RIPEC: HBE success requires ‘thoughtful approach’

RIPEC, the nonpartisan public policy research organization, has released a report describing the state's health benefits exchange and providing recommendations for implementation.
RIPEC, the nonpartisan public policy research organization, has released a report describing the state's health benefits exchange and providing recommendations for implementation.

PROVIDENCE – The success of Rhode Island’s Health Benefits Exchange requires a “thoughtful approach,” according to a report from the Rhode Island Public Expenditure Council issued Wednesday.

The report, “Rhode Island’s Health Benefit Exchange: Progress and Challenges,” describes the state’s proposed health benefits exchange and provides recommendations for implementation.

“Success of the exchange requires a thoughtful approach to expanding access to health coverage without making unnecessary demands on the budget,” RIPEC Executive Director John Simmons said in prepared remarks. “Rhode Island has the opportunity to be a national leader in this area by taking prudent action with regard to exchange development and implementation.”

According to RIPEC, the HBE, which is central to the Affordable Care Act’s goal of expanding insurance coverage by providing a market for affordable health care plans, has the potential to reduce the state’s uninsured population.

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In December, the federal government granted Rhode Island conditional approval for its exchange blueprint. Federal grants for exchange development totaling $64.8 million are the 13th highest nationally and the second highest per capita, according to the RIPEC report.

“The exchange has the potential to reduce the state’s uninsured population by providing access to transparent and affordable health insurance plans,” said the report. “However, the long-term sustainability of the HBE depends on a number of factors, including how many individuals access insurance through the exchange.”

RIPEC said the exchange population must be large enough to fund operations and to “leverage economies of scale to offer affordable plans.”

According to the report, eligibility decisions made by Medicaid will impact the demographics and size of the population purchasing within the exchange. “In order to ensure the viability of both, the state must consider the number and type of individuals who will fall under the purview of [either Medicaid or the exchange],” said RIPEC.

RIPEC also said that the exchange must be designed to successfully attract consumers. “The system needs to be designed to be easily navigable for individuals with low levels of health and computer literacy,” recommended the nonprofit public policy organization. “Exchange construction should focus on a user-friendly interface that educates consumers while emphasizing access and transparency. Consumers should be able to manage both the process and the choices available to them to encourage participation.”

The state must also consider how it will ensure that the Health Benefits Exchange is self-sufficient, as mandated both by Gov. Lincoln D. Chafee’s executive order and federal law, insisted the report.

“If the HBE is supported by premium assessments or user fees, the revenue generated will be dependent upon the number of purchasers,” said RIPEC. “Uncertainty about the number and type of consumers participating in the exchange make prudent budgeting imperative, especially in the first years of operation.”

According to the report, a properly organized exchange not only will facilitate expanded access to health insurance coverage, but also has the potential to generate additional positive returns in Rhode Island, including the expansion of the health care industry and an influx of additional federal funds throughout the state.

“Reducing the number of uninsured Rhode Islanders through an accessible and user-friendly exchange interface may also improve health outcomes, decrease spillover costs associated with uncompensated care, and improve workforce productivity,” said RIPEC. “In order to ensure the HBE reaches its goals, high levels of accountability, with clear delineation of responsibility, and adequate oversight are imperative.”

To view the full report, visit: www.ripec.org.

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