RIPEC: HealthSource RI offers low premiums, high deductibles

ACCORDING TO A REPORT released Tuesday, Rhode Island's average premium rates in the individual/family marketplace are among the lowest in new England, but its deductibles are among the highest. The state's deductibles across Gold, Silver and Bronze exchange plans for both families and individuals came in at the highest or second-highest in the region. / COURTESY R.I. PUBLIC EXPENDITURE COUNCIL
ACCORDING TO A REPORT released Tuesday, Rhode Island's average premium rates in the individual/family marketplace are among the lowest in new England, but its deductibles are among the highest. The state's deductibles across Gold, Silver and Bronze exchange plans for both families and individuals came in at the highest or second-highest in the region. / COURTESY R.I. PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – Despite widely criticized technical problems that stymied the launch of the federally run health exchange website HealthCare.gov, Rhode Island’s public health insurance exchange, HealthSource RI, opened with minimal malfunctions, according to a Rhode Island Public Expenditure Council report released Tuesday.

In the first month of the exchange, which opened on Oct. 1, 4,405 individuals enrolled through the online HealthSource RI portal, RIPEC reported, of which 3,213 registered for Medicaid programs and 1,192 registered for private insurance.

Regionally, Rhode Island’s average premium rates in the individual/family marketplace are among the lowest in New England, but its deductibles are among the highest, as illustrated by a side-by-side comparison in the RIPEC report.

The size of the deductibles for exchange-based plans comes despite Rhode Island’s decision to keep in place the Affordable Care Act-mandated limits on out-of-pocket consumer costs of $6,350 for individual plans and $12,700 for family plans, an aspect of the law that President Barack Obama had decided to delay implementing until Jan. 1, 2015.

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Since only Vermont and Massachusetts offer Platinum plans, and only Rhode Island, Massachusetts and Maine offer Catastrophic plans, the RIPEC report only compared rates in the Gold, Silver and Bronze categories.

Rhode Island’s average Bronze Plan premiums for 21- ($171) and 40-year-olds ($218) are the lowest in the New England region, while the average rate for 60-year-olds ($463) is third-lowest, behind Massachusetts ($429) and Vermont ($348).

Silver Plan premium rates for 21- ($228) and 40-year-olds ($291) in the Ocean State are the second-lowest in the region, but the state’s rate for 60-year-olds ($618) is the third-highest, with only Connecticut ($780) and Maine ($749) posting higher rates.

The Rhode Island average Gold Plan premium rate for 60-year-olds ($739) is the second-highest in New England, just below Maine’s rate of $941. The 21- ($272) and 40-year-old ($348) rates come in at third-lowest, higher than the respective rates in Connecticut and New Hampshire.

Overall, Rhode Island’s premiums are most similar in price to exchanges in New Hampshire and Maine, both of which are federally operated, the RIPEC report stated.

Rhode Island’s deductibles across Gold, Silver and Bronze exchange plans for both families and individuals came in at the highest or second-highest in New England.

Average family deductibles for Bronze ($11,475) and Gold ($2,500) plans are the highest in the region, while the average Silver Plan family deductible ($5,800) are second-highest below Connecticut ($6,000). For individual plans, Rhode Island’s Bronze ($5,738), Silver ($2,900) and Gold ($1,250) deductibles all ranked second-highest.

Among the New England states, Rhode Island has the second-highest number of plans, 12, in its individual market health insurance exchange. Massachusetts offers 95 plans through its exchange, while Connecticut offers three plans, Maine and Vermont offer two plans, and New Hampshire offers one plan.

In September 2011, Gov. Lincoln D. Chafee established the Rhode Island Health Benefits Exchange – later renamed HealthSource RI – as a division within the executive office with $83.8 million in federal grants for startup costs. Since then, HealthSource RI and SHOP have spent $69.6 million on the calling center, consulting work, IT framework, IT updates and an ongoing marketing campaign.

“Although the R.I. exchange is up and running, the exchange must be fiscally self-sustainable by 2015 and codified into law, leaving critical decisions yet to be resolved,” the RIPEC report stated.

The report identified several of those considerations, including:

  • The implications of expanding the state’s definition of a small business from those with fewer than 50 employees to those with fewer than 100 employees, which would open 11.6 percent of Rhode Island’s workforce to exchange eligibility.

  • The question of HealthSource RI’s organizational structure and whether the exchange should be codified into law or continue to exist under executive order.

  • The fiscal implications of the number of Medicaid enrollees versus private insurance enrollees as a share of total enrollees.

  • The consideration of potential sustainable revenue streams to fund HealthSource RI, including premium surcharges, flat-rate user fees or a broad-based tax on consumers.

“The intent of the exchange is to increase the transparency of premium rates and the cost of claims, increase the pool of those insured, and gradually decrease the cost of insurance while improving health outcomes over the long run,” the RIPEC report said. “HealthSource RI has met the first of these goals; by publishing comprehensive rate sheets, HealthSource RI has made its process transparent, easing rate comparisons to other New England states.”

However, the report concluded, the decisions yet to be made regarding the considerations raised in the report “will determine the sustainability and effectiveness of HealthSource RI for years to come.”

To view the complete report, titled “HealthSource RI: Status Updates,” visit www.ripec.org.

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