Can HealthSource RI compete?

Does the decision by UnitedHealthcare of New England’s parent not to participate in HealthSource RI in 2017 portend trouble for the state-run health exchange?

One insurance broker thinks so, at least in regard to the commercial market.

James Raiola, a Warwick-based certified financial planner and broker who sits on UnitedHealth’s advisory board, thinks state exchanges are having trouble competing.

“I’m concerned about the future relevancy of HealthSource RI in the commercial market,” said Raiola, president of James Raiola CFP and Associates. “Carriers continue to offer a wide variety of plans and the ability to select [more than one], addressing the marketing advantage HealthSource RI initially had,” he said.

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UnitedHealth Group Inc., the biggest U.S. health insurer, earlier this month said it will drop out of all but a “handful” of state exchanges due to concerns they aren’t profitable enough.

HSRI spokeswoman Maria Tocco said customers using UnitedHealth plans through the exchange will have to pick new plans in 2017, but doesn’t think the insurer’s exit will significantly impact the exchange.

UnitedHealth offers seven of the 24 plans available to small-business customers on the exchange, she said.

According to HealthSource RI, 12.5 percent of state-exchange customers were enrolled in UnitedHealth plans and 50 small businesses, 9 percent of employers, were associated with a UnitedHealth plan. Forty-four employers were associated with a UnitedHealth plan in 2014 and 51 in 2015.

“We’re confident small businesses will still find a wide range of plans that meet their employees’ needs,” Tocco added. Besides UnitedHealth, Blue Cross & Blue Shield of Rhode Island and Neighborhood Health Plan of Rhode Island also currently offer plans on the exchange.

Neighborhood Vice President of External Affairs Brenda Whittle said the company is “ready and willing” to pick up UnitedHealth customers. Neighborhood currently offers 11 plans on the exchange, five of which are geared toward small businesses.

HealthSource RI has tried to lure more businesses to the exchange in recent years, with limited success.

In 2014, 414 small businesses offered plans through the exchange. Last year that number rose to 552. Employers that provide insurance to employees through the exchange are eligible for a federal tax credit.

Al Charbonneau, executive director of the Rhode Island Business Group on Health, says HealthSource RI will have to offer more to lure businesses in large numbers going forward.

“The [enrollment] numbers speak for themselves,” he said. “Small businesses have relationships with brokers and they’ve done as well on the exchange as they have off. The market is speaking and the challenge is, what can HealthSource RI do to make up the difference?” •

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