Everyone pays for exchange

HealthSource RI will transition from a federally supported health care benefits exchange to one supported by the state over the next year, in part through a direct $2.6 million appropriation recommended in the fiscal 2016 budget approved by the House Finance Committee.

The proposal, expected to be considered by the full House this week, also would create a new fee on monthly health care premiums paid by individuals and small businesses, including those who do not participate in the exchange, to support its operation.

The proposed assessment for individuals and small business was lowered from what the governor had initially proposed, to 2.86 percent for individuals and to 0.59 percent for group business plans. Altogether, they will generate about $6 million needed to stabilize the operating budget of the health care exchange in fiscal 2016, which begins in July.

The lowered fee structure is the same method and rate used in states that use the federal exchange, according to the House leadership.

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The state financing would provide a revenue stream that will stabilize the exchange, which is preparing for the end of federal financial support in 2016, according to HealthSource RI Director Anya Rader Wallack.

But should the state be financially supporting the exchange at all? Small-business advocates said last week the new assessments and direct appropriation demonstrate that the state’s exchange is not self-sustaining and needs tax support to continue.

The exchange announced earlier this month it had reached 503 small-business enrollments, representing more than 2,000 employees and 1,500 family members.

Given the assessments on businesses that do not participate in the exchange, and the proposed direct state support for call-center operations and technology, “it is in our organization’s opinion, not self-sustaining,” said Don Nokes, president of the Rhode Island Business Group on Health, an organization of 95 companies that advocates on issues relating to health care costs. The organization’s companies employ about 65,000 people.

HealthSource RI offers participating small-business employees access to 20 different health insurance plan options from three carriers, Blue Cross & Blue Shield of Rhode Island, Neighborhood Health Plan of Rhode Island and UnitedHealthcare.

One of its selling points, Rader Wallack said, is that employers can determine how much they want to contribute, and employees can then choose from any of the plans offered and select the level of coverage, including premium, that works best for them.

If the budget assessment is approved, some businesses may pass that cost on to employees. But for some companies, the increased costs can be a tipping point, said Al Charbonneau, executive director of the Business Group on Health. They may look for other alternatives.

“It impacts no matter how you look at it,” he said. •

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1 COMMENT

  1. The RIBGH in its current iteration was founded, supported, and remains heavily influenced by the health insurance brokers who are threatened by the Exchange. Total broker fees in RI are estimated at over $40 million, far more than the cost of operating the exchange. And, these costs are assessed to small business policies regardless of whether that business even uses a broker. The exchange is a powerful tool of businesses to aggregate their purchasing of health benefits to lower costs, something the brokers and their insurer partners have never managed to accomplish.