How much do you pay for health insurance for your employees?
What if for 2007 you could get a health plan for as little as $329 per month? Would you drop what you have and go with it? Would you make it a low-cost option for your employees? If you’d been thinking of dropping coverage entirely, would this keep you in the market?
That is the idea behind SelectCare, a new concept for “affordable small business insurance” unveiled last week by Gov. Donald L. Carcieri as a key part of his 2006 health care agenda. The plan would be offered by all private carriers to small businesses and individuals, and cover an estimated 27,000 people.
To cut premiums even more for the most at-risk employers – small businesses paying the lowest wages – Carcieri wants to create a $100 million “trust fund” with securitized tobacco settlement money and use it to generate $5 million to $10 million per year for reinsurance.
In addition, a surcharge on “inefficient” health insurers’ administrative costs and profits – anything above 12 percent of total premium revenues – would yield another $5 million to $10 million for further subsidies for the targeted small businesses.
The goal, Health Insurance Commissioner Christopher F. Koller said, is to provide an option that’s at least 20 percent cheaper than the current offerings, but meets workers’ basic needs without exorbitant deductibles and protects them from catastrophic costs.
“The goal here is to preserve insurance for employees in small businesses,” Koller said. A recent survey found only 65 percent of businesses with 10 or fewer workers offered coverage, versus 98 percent with more than 50. At the same time, the ranks of the uninsured are growing rapidly.
Lt. Gov. Charles J. Fogarty and key legislative leaders have put forth a different approach to the same issue. Fogarty did not respond to a request for comment on Carcieri’s plan. Koller, for his part, said “it’s good that everybody’s paying attention, because it makes it more likely that we’ll be able to pass something this year.”
SelectCare is not the only big-ticket health care item on Carcieri’s agenda. The governor wants Rhode Island to borrow $20 million to pay for the hardware, software and network capabilities needed to have a statewide electronic health information network.
Some providers already have electronic record-keeping systems – Lifespan has invested millions to connect all its hospitals, labs and doctors, for example, while on a smaller scale, several doctors’ practices have formed EHR of Rhode Island together to equip their offices.
The Rhode Island Quality Institute, a collaboration between the state, health insurers and providers, has been working on the big picture, figuring out how to share data so wherever patients are treated, doctors will have quick access to their medical histories.
The institute is administering a $5 million federal grant to help plan a statewide information sharing system; the $20 million bond, said Dr. David R. Gifford, state health director, would provide the money to build it and give patients access to their own records.
Lifespan CEO George A. Vecchione said he was “delighted” by the governor’s proposal, because “this is the way we should be going.”
Carcieri’s agenda also includes measures to promote “transparency” in health care and insurance pricing.
One would require health plans to disclose to patients the negotiated amounts they pay to providers for services, procedures, tests, drugs or supplies that are subject to a deductible or co-insurance – on the Internet for common services and items, and by phone on request.
The idea, Koller and others said, is that a patient who’ll have to pay, say, 50 percent of the cost of an MRI should know he’ll pay $50 more at one facility than at another. Or if he has a plan that covers the first $1,000 in expenses, then has a coverage gap for the next $1,000, he should know which of two drugs will keep him within his allowance.
Consumer advocates such as Marti Rosenberg, of Ocean State Action, praised the measures as well as the governor’s effort to make coverage affordable – though both Rosenberg and Ann Rhodes, of Rhode Island for Health Care, noted that Medicaid cuts could add to the uninsured rolls even as the proposed reforms reduced them.
Stephen J. Farrell, CEO of UnitedHealthcare of New England, said he’d have to review the details of Carcieri’s proposal. But on “transparency,” for example, which United has long advocated, he said Carcieri’s approach “was a little different from what we had in mind.” Both insurers and major providers, in fact, have long opposed disclosure of what they consider proprietary contractual information.
Farrell wouldn’t address the subject of the “excess” administrative cost and profit surcharge, which could cost United millions of dollars. (In 2004, a state review found, 21.3 cents of every United premium dollar went to overhead or corporate profits, meaning it could face the maximum surcharge of 2 percent of premiums; Blue Cross & Blue Shield of Rhode Island, on the other hand, put 11.4 cents into administration and 1.6 cents into reserves.)
A Blue Cross spokeswoman said the company is “pleased” that Carcieri is taking on these issues, but added that “there are still a lot of discussions” that must take place.
