The WellCare Advisory Committee faced a tough task when it was convened three months ago. The R.I. General Assembly had approved a plan to offer more affordable health insurance to small-business owners; the committee’s job was to set guidelines for the new products.
The members didn’t start from scratch. The law passed this year providing for a new Wellness Health Benefit Plan, known informally as “WellCare,” already included some parameters, which made the panel’s work particularly challenging, said Matt Stark, spokesman for the R.I. Office of the Health Insurance Commissioner.
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The average premium of the plan, for example, must be 10 percent of average wages in Rhode Island, or $314 per month. The plan can only be offered to businesses with 50 or fewer workers or to individuals ineligible for group coverage. And there were four “affordability principles” the plan must follow.
“Then they had to come together and say, ‘What are the more refined criteria within which the insurers will design these plans, and how can we work the tradeoff so that we get down to this price point of $314?’ ” Stark said. “It’s a tough price-point to hit.”
But the group did just that.
The committee recently completed the WellCare request for proposals and gave it to Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare of New England, Stark said. Now it’s up to the health insurers to come up with a product that is compliant with the RFP’s criteria set forth; the due date for their responses is Jan. 2.
Debora Spano, spokeswoman for United, said the insurer hopes the state-initiated WellCare plan will be an attractive product for its small business customers.
“There’s a lot of innovation in the commissioner’s RFP,” she said. “We do think it’s something that’s needed. We need to make a change.”
But Spano said she doesn’t know whether the proposed plan requirements will be easy to fulfill. United and Blue Cross are waiting for answers to questions they asked last week, at an informal meeting with Health Insurance Commissioner Christopher F. Koller and other officials.
“We’re doing everything we can to work with them,” said Kim Keough, spokeswoman for Blue Cross. “We’re trying to make it feasible.”
The WellCare plan targets small business employers and individuals “because our survey from 2005 shows that these are the areas we’re getting our uninsured from,” Stark said. Small businesses employing one to 10 people find it most challenging to offer health insurance, because of the expense.
“We anticipate that for those small employers who are thinking, ‘I don’t know if I can keep [offering health insurance],’ that this is going to be something that keeps them in the game,” he said.
At the same time, however, the committee is concerned about managing expectations of the plan. Panel members don’t anticipate that many uninsured people will sign up.
“At $314, you’re not going to have a lot of uninsureds jumping on the bandwagon,” Stark said. “This is about keeping the insureds insured as premiums and medical costs rise annually.”
In addition, he said, the committee had significant tradeoffs to consider in formulating the plan. It had to decide, for example, whether to try to generate a lower premium by increasing the consumer co-pay or by increasing the deductible.
Incorporating the four affordability principles was a challenge as well. They are meant to ensure that the WellCare plan addresses “the underlying cost drivers” instead of just shifting costs, Stark said.
That’s why the plan emphasizes a focus on primary care, prevention and wellness; actively managing the chronically ill population; the use of the least-cost, most appropriate settings to deliver health care; and the use of “evidence-based” care.
For example, the plan will provide incentives for consumers to participate in disease management programs because it cuts health care costs in the long run. It will also provide incentives for consumers to go to their primary-care physician instead of the emergency room, except in true emergencies.
Stark said he could not release the details of the RFP the panel submitted to insurers because the parties are still in meetings to work out how insurers will comply. But he expects to release the information by mid-December.
“We’re really excited for what this product stands for,” he said. “It’s a product designed to address the rising trend and actually cut costs.”
