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Rhode Island health insurance marketplace

Default auto-renewal; plans now available without abortion coverage

  • By
  • contributor
  • November 10, 2015

Auto-renewal available for 2016

Unlike last year, HealthSource RI is allowing enrollees the option to have their coverage automatically renewed for 2016. Last year, Health Source RI enrollees who had a 2014 plan needed to renew it or switch to a new plan by December 31, 2014 in order to have coverage in place on January 1, 2015.  Plans that were not actively renewed were 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.

For 2015, the only other states besides Rhode Island that didn’t allow auto-renewal were the ones where the enrollment technology was changing so significantly that auto-renewal simply wasn’t possible (for example, Oregon and Nevada, where the state-run enrollment software was scrapped in favor of

In states using, 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 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 was obviously been much more successful in that aspect than most exchanges.

But for 2016, exchange officials determined that the benefits of auto-renewal (ie, policies aren’t terminated when insureds don’t return to the exchange during open enrollment) outweighed the benefits of requiring active renewals (ie, enrollees are more likely to be enrolled in the plan that best suits them from one year to the next, as active renewal is more likely to result in a new plan selection).

Although auto-renewal is now the default for exchange enrollees who don’t return to the exchange by December 23 to actively select coverage for 2016, it’s still in enrollees’ best interest to actively shop around during open enrollment to ensure they’re enrolled in the plan that represents the best value for the coming year.

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 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 November 2014 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 plan at least one plan at every metal level that doesn’t include abortion coverage starting in 2016. 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.

As a result of the new requirement, the current carriers have had to design new plans or alter benefits on existing plans to comply with the new regulations in 2016. More than a quarter of HealthSourceRI’s private plan enrollees will be automatically renewed onto plans that don’t include abortion coverage in 2016, unless they take action to switch to a new plan by December 23.

Additional federal funding for computer system

Rhode Island has been working to overhaul its quarter-century-old InRhodes eligibility system used by the state’s Executive Office of Health and Human Services. The system verifies eligibility for Medicaid, premium subsidies through HealthSourceRI, and other public assistance programs. In October 2015, Rhode Island officials announced that the state received an additional $112.8 million in federal funds to continue upgrading the system, bringing the total cost of the update to $380 million.

The overhaul began in 2013 and was supposed to be completed in 2015, but it’s now scheduled to continue into 2016. The new grant stipulates that Rhode Island contribute $11.9 million to the project, in addition to the $112.8 million that the federal government is paying. As a result, the state legislature will have to modify the current 2016 fiscal year budget as well as the spending plan for the coming year.

Of the $380 million being spent on the new computer system, about $80 million is being paid the state; the other $300 million is federal funding. But state officials estimate that by 2018, the new computer system will have paid for itself; it will be more efficient in terms of distributing benefits, and is also expected to curb fraud and misuse. The first phase of the system was rolled out in 2013 in time for the first ACA open enrollment period; the system was used to determine tax credit eligibility through HealthSourceRI as well as Medicaid eligibility. But it has continued to be enhanced and upgraded over the last two years.

2016 open enrollment details

Rhode Island’s normal enrollment deadline is the 23rd of the month to get coverage effective the first of the following month (this is later than the 15th of the month deadline that applies in most states). Enrollees who wish to make changes to their coverage or purchase new coverage with an effective date of January 1 must finalize their plan selection by December 23.

Open enrollment for 2016 will continue until January 31. After that, most enrollees will need a qualifying event in order to obtain 2016 coverage later in the year (Native Americans and applicants who are eligible for Medicaid/CHIP can enroll year-round).

Budget cuts hamper customer service

Leftover federal funding for HealthSourceRI is being used up in the current fiscal year, and the budget next year is expected to be even smaller than the already-trimmed budget in the 2016 fiscal year. As a result, the exchange is struggling to provide the level of customer service they were able to offer during the first two open enrollment periods.

The exchange’s call center had 150 employees during the 2015 open enrollment period, and maintained about 125 call center reps after open enrollment ended. But in August, call center staffing was reduced to 42 people, call center hours were cut back, and weekend hours at the call center were eliminated. The exchange has also had to to cut its advertising budget from $2 million to $400,000.

During the 2015 open enrollment period, HealthSource RI operated two walk-in enrollment centers – one in Warwick and one in Providence. Residents were able to get in-person enrollment help at either one. But as a result of budget cuts and declining foot traffic, the HealthSource RI walk-in center at 70 Royal Little Drive in Providence stopped offering in-person enrollment assistance in August 2015, and the Warwick walk-in center is not operational during the 2016 open enrollment.

About 80 enrollment assisters who had been working at the Providence walk-in center were reassigned to other non-exchange positions in the state, and the walk-in center is now functioning as a place where people can pay their premiums or drop off documentation. Rhode Island residents needing help with enrollment are instead being referred to navigators and brokers around the state. As a result of the reduced call center staffing, Rhode Island residents encountered longer hold times at HealthSourceRI this fall.

But things are somewhat improved for open enrollment. HealthSourceRI added 80 additional call center staffers to work during the current open enrollment period, and also began receiving phone assistance from the state’s Health and Human Services Office, since the majority of the calls that HealthSourceRI fields are from Medicaid-eligible residents. The exchange has also been working to enhance the self-service features on their website in order to reduce call volume.

2016 rates – weighted average < 6.5 percent

Three carriers offer individual plans in HealthSource RI.  Rates were finalized by the insurance commissioner in late August, although there was some uncertainty for the next month due to a lawsuit filed by Rhode Island’s Attorney General in an effort to lower the rates that were approved for Blue Cross Blue Shield of Rhode Island.

United Healthcare of New England requested an average rate increase of about 11 percent for their Compass individual plans.  The state approved a base rate increase of 4.1 percent (weighted average increase of 2.7 percent).

Neighborhood Health Plan of RI 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).

Blue Cross and Blue Shield of Rhode Island initially proposed an 18 percent increase (weighted average of 11 percent) for their individual market plans in RI, but in early July, they revised their request to a 14 percent rate hike (weighted average rate increase of just 7 percent).  The lower rate proposal was partially due to the fact that in the FY 2016 budget (see below), the HealthSource RI premium fee is lower than initially proposed.

Rhode Island Insurance Commissioner Kathleen Hittner reduced the proposed rate hike from 14 percent 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.

At ACAsignups, Charles Gaba calculated a weighted average rate hike of just under 6.5 percent in Rhode Island (that’s including off-exchange enrollments – it’s about 6.28 percent if we only include exchange enrollments), assuming that BCBS ends up with the 7 percent weighted average increase they proposed in July.  But it’s their approved weighted average rate hike is likely lower than 7 percent (despite the fact that the AG’s lawsuit was unsuccessful), since their approved base rate hike was smaller than proposed (10 percent versus 14 percent).

Kaiser Family Foundation analyzed benchmark (second lowest-cost Silver) plan premiums in major metropolitan areas across the US to see how much they were changing for 2016. The benchmark plan is important because it’s what premium subsidies are based upon. It can be a different plan from one year to the next, so the change in the benchmark premium doesn’t really tell current policy-holders how much their own premium will change in the coming year. But in Providence RI, the benchmark plan is only increasing in price by 1.2 percent for 2016, as opposed to a 10.1 percent increase for benchmark plans nationwide.

Competition drives changes in market share

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.

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 2015 open enrollment period.

Exchange director appointed to run RI Medicaid

At the end of October, 2015, Governor Raimondo appointed HealthSourceRI director, Anya Rader Wallack, to lead the state’s Medicaid program. Rader Wallack began her new role at Medicaid in November, and Zach Sherman, her HealthSourceRI chief of staff, will serve as acting director while the exchange seeks out a replacement for Rader Wallack.

Rader Wallack joined HealthSource RI at the end of 2014. Raimondo, who was the Governor-elect at that time, 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 came from Vermont, where she was very instrumental in the push for single payer healthcare in Vermont (that effort was abandoned in December 2014).

uninsured rate drops by nearly 80%

According to Gallup, 13.3 percent of Rhode Island residents were uninsured in 2013.  By June 2015, that number had fallen nearly 80 percent, to just 2.7 percent – the lowest in the nation. A study conducted by HealthSourceRI also indicated a sharp drop in the uninsured rate, but not as significant ans the Gallup survey. HealthSourceRI data indicates that the uninsured rate was 11 percent in 2012, and fell to 5 percent by 2015.

According to Kaiser Family Foundation data, there are still 55,000 uninsured residents in Rhode Island. Nearly half of them are eligible for Medicaid, and 23 percent are eligible for premium subsidies through the exchange. HealthSourceRI is working to target as many of the remaining uninsured as possible during the 2016 open enrollment period.

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 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, the same as the fee assessed by in states that use the federally-run marketplace. But in Rhode Island, 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.  Raimondo had initially proposed a higher fee schedule, but the final version of the budget sets the assessment at 3.5 percent.

The state is also providing 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.

Although nationwide, there was a further decline in effectuated enrollments during the second quarter of 2015, that was not the case in Rhode Island. By the end of June, effectuated enrollments through HealthSourceRI had climbed to 32,451.

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.

Funding issues

RI lawmakers have long debated 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 2015, 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 began July 1, 2015 was projected to be $27.68 million.  And while the federal government funded the exchange in the first two fiscal years, remaining federal funding was expected to account for only a little over $9 million in the 2016 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’s then-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.  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.

Future switch to

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 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 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 or working with Massachusetts to form a regional exchange).

Although the legislation calling for a switch to 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

Or create a new state regulatory agency?

And another 2014 bill, known as the HealthRIght Bill (H7819) would have created a Rhode Island Healthcare Authority that would consolidate all of the insurance regulatory function that is currently spread across several agencies.  The bill would have also required that all insurance in Rhode Island be purchased via HealthSource RI (currently, Vermont and DC have similar regulations, but every other state allows for off-exchange plans).  H7819 was considered by a House Committee in June 2014, and was held for further study.

H7819 was 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.

New plans, benchmark prices lower in 2015

The high-performing HealthSource RI exchange offered 20 plans from three carriers in 2015, up from two in 2014. And there wasn’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) raised 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) decreased its base rate by 7.3 percent.  Between the two carriers, the weighted average rate increase was about 4.3 percent.

United Healthcare joined the exchange for the first time, which further helped to increase competition and hold down rates (United participated in the RI SHOP exchange in 2014, offering small business plans, but began 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 were willing to switch to the new benchmark plan in 2015, premiums were 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 were 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.  Former 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. By late 2015, the uninsured population had dropped to about 55,000 people.

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 /