Consumer choice the future for R.I. health insurance

INFORMATION EXCHANGE? Evan McKay, a restaurant employee who lives in Providence, says there’s a lack of information about the exchange he finds “problematic.” / PBN PHOTO/TRACY JENKINS
INFORMATION EXCHANGE? Evan McKay, a restaurant employee who lives in Providence, says there’s a lack of information about the exchange he finds “problematic.” / PBN PHOTO/TRACY JENKINS

In its simplest form, the new R.I. Health Benefits Exchange is a sea change in business models for commercial health insurance, moving from business-to-business to business-to-consumer, according to Peter Andruszkiewicz, president and CEO of Blue Cross & Blue Shield of Rhode Island.
For the first time, individual Rhode Islanders – and employees of small businesses with fewer than 50 workers – will have the opportunity to research, compare, shop and buy their health insurance, choosing between 28 different commercial health-insurance plans offered on the exchange beginning Oct. 1, when open enrollment starts.
The biggest change will be for the small businesses that can participate in the exchange. They begin by deciding on a minimum benefit contribution for employees, paying that on a monthly basis to the exchange, and then sending the workers to shop for their health plans, according to Christine Ferguson, executive director of the Health Benefits Exchange.
These businesses no longer will have to manage the difficult human resources function of choosing the best health plan for a diverse workforce.
Businesses and consumers, however, will not be set adrift in the process, to fend for themselves, according to Ferguson. A robust customer assistance framework is being built, including a call center, personal navigators and insurance brokers, who will be compensated.
For many Rhode Island consumers, business owners small and large, and even legislators, the shift to a consumer-choice business model is not well-understood. Specific details about benefits and rates will not be made fully available until after July 15, when the new health plans and rates will be officially certified as meeting federal requirements.
“Change is hard, it’s very hard,” outgoing R.I. Health Insurance Commissioner Christopher F. Koller said to members of the R.I. Healthcare Reform Commission at its meeting on June 27. The exchange will begin a multimedia marketing campaign in July across multiple channels to inform, educate and engage with Rhode Islanders – and attract customers. The campaign will deploy television, radio and print, digital and social media, direct marketing and out-of-home vehicles such as billboards. The budget is not available, because an RFP is pending, according to Ferguson.
The size of the enrollment base is well-quantified, according to a draft marketing plan prepared by Ian Lang, who directs communications efforts for the exchange.
• In the individual, non-Medicaid market segment, there are about 60,000 individuals – about 44,000 uninsured and another 15,000 currently with insurance – with a range of $150 million to $250 million in annual potential premiums.
• In the small-business market segment, there are about 14,973 small businesses with about 109,000 employees who currently offer health insurance, and 15,521 small businesses with 45,642 employees who currently do not offer health insurance, with a range of $200 million to $600 million in annual potential premiums.
One customer eager to buy health insurance on the exchange is Evan McKay, 29, who has worked for three years at a restaurant in Providence’s Knowledge District that has been unable to offer employees insurance because of the cost. “As I get older, approaching my 30s, I realize that it’s very important to have medical records and go to someone who knows your body,” McKay said.
McKay called the current lack of information about the exchange problematic. “It’s already July, and I’ve gotten no information. There’s no Facebook or Twitter page yet. I’ve gone to the website, but it’s a broken-link website.”
Valerie Ann Leduc, vice president of operations at Angelo’s Civita Farnese restaurant on Federal Hill, an outspoken member of the R.I. Health Insurance Small Employer Task Force, said she is taking a wait-and-see attitude toward the exchange. “It’s too early for us to know,” she said, explaining that the company’s health insurance policy renewal is in December. “I know where we are. … Let’s see how things play out when the exchange opens.” In the expected 400 percent expansion of the individual market from its current 15,000 to 60,000, another key demographic will be baby boomers between the ages of 45 and 64, many of whom have been marginalized by the economy, either becoming self-employed or working part time.
Claudia Cristaudo, 57, of Barrington, who works part time for an insurance adjustor in an administrative capacity, currently has health insurance through Blue Cross’ Direct Pay program. She recently renewed with Blue Cross, with a policy that has a $5,000 deductible, and allows for one general check, one OB-Gyn visit and one mammogram.
“Everything else you pay for yourself,” she said. A bout with pneumonia last year cost her $800 out of pocket.
She was surprised to learn about the exchange, which she first heard about from a fellow dog-walker on the East Bay Bike Path in Barrington. “I’m definitely going to see what better plans and coverage I can get for the same price,” she said.
In the future, many of the new insurance plans on the exchange will feature networks of providers linked with hospitals and medical groups, according to Andruszkiewicz, who said he was in conversations with Lifespan, Care New England and South County Hospital about such new products.
These plans will replace preferred-provider organizations. “I look at this as making people better educated, and better health care consumers when there is skin in the game for them as well.” •

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