Sherman: HSRI premiums may spike 50% without mandate

PROVIDENCE —  HealthSource Rhode Island’s 12 percent enrollment increase was the greatest among state-based Affordable Care Act exchanges this year, but the individual mandate expiration will cause up to a 50 percent premium spike for individual plans over the next three years, said HSRI Director Zachary Sherman.

Sherman’s analysis was based on data from the Congressional Budget Office.

Given the state’s current deficit and projected deficit in 2019, Sherman said, he doesn’t expect to receive increased marketing resources to overcome the effect of the individual mandate’s expiration next year. Rather, he said during a press conference call on the relative stability of state based exchanges in 2017, the only practical solution would be a state-level individual mandate.

Some states have reported they expect increased marketing will overcome the loss of the federal mandate, which still levels tax penalties in 2018 against people who fail to purchase health insurance if they don’t receive it through their employer. The mandate remains in 2019, but it is toothless. The penalty was zeroed out by the recently passed Republican tax bill.

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Without the mandate, Sherman said, healthy people lose their incentive to buy into the health insurance market, which will leave mostly ailing and those with failing health in the market.

“Basically, turning the individual market into a high-risk pool,” Sherman said.

In 2019, “Whether or not I want more money for advertising is kind of a moot point because I’m not going to get it,” Sherman said.

HSRI’s advertising budget is now 85 percent of what it was when the agency launched, said Kyrie Perry, director of communications, marketing and outreach for HSRI. The agency’s overall budget has remained stable for the past two years, and is about the same in 2018, at $12,774,000.

But in 2019, federal grant dollars to the program drop to zero from $4.1 million, leaving HSRI with a total of $8,590,000, according to figures from Perry. In 2018, spending on marketing and outreach is budgeted for $901,000, which drops to $850,000 in 2019.

“The marketing and outreach budget includes our Navigator network contract, management of our front-end website, creative service costs and our media buy, among other things,” Perry said.

Even so, Perry pointed out the agency’s advertising and marketing plan has been carefully targeted for maximum effect, which aided in growing the number of enrollees to 33,021 for 2018 in just two-thirds of last year’s enrollment period.

“Despite the cuts to our marketing dollars we have continued to see growth in our enrollment,” Perry said.

Perry said her office has a very good idea of both who their customers are and who the uninsured in the state are.

“So we can be very targeted in our efforts,” she said.

But, Perry said, additional marketing dollars, however shrewdly spent, are unlikely to overcome the news of the now-toothless individual mandate. People who are reluctant to purchase health insurance without a financial penalty are unlikely to be persuaded by any amount of marketing, she said.

Rob Borkowski is a PBN staff writer. Email him at