PROVIDENCE, RI – A Rhode Island Public Expenditure Council policy brief released today finds that elements of the administration’s plan to bolster the state’s flagging RIte Share program may require greater consideration. Through the RIte Share program, the state covers out-of-pocket expenses on employer-sponsored health insurance for Medicaid-eligible employees and their families. The policy brief breaks down the proposal unveiled in the governor’s fiscal year (FY) 2021 budget to establish reporting and information sharing requirements for qualifying businesses, places the proposal in historic and national context, and considers its potentially problematic elements.
“As Medicaid is the largest and fastest growing state expenditure, declining enrollment in RIte Share gives cause for concern,” said RIPEC President and CEO Michael DiBiase. “However, key questions remain as to whether the administration’s proposal, which places new burdens on employers, will be effective in fixing the RIte Share program.”
RIPEC found that enrollment in RIte Share has declined over the last decade, while both Medicaid enrollment and the cost of administering Medicaid have increased dramatically. RIte Share began operation in 2001 as part of an effort to stabilize the market and reduce healthcare cost growth. However, while the state share of Medicaid expenditures for covered services grew from $661.0 million in FY 2009 to $1.0 billion in FY 2018, enrollment in RIte Share decreased by 52.6 percent over the same period. The percentage of the state’s Medicaid eligible population enrolled in RIte Share dropped from 6.7 percent to 1.8 percent over that time frame. These trends suggest that the current program is not effective in enrolling RIte Share eligible individuals and families and that Rhode Island has missed out on potential savings that could be achieved if RIte Share was more effectively administered.
RIPEC raises concerns of whether the administration’s RIte Share proposal effectively addresses that issue. Several questions remain, including specifics as to the impact on businesses. The proposal would place administrative burden on qualifying employers by requiring annual, quarterly, and perhaps monthly reporting. Employers would additionally be required to include Health and Human Services materials in their healthcare enrollment information packages and participate in outreach campaigns. Qualifying employers that did not fulfill annual reporting requirements could face penalties ranging from $2,500 to $5,000. The administration’s proposal would also lead to additional healthcare costs for some businesses.
Ultimately, the administration projects that it would achieve annualized general fund savings of $10.1 million through its RIte Share initiative, while federal fund savings would amount to $26.7 million, a sum of $36.8 million that would predominately result from a cost shift from state and federal government to employers.
Importantly, these additional costs would be borne only by qualifying businesses, defined in the proposal as for-profit employers with 50 or more employees. While it would appear most sensible to match the minimum employer size threshold to the analogous minimum applicable for the Affordable Care Act (ACA) employer mandate, the threshold for the ACA employer mandate is 50 or more non-seasonal full-time equivalent (FTE) employees. In its current form, the administration’s proposal would therefore result in some businesses that do not meet the size threshold under the ACA to nonetheless fall under the compliance requirements under RIte Share.
Finally, RIPEC’s policy brief questions whether the administration’s proposal sets forth an adequate plan for successful program administration. To support proposal implementation, the governor’s FY 2021 budget recommends additional operating expenditures of $500,000 to implement systems changes to RI Bridges, Rhode Island’s public-benefits computer system, and $100,000 to support one new business analyst FTE. Three FTEs were charged with administering a RIte Share program covering fewer than 3,400 individuals as of December 2019, and the administration projects a caseload of 14,600 after the proposal is implemented. It remains to be seen whether the addition of one FTE, as well as the systems upgrades requested under this budget article, will enable the administration to effectively manage the caseload it anticipates.