OSPRI urges go-slow approach to health insurance benefits exchange

PROVIDENCE – In an effort to slow down the legislative effort to create a health insurance benefits exchange in Rhode Island, the Ocean State Policy Research Institute issued a position paper on April 8 urging a go-slow approach.

“There should absolutely be no rush in building an exchange in Rhode Island when federal law does not require it until 2014," said Mike Stenhouse, OSPRI’s executive director. “Let’s have a full debate and analysis before the Rhode Island House rubber stamps it.”

The health exchange legislation was first submitted on Jan. 27 by R.I. Senate President M. Teresa Paiva Weed. An amended version was approved on March 30 by the Senate Health and Human Services Committee and that version passed the R.I. Senate on April 5.

A bill submitted by Rep. Brian Patrick Kennedy, D-Hopkinton, chair of the House Corporations Committee, which is identical to Paiva Weed’s initial bill, is scheduled to be heard by the House Health Education and Welfare Committee on April 13, according to Larry Berman, House communications director.

In contrast to OSPRI’s position, R.I. Health Insurance Commissioner Christopher F. Koller recently urged speedy passage of the legislation, saying that “tens of millions of dollars” were at stake in federal funds to support the establishment of such a health insurance exchange in Rhode Island.

To comply with the federal funding deadlines, Koller said the R.I. General Assembly will need to enact the legislation this session to create the new quasi-public organization, enabling a new board to be chosen and in place. The new health insurance exchange, Koller continued, has the promise of creating a more affordable health insurance marketplace.

The OSPRI report suggests that interstate compacts, such as one recently enacted by the state of Wyoming, may provide a more attractive free enterprise model.

Wyoming was chosen because it has roughly the same number residents as Rhode Island, in terms of creating similar risk pools for insurance, Stenhouse said.

No analysis regarding the differences in the health care delivery systems between the two states was done, according to Stenhouse.

When asked how the proposed “free market” of an interstate compact would address 140,000 residents in Rhode Island who currently do not have health insurance, Stenhouse said he did not have specific answers.

“With the free market alternative like Wyoming, there is no data yet, it’s a concept,” he said. “Our main argument is that given the uncertainty of the federal law, constitutionally and financially, why would we want to build a structure that might be thrown out.”

When asked about the OSPRI report, Lt. Gov. Elizabeth Roberts, who chairs the R.I. Healthcare Reform Commission, said: “A health insurance compact is in no way a substitute for a health insurance exchange.”

According to Roberts, the exchange will create “a new marketplace through which consumers can easily and conveniently shop for and make ‘apples to apples’ comparisons of lower cost health insurance coverage.”

Compacts, she continued, permit insurers to make offerings across state lines, and they are not mutually exclusive from health insurance exchanges. Roberts envisioned that there might be such a compact created to standardize the regulatory environment with Massachusetts and Connecticut.

However, she said, putting in place a multi-state compact will not bring the benefits to our state that will be realized by building a R.I. health insurance exchange. “Most of the costs of establishing [the state’s] health insurance exchange will be borne by the federal government, with minimal investment of state funds.”

For the full report, click here.