in early 2021), and so did the reinsurance program. The two programs are intertwined, as the individual mandate penalty revenue will be used to partially fund the reinsurance program.
Rhode Island’s individual mandate penalty amounts are modeled after the penalty amounts that applied under the federal individual mandate penalty in 2018: The greater of $695 per uninsured adult (half the amount for a child), up to a maximum of $2,085 per family, or 2.5 percent of income. The maximum penalty amount under the percentage of income calculation will be equal to the cost of the average bronze plan in Rhode Island (at the federal level, it was equal to the nationwide average cost of a bronze plan).
Under the terms of the 2020 budget bill, any money collected by the state via the individual mandate penalty will be deposited into the Health Insurance Market Integrity Fund, which will be used to fund the state’s share of the cost of the reinsurance program.
Rhode Island’s reinsurance program is fairly modest in terms of the benefits it will provide: For 2020, the state plans to use the reinsurance program to reimburse insurers for 50 percent of claims that are between $40,000 and $97,000 (in most states that have or are planning reinsurance programs, the upper cap extends at least twice that high). The state’s small population and modest reinsurance benefits resulted in a total projected cost of just $14.7 million for the reinsurance program in 2020. Of that amount, the state estimated that between $6.4 million and $7.4 million would come from federal pass-through funding, while the rest would come from the RI Health Insurance Market Integrity Fund. And ultimately, CMS pegged the state’s estimated pass-through funding amount for 2020 at just $5.2 million (for perspective, Minnesota’s 2020 federal pass-through funding is estimated to be $86 million, and New Jersey’s is $190 million).
Rhode Island submitted their 1332 waiver to CMS on July 8, 2019. CMS determined the application to be complete the following week, and granted approval in late August. Insurers in the state had already based their proposed premiums for 2020 on the assumption that the reinsurance program would take effect in 2020, and also on the fact that the state would once again have an individual mandate penalty as of 2020.
How did health insurance premiums change in Rhode Island for 2020?
Overall average pre-subsidy premiums decreased slightly in Rhode Island in 2020, thanks in large part to the state’s individual mandate and reinsurance program. In September 2019, the Rhode Island Office of the Health Insurance Commissioner published the average rate changes that the state’s insurers would be implementing for 2020. The two insurers that offer individual market plans in the state had the following average rate changes:
- Blue Cross Blue Shield of Rhode Island: 1.5 percent decrease (it would have been a 6.6 percent increase without reinsurance and the new individual mandate)
- Neighborhood Health Plan of Rhode Island: 0.2 percent increase (it would have been a 5.4 percent increase without reinsurance and the new individual mandate)
The average rate change across both companies was a decrease of about half a percent, as opposed to an increase of about 0.8 percent that insurers had initially proposed, and an increase of about 6 percent that would have applied without the individual mandate and reinsurance program.
Although employer-sponsored health insurance premiums have tended to be more stable than individual market premiums over the last few years, most of the insurers in Rhode Island that offer small and large group health insurance implemented more significant rate increases for 2020 coverage. For the small group market, the rate changes ranged from a 0.9 percent decrease to an increase of 11 percent, and in the large group market, the rate increases ranged from 8.1 percent to 10.6 percent.
How have premiums changed in Rhode Island's exchange over time?
With the exception of 2018, when average rates increased by nearly 22 percent, premium changes in Rhode Island’s exchange have been fairly modest over the years, especially compared with many other states. A large enrollment pool is generally considered one of the cornerstones of a stable market, yet despite having an enrollment that hovers around 30,000 people (much lower than most other states), Rhode Island’s exchange has been remarkably stable. BCBSRI and NHPRI have offered plans statewide ever since the exchange debuted; the only change in insurer participation came when UnitedHealthcare joined the exchange for 2015 and 2016.
There are a variety of reasons for the overall stability. Health Source RI’s Kyrie Perry explains that Rhode Island fully embraced the ACA, but also had previously implemented some of the same reforms that were part of the ACA. Perry noted that the state’s insurers are local, and have a long history in Rhode Island and strong connections with the health care providers
HealthSource RI is an active purchaser exchange, so the exchange takes an active role in determining which plans will be made available to consumers. And state regulators have a robust rate review process, working closely with insurers to set rates that are adequate but also competitive. Rhode Island also never allowed grandmothered plans, which helps to stabilize the ACA-compliant market.
Here’s a look back at how premiums and insurer participation have changed in Rhode Island since plans became available through the exchange:
- 2014: Plans were available via HealthSource RI from Blue Cross Blue Shield of Rhode Island (BCBSRI) and Neighborhood Health Plan of Rhode Island (NHPRI). The average benchmark premium in Rhode Island was a little higher than the national average in 2014, at $293/month (versus $273 nationwide).
- 2015: Average increase of 4.17 percent. UnitedHealthcare of New England joined the exchange in Rhode Island for 2015, so there were three insurers offering plans. Average premiums increased by 4.5 percent for BCBSRI, but decreased by 7.3 percent for NHPRI. In 2014, BCBSRI had garnered 97 percent of the exchange enrollments, while NHPRI had picked up just 3 percent. But when NHPRI decreased their rates for 2015, their market share increased considerably; during the 2015 open enrollment period, BCBSRI and NHPRI each got just under half of the exchange enrollees, while United snagged about 3 percent of the enrollees. The dramatic shift in market share was no doubt aided by the fact that Rhode Island required active renewals (as opposed to passive auto-renewals) for all policies during the open enrollment period for 2015 coverage.
- 2016: Average increase of 6.5 percent. At ACAsignups, Charles Gaba calculated a weighted average rate hike of just under 6.5 percent in Rhode Island for 2016, including off-exchange enrollments (it was about 6.28 percent if we only include exchange enrollments).
UnitedHealthcare requested an average rate increase of about 11 percent for their Compass individual plans. Rhode Island regulators approved a base rate increase of 4.1 percent (weighted average increase of 2.7 percent). NHPRI proposed increasing premiums by an average of 8.6 percent for 2015. They were approved for a base rate increase of 8 percent (weighted average increase of 5.8 percent). And BCBSRI proposed a 14 percent average rate increase (weighted average rate increase of just 7 percent), but RI Insurance Commissioner Kathleen Hittner reduced BCBS’ proposed rate hike down to 10 percent, which her office deemed a good compromise between keeping coverage affordable and maintaining insurer solvency. But Attorney General Peter Kilmartin announced on August 31 that he was taking Hittner to court over the rates, alleging that her office didn’t do enough to further reduce the rates before approving them. The BCBSRI rates approved by Hittner were upheld at the end of September, when a Superior Court Judge ruled in favor of Hittner.
- 2017: Average increase of 1.3 percent. UnitedHealthcare left the exchange in Rhode Island (and most other states where they had been offering coverage) at the end of 2016, but they only had about 4 percent of the exchange market share in 2016 (BCBS of RI had 47 percent of the exchange’s enrollees, and Neighborhood Health Plan had 49 percent).
In August 2016, the Rhode Island Office of the Health Insurance Commissioner announced final approved rate changes for 2017. State regulators ultimately approved rates that were lower than the carriers had proposed. In the individual market, a 5.9 percent average increase was approved for BCBSRI, while a 5.9 percent decrease was approved for NHPRI. For the entire individual market, Rhode Island’s final weighted average rate increase for 2017 was just 1.3 percent, which is dramatically lower than the rest of the country. And if we only look at plans sold through the exchange (ie, not including the off-exchange market), Health Source RI officials announced in late October that average premiums would be 0.6 percent lower in 2017 than they were in 2016 — a dramatically different story than the rest of the country was facing for 2017.
Average rates could have been even lower, if Health Source RI had approved two additional plans proposed by Neighborhood Health Plan. The plans were approved by the state insurance commissioner, but not by the exchange. The exchange was concerned that the additional low-cost plans would have reduced the subsidies available to all exchange enrollees, making coverage less affordable if people chose plans other than the new low-cost options. This tactic was heralded by some as the exchange taking active steps to keep coverage as affordable as possible for everyone, but was also castigated as limiting competition and preventing anyone from having access to the lowest-cost plans.
- 2018: Average increase of 21.7 percent, mostly due to the loss of CSR funding. In August 2017, the Rhode Island Health Insurance Commissioner announced that the rate review process for 2018 plans was complete. Average rates increased by 12.1 percent for BCBSRI, and by 5 percent for NHPRI. But for both insurers, silver plan rates increased much more sharply, due to the Trump Administration’s decision to cut off funding for cost-sharing reductions (CSR). For both insurers, the premiums for silver on-exchange plans increased by an average of an additional 18 percent. Eligible enrollees continued to receive CSR benefits but the cost is now being added to silver plan premiums, rather than being reimbursed by the federal government (the majority of the extra cost is still actually being paid by the federal government in the form of larger premium subsidies).
- 2019: Average increase of 8.1 percent. The Rhode Island Office of the Health Insurance Commissioner noted that their approval of lower-than-requested premiums for 2019 would result in total premiums that would be nearly $22 million lower than they would have been if the rates had been approved as requested, although that encompasses the small and large group markets, as well as the individual market.
Blue Cross Blue Shield of Rhode Island noted in their filing that they did not add any premium adjustment to account for the elimination of the individual mandate penalty in 2019. Neighborhood Health Plan attributed a 1.9 percent rate increase to the impending repeal of the individual mandate penalty, so their average proposed rate increase would have been 6.8 percent if the individual mandate penalty was remaining in place (as noted above, Rhode Island has its own individual mandate starting in 2020).
In many states, insurers increased their premiums for 2019 to account for the expansion of the short-term health insurance market, which will act to siphon healthy people out of the ACA-compliant risk pool, leaving a sicker pool and necessitating higher premiums. But Rhode Island’s regulations on short-term plans are substantial enough that no insurers offer short-term plans in the state. So Rhode Island’s ACA-compliant insurers did not have to add to their premiums to account for the Trump administration’s expansion of short-term plans, since the state’s restrictions on those plans continue to apply.
New law directs RI to seek federal permission to allow self-employed individuals to buy small group health plans
In July 2018, Governor Raimondo signed H.7121/S.2019 into law. The legislation directs the state to submit a 1332 waiver to CMS, seeking federal permission to allow sole proprietors and self-employed people (without any employees) to purchase small group plans through HealthSource RI’s SHOP exchange. Currently, under ACA rules, sole proprietors and self-employed individuals (including a business that is comprised of only two people who are married to each other) can only purchase coverage in the individual market. Pre-ACA, many states allowed small business insurer to sell “group of one” coverage to self-employed people, but that option was no longer allowed once the ACA was implemented.
As of mid-2020, however, Rhode Island has not yet submitted a 1332 waiver to CMS. But assuming they do and it’s approved, self-employed Rhode Island residents would be able to purchase small group coverage or individual market coverage, selecting the option that best fits their needs and budgets.
It’s worth noting that Virginia passed similar legislation in 2018, but did not include a provision requiring the state to seek permission from the federal government. Instead, the Virginia Bureau of Insurance just implemented the legislation as of July 2018, allowing self-employed people to purchase small group plans.
Legislation to make pregnancy a qualifying event did not get a vote in 2017
In 2016, New York became the first state to make pregnancy a qualifying event that allows a woman to enroll in a health plan outside of open enrollment. HHS declined to do the same on a federal level, as have most of the other state-run exchanges — although pregnancy triggers a special enrollment period in Connecticut’s exchange as of 2019.
In 2017, five Democratic state senators in Rhode Island introduced S.201, which would have allowed a pregnant woman to enroll in a plan through Health Source RI at any time after the commencement of her pregnancy, with coverage effective immediately. However, S.201 did not advance to a vote during the 2017 session.
Rhode Island was one of only six states in 2017 with a Democratic state government trifecta. Legislation to expand access to special enrollment periods for pregnant women would almost certainly die in a state with Republican leadership, but Rhode Island had a Democratic majority in the House and Senate, and a Democratic Governor. Despite that, the legislation did not advance in 2017.
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 caused some controversy with a local Catholic Bishop, and in neighboring Connecticut, the exchange subsequently started offering four plans without abortion coverage. HealthSource RI’s former director Christine Ferguson said in November 2014 that the exchange was working with the federal government to provide a multi-state plan without abortion coverage.
In January 2015, 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 2015, 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 required carriers in HealthSource RI to offer at least one plan at every metal level that doesn’t include abortion coverage starting in 2016. The new RI provision went further than the ACA’s requirement, and has come under fire from abortion rights advocates who say that it reduces women’s access to abortion.
As a result of the new requirement, health insurers had to design new plans or alter benefits on existing plans to comply with the new regulations in 2016. More than a quarter of HealthSource RI’s private plan enrollees were slated to be automatically renewed onto plans that didn’t include abortion coverage in 2016, unless they took action to switch to a new plan by December 23, 2015.
The abortion coverage controversy continued to be a point of contention in 2018, with Governor Gina Raimondo facing criticism from Democratic primary challenger, Matt Brown, over the fact that Rhode Island’s abortion coverage restrictions are more conservative than required under federal law. But it’s worth noting that two-thirds of the plans available in 2018 in the individual market through Health Source RI did include abortion coverage. In contrast, there are 31 states where none of the exchange plans include abortion coverage at all — in many cases, because the state has prohibited abortion coverage altogether.
Health Source RI history
Former 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 HealthSource 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).
Rhode Island Governor Raimondo has said she wants to keep HealthSource RI as a state-run exchange, although she has acknowledged that funding is an issue. Anya Rader Wallack, who headed the exchange for most of 2015, wanted to continue the state-run exchange model, but noted 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.
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 2015 by Governor Gina Raimondo, also a Democrat. Prior to the election, Raimondo had said that her plan would be to keep the state-run 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).
Ultimately, Rhode Island opted to keep its state-run exchange. And as time goes by, more states are opting to switch away from HealthCare.gov and establish their own exchanges.
Contact the Rhode Island exchange
Health Source RI
More Rhode Island health insurance exchange links
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.
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 / firstname.lastname@example.org