RI Health Benefits Exchange Progress

PROVIDENCE – On Wednesday, January 9, the Rhode Island Public Expenditure Council (RIPEC) will release “Rhode Island’s Health Benefit Exchange: Progress and Challenges.”  The report describes Rhode Island’s Health Benefits Exchange (HBE) and recommendations for implementation.  The HBE is central to the Affordable Care Act’s (ACA) goal of expanding insurance coverage by providing a market for affordable health care plans.  How Rhode Island implements its exchange will go a long way towards determining how affordable and accessible health insurance will be under the ACA for Rhode Islanders.  The full report is available here.

Rhode Island has made significant progress in the development of the exchange.  In December, the federal government granted Rhode Island conditional approval for the state’s exchange blueprint. Federal grants for exchange development totaling $64.8 million are the thirteenth highest nationally, and second highest per capita.  

The exchange has the potential to reduce the state’s uninsured population by providing access to transparent and affordable health insurance plans. However, the long-term sustainability of the HBE depends on a number of factors, including how many individuals access insurance through the exchange. The exchange population must be sufficiently large to fund operations and leverage economies of scale to offer affordable plans. Eligibility decisions made by Medicaid will impact the demographics and size of the population purchasing within the exchange.  In order to ensure the viability of both, the state must consider the number and type of individuals who will fall under the purview of each program.

Additionally, the design of the exchange will inform how successful it will be in attracting consumers.  Specifically, the system needs to be designed to be easily navigable for individuals with low levels of health and computer literacy.  Exchange construction should focus on a user-friendly interface that educates consumers while emphasizing access and transparency.  Consumers should be able to manage both the process and the choices available to them to encourage participation.

A final issue for the state to consider is how to ensure the exchange is self-sufficient, as mandated by the Governor’s executive order and federal law.  If the HBE is supported by premium assessments or user fees, the revenue generated will be dependent upon the number of purchasers.  Uncertainty about the number and type of consumers participating in the exchange make prudent budgeting imperative, especially in the first years of operation.

“Success of the exchange requires a thoughtful approach to expanding access to health coverage without making unnecessary demands on the budget,” notes RIPEC Executive Director John Simmons.  “Rhode Island has the opportunity to be a national leader in this area by taking prudent action with regard to exchange development and implementation.”

The exchange will not only facilitate expanded access to health insurance coverage, but it has the potential to generate additional positive returns to the state such as expansion of the health care industry and additional federal funds flowing through the state.  Reducing the number of uninsured Rhode Islanders through an accessible and user-friendly exchange interface may also improve health outcomes, decrease spillover costs associated with uncompensated care, and improve workforce productivity.  In order to ensure the HBE reaches its goals, high levels of accountability, with clear delineation of responsibility, and adequate oversight are imperative.  

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