Gov. Gina M. Raimondo’s budget includes proposals she says are intended to keep health insurance affordable for thousands of Rhode Islanders, in response to efforts by President Donald Trump and Republicans in Congress to weaken the federal Patient Protection and Affordable Care Act, nicknamed “Obamacare.”
And state lawmakers are expected to propose their own measures, including protection for people with pre-existing medical conditions.
Raimondo has included $400,000 for startup administration of a state-run health care reinsurance program in her proposed $9.9 billion state budget for fiscal 2020, starting in July. If approved by the General Assembly, the reinsurance program could go into effect next year.
Meanwhile, the governor and other ACA supporters face the possibility that Obamacare could be completely repealed or overturned. In December, a Federal District Court judge in Texas ruled that the ACA is unconstitutional. The ruling stemmed from a lawsuit filed last year by a group of Republican governors and state attorneys general. Rhode Island has joined a group of states led by Democrats appealing the ruling.
Texas Judge Reed O’Connor ruled that the ACA’s mandate requiring people to buy health insurance was unconstitutional and that the ACA’s remaining provisions are invalid. The case may eventually be decided by the U.S. Supreme Court. If the ACA is abolished, it would threaten health coverage for millions of Americans, protections for people with pre-existing conditions and more.
“If the entire ACA is stricken, including the Medicaid expansion and subsidies for lower-income individuals … many Rhode Islanders would suffer from the lack of coverage and access to needed health care,” Health Insurance Commissioner Marie L. Ganim’s office and HealthSource RI, the state’s health insurance exchange, said in a joint statement. “Prior to the ACA, our rate of persons without insurance and the amount of provider uncompensated care were at least double the current status.”
HealthSource RI Director Zach Sherman said he thinks it’s unlikely that the ACA will be wiped out – calling it a “doomsday scenario.”
“I think cooler judicial heads will prevail,” Sherman said, but added, “We’re certainly keeping an eye on it.”
Raimondo has included $400,000 for startup administration of a state-run … reinsurance program.
The Trump administration has already repealed the federal penalty established by the ACA for people who go without health insurance, known as “the individual mandate.” The repeal went into effect in January.
In addition, Sherman said, the Trump administration has cut funding for marketing and outreach to people in need of health insurance, shortened the open-enrollment period, and permitted short-term health plans to be extended up to three years.
Trump said extension of short-term plans – known as gap insurance – would help people who don’t want comprehensive health insurance and allow them to pay “a much lower price” than plans providing a full range of benefits.
Democrats, however, have derided such plans as “junk insurance.” Another problem, Sherman said, is such plans are typically geared to young, healthy people, so as they leave comprehensive health insurance pools in favor of short-term plans, it systemically drives up premiums for those remaining with comprehensive coverage, usually older and less-healthy people.
The Raimondo administration has proposed replacing the federal individual mandate penalty with a state penalty that would be used to fund part of Rhode Island’s proposed reinsurance program.
Sherman has said the proposed state penalty for those uninsured would be $695 for adults and $347 for children, or 2.5 percent of household income, whichever is higher.
The rest of the money for the reinsurance program would come from federal “pass-through” savings – something the Trump administration has been willing to concede to shift requirements of the ACA away from the federal government. The state would need the waiver to be eligible to receive those federal funds.
A Market Stability Workgroup formed last year by Ganim’s office and HealthSource RI had estimated a state-run reinsurance program would cost about $26 million a year – about $15 million coming from federal pass-through savings and $11 million from a state penalty for the uninsured.
The reinsurance program would be a way for Rhode Island to keep health insurance premiums affordable by offsetting some costs of claims for insurers that they otherwise would factor into their yearly premium rates. The reinsurance program would be tailored for the so-called “individual market” – people whose employers do not offer health insurance and those with incomes too high to qualify for Medicaid.
“The actuarial analysis is still underway on the specific details of the reinsurance program,” said Ganim’s office and HealthSource RI.
Lawmakers are also expected to consider legislation to prevent insurers in Rhode Island from excluding people with pre-existing medical conditions from coverage if that provision of the ACA is overturned, said Sen. Joshua Miller, D-Cranston, chairman of the Senate Committee on Health and Human Services. He’s also a member of the state workgroup formed last year.
Miller said the legislation he plans to sponsor could also set state requirements for coverage of prescription drugs, treatment of mental and behavioral problems and other essential benefits outlined in the ACA if it were to be repealed on the federal level. He said the legislation could be filed with the General Assembly in the coming weeks.
“It would provide for minimum standards for health insurance in Rhode Island” if the ACA is struck down, he added.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.
