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Thursday
Jun192014

Setting the Record Straight: Why We Need to Keep HealthSource RI Local

As a greater portion of health care reform dialogue is turning toward costs, many are concerned that the Affordable Care Act, particularly the health benefit exchanges created in fall of 2013, is not delivering “affordability” as the law’s name promises. The brimming tension around the exchanges is palpable especially here in Rhode Island. Earlier this month, the fate of Rhode Island’s health benefits marketplace, HealthSource RI (HSRI), was considered by the House Finance Committee in a bill (H7817) that would dissolve HSRI and default to the federally-run exchange.

The hearing may be over, but the shockwaves are not. Amidst the testimonies given and the continued debate, HealthRIght would like to acknowledge why keeping HSRI local will be part of the solution to providing affordable, high value health care for all Rhode Islanders

Is HealthSource RI Viable? Absolutely

Opponents of HSRI staked their claims from a 2009 Robert Wood Johnson Foundation report discussing the viability of the Exchange. Among the reasons listed was that the exchange would not be effective because—prior to the ACA—our small state had just one insurance carrier (BCBS) that offered plans to individuals.  Josh Archambault, who flew in from Florida’s Foundation for Government Accountability, testified, “You can't expect dramatic impact with a statewide exchange of 28,000 people." In GoLocal Prov on June 3rd, Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity wrote, "This report shows that cost containment is not a viable goal”.

HealthRIght agrees that 28,000 people is not enough to lead to a viable Exchange. However, we believe that rather than just getting rid of it, the solution is to keep bringing in more people and use HSRI to address the cost challenges we face in the state. Making the best of HSRI, our only tool we have to address the cost problem, entails aggregating purchasing dollars and using that as leverage against administrative bloating, incentivizing insurers and providers and consumers to do their part to contain costs. 

According to Lieutenant Governor Elizabeth Roberts’ response piece on GoLocal Prov, Rhode Island is leading the nation with resounding success in health care reform implementation. Not only can Rhode Islanders expect less expensive plans next year on HSRI, there is growing competition in the health insurance market, and new innovative options for small businesses. Neighborhood Health Plan has filed lower rates for next year, and will offer individual plans on the exchange- plans which Rhode Islanders otherwise would not be able to access. We should not rely on a 5-year old report that at this point may be too outdated. Rather, we should capitalize on Rhode Island’s forward-moving health care reform momentum and recognize that success takes time and is within our reach if we work together.  

HSRI is Part of the Solution for Rhode Island’s Cost Issue

HealthRIght recognizes that while the problem of cost is widely recognized, what to do about it is an ongoing debate. The scale of the problem is no small matter – Rhode Islands spends $9 billion per year on health care, which is about 17% of Gross State Product[1]. Our healthcare costs have doubled every 9 years over the past 30 years[2]. According to another study, at its current trajectory, average household health care costs will exceed household median income by 2038.

 If HSRI can save half of a percent of the $9 billion Rhode Island spends on health care, it would save $80 million. The problem in RI, however, is that while we want the benefits of HSRI, people are very concerned about how to pay for it, hence bringing up the possibility of turning over to the federal exchange.

During the hearing for H7817, voices from both sides provided testimony. HealthRIght mobilized several advocates for HSRI in opposition to the bill. The Projo’s HSRI hearing coverage incorrectly stated that supporters of H7817 were "lined up.” However, it was the reverse with groups and individuals representing small business, community advocates, state agencies, and policymakers testifying to oppose H7817, the need to keep HSRI for all of the many benefits we have reaped (i.e. employee choice), and for its potential as a driver of cost-containment. These supporters include:

  • HealthRIght
  • Dr. Hittner, the Health Insurance Commissioner of OHIC
  • The Lieutenant Governor
  • Small Businesses
  • Rhode Island Kids Count
  • Economic Progress Institute
  • Rob Cagnetta (owns Heritage Homes and sits on the HIAC)
  • Small business owners
  • Rhode Island Parent Information Network (RIPIN)

The gist of the message to keep HSRI is that it fits into the larger picture of reform. It is a tool for negotiating with insurers, aggregating purchasing dollars, promoting price transparency, streamlining eligibility determinations for Medicaid and other state health aid systems. Other points given during testimony: 

  • RIPIN’s community-base testified that the exchange is working, and while we *do* need a sustainability plan, we need time to make this tool work for us.
  • Elizabeth Burke Bryant (RI Kids Count) and Linda Katz (Economic Progress Institute) agree that HSRI needs to stay in RI and that we need to build it as a cost-containment tool on behalf of consumers.
  • The Lieutenant Governor stated that we need to keep the exchange here in order to maintain control of decisions made within it, provide RI-focused customer service, and to make it a lever for controlling costs and driving reform in RI. Most of the testimony in support of HSRI was along those lines. 
  • Several gave their critical perspective as business owners, saying that HSRI is working
  • HSRI Director Christine Ferguson also emphasized that this opportunity to be a voice for consumers is unprecedented: until now, reform has been in the hands of insurers, hospitals, and--to a limited degree-government agencies.

Perhaps the latest turn of events is that the federal government is NO LONGER requiring Rhode Island to commit $4.5M in state funds to fill out the HSRI budget for FY 2015. Ferguson does not know how much federal support we will receive in FY 2016-2017, but the federal government wants to work with RI because of our successful exchange.

Ferguson said HSRI exploring many options for sustainability, including selling technical expertise to other states and possibly the federal exchange, seeking payment for back-office services to other state's exchanges, and potentially engaging in regional exchanges. To answer the concerns that the exchange would take funds away from other state priorities, she emphasized that HSRI could NOT levy an assessment NOR use general funds to support the exchange without express legislation from the RI General Assembly.

The House fiscal staff presented a PowerPoint summary of the history of HSRI and the relative comparison of keeping the health benefits exchange here versus giving it to the feds. This well-presented information was the first time many committee members have heard it. It is critical that our lawmakers are thoroughly informed of the actual costs and benefits of the exchange and can make decisions that are in the best interest of Rhode Islanders.

HSRI opponents were Mike Stenhouse (Center for Prosperity and Freedom) and Josh Archambault (from a national conservative think tank) and Al Charbonneau of RI Business Group on health, and a broker.

Moving Forward

Focusing on cost alone rather than on value takes us off in the wrong direction. Reducing health spending while preserving or improving quality and access is where the hard work comes in. We’ll begin to build a framework for doing just that in a future blog. Now with reform underway, what are the mechanisms we can use to bring the US back to a more moderate ratio of GDP:Healthcare spending?

We can’t wait to see what’s next.


[1] Centers for Medicare & Medicaid Services. (2011). State Health Expenditure Accounts by State of Residence. Retrieved June 2, 2014 from http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/res-tables.pdf

[2] Ibid

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