Lt. Gov. Charles J. Fogarty has released a 19-point package he says is a comprehensive
strategy for dealing with many of the state’s health care issues.
The reforms, part of a package called “Moving Toward Excellence,” are the
first set of guidelines aimed at changing legislation on this issue. It is the
culmination of what has been six months of work and it is a plan, he says, that
will keep the state on the cutting edge.
A handful of the proposals directly target businesses.
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Those who have seen the plan say they will take a closer look at the proposals
once the actual bills associated with the plan are released.
“Conceptually, I do not see anything that we could argue with,” said Jim Claffey,
co-founder of the 1-month-old Rhode Island Business Health Care Advisors, a
trade and lobbying group for insurance brokers and employers. “The issue is
affordability, and there may not be enough money to go around to make this work.”
The objectives are expected to be translated into bills, some authored by
his office and others to be proposed by other legislators he intends to support,
to be considered by the Legislature starting next month.
He said he’s expecting this to be a long process.
“There is no silver bullet to solve all the health care problems,” he said.
“It’s going to take a coordinated effort to stem the increase in costs and to
make health care more affordable.”
Among Fogarty’s ideas is the creation of a R.I. Small Group/Individual Health
Plan. It would create an office to develop a program to provide small businesses
with 25 or fewer employees, the self-employed and individuals with an opportunity
to subscribe to a state-run plan.
The proposal calls for the creation of the Rhode Island Small Group/Individual
Health Plan to be overseen by a state purchasing office or authority. The office
would determine the most feasible way to provide health care coverage, in which
Fogarty has a few suggestions:
• Allow those wishing to obtain such health coverage to join the state’s RITE
Care program
• Pool those interested with the larger state employee health plan, or
• Solicit bids from private health plans to contract with the state to administer
a new small group/individual health plan.
Mark Hayward, director of the Rhode Island district office of the Small Business
Administration, said the idea of pooling employees is in line with a national
SBA initiative to create associations of employers to purchase health plans.
These associations could possibly attract more health insurers back into the
state.
“If we put an association’s request out to bid, it could open the door for
more competition,” he said. “My assumption is that this will lead to lower rates.”
The proposal is in line with a bill brought before the Legislature last year
by Sen. Elizabeth H. Roberts, a Cranston Democrat. The bill was not acted upon.
It’s one that will probably have a price tag associated with it, a condition
that may make it difficult to pass given the state’s fiscal troubles.
Fogarty said other provisions in his strategy are expected to be cost-savings
to the state and would cover increases in other areas.
He points to a proposal to strengthen the state’s capabilities to purchase
prescription drugs based on the Maine Rx program. Fogarty says this could save
5 percent on what the state spends on prescription drugs.
Claffey said members of his newly formed organization met with Fogarty the
day before the plan was announced to the public, but he didn’t get a chance
to look at the small group portion in-depth.
Also, part of Fogarty’s proposal is a measure that calls for a review of the
state Department of Business Regulation’s ability to oversee rate settings by
health insurers. It calls for standards monitoring and planning of the state
Department of Health to determine if it has the “proper tools to its job.”
It suggests creating a separate Office of Insurance Commissioner with a strengthened
role in rate setting and provider reimbursement for health plans.
The Fogarty plan also calls for the review of requirements that say health
insurers must have a reserve account, a mandate established in 2000 following
the withdrawal of a major insurer from the state.
Blue Cross & Blue Shield of Rhode Island has been criticized for its initiative
to bolster reserves to 22 percent, or roughly $275 million.
Rate payers say this isn’t fair given that premium hikes have hit 17 percent
on average this year.
Blue Cross spokesman Scott Fraser said regulations creating a third office
would add another layer of bureaucracy that could confuse what are already strict
regulations in Rhode Island.
This has been a factor in keeping other health insurers from coming to the
state, he said.
“Many times there have been pushes for more regulation and more competition.
But, the two don’t go hand in hand,” he said. “Rhode Island’s regulations do
not always make it attractive for competition to come to our state.”
He added that the company is not willing to comment on Fogarty’s specific
proposals at this time.
“We need to see the specific proposals to see their effects and what we would
do,” he said.
Another recommendation calls for expansion of the 1996 Zainyeh law, which
created accountability benchmarks for health insurers.
Fogarty is calling for admissions of administrative costs and for health insurers
to let enrollees know up-front how drug costs are used to determine co-payments.
Also, Fogarty wants legislation to require health insurance subscribers to
be directly notified anytime an insurer files for a rate increase that is greater
than the prior year’s medical inflation index.
The state should expect to see a number of legislative bills and initiatives
by elected officials to address health care issues in Rhode Island. Gov. Don
Carcieri and Secretary of State Matthew A. Brown have created committees to
look into ways to temper the rising cost of health care.
John Deal, of the insurance firm Starkweather & Shepley Inc. in Providence,
said a forum on the subject is welcome considering health care will likely be
one of the hot topic issues this legislative year.
“A general discussion is favorable,” he said, adding that cost and affordability
will be a major consideration of members of the business world.
