RIPEC report lays out options for HealthSource RI’s financial future

PROVIDENCE – Rhode Island policymakers have several options for the future of HealthSource RI, but first the health insurance exchange’s end goals, costs and long-term funding plan should be reviewed, according to a report from the Rhode Island Public Expenditure Council released Monday.
“The primary question that must be answered by policymakers is, moving forward, what should Rhode Island’s overarching, strategic policy be towards health reform and what role should [HealthSource RI] play in implementing that strategic policy direction?” the report said. “Since HealthSource Rhode Island will eventually require non-federal funding to sustain its operations, HSRI’s intended functions and exchange design options should be reviewed and agreed upon by the Governor and the General Assembly.”
Since launching in October 2013, HealthSource Rhode Island has not yet submitted a proposal for how to self-sustain, as required by the federal Patient Protection and Affordable Care Act. While the ACA’s Jan. 1, 2015, deadline for state exchanges’ self-sustainability is fast approaching, Rhode Island applied to the U.S. Department of Health & Human Services in July 2014 to be allowed to continue spending its federal funds for another year.
A report submitted to the R.I. House Finance Committee in March 2014 puts a yearly post-build operating budget at $23.9 million, and RIPEC’s report calls on Rhode Island’s next governor to prioritize a plan for the exchange’s future by submitting an all-inclusive plan to the General Assembly as part of the fiscal year 2016 budget proposal.
“Unknowns about HSRI’s future, specifically regarding long-term funding, highlight a fundamental shortcoming in Rhode Island’s approach to health care policy,” the report says.
From the exchange’s Oct. 1, 2013, launch through Aug. 2, reported RIPEC, 26,686 people enrolled in individual health insurance plans on HealthSource RI, about 39.3 percent of the total individual market in the state, the exchange estimated.
In the same time frame, 262 employers enrolled in the Small Business Health Options Program, 258 of which have paid for their plans. The vast majority of these, 96.5 percent, employ no more than 25 staff members. A total of 1,821 lives were covered through those plans.

RIPEC’s report outlines sustainability plans from states that already have submitted them, including Massachusetts and Connecticut. Approaches vary, with some states charging a percentage fee on total premiums collected by all insurers, and some charging percentages of premiums only on specific plans.
The report presents the possibility of entering a collaborative regional agreement to provide exchange services. RIPEC also gave examples of the states that established exchanges, but have since transitioned to federal management. Oregon and Nevada both ran into major technical and funding options before transferring operations to FFM.
RIPEC’s 32-page report also publishes HealthSource RI’s recent enrollment demographics and a review of the organization’s history and expressed goals.

In addition, at RIPEC’s 71st annual meeting scheduled form Monday evening, John C. Simmons, RIPEC executive director, is expected to be presented with the Tax Foundation’s annual “Outstanding Achievement in State Tax Reform Award.”

Representatives from the Tax Foundation, based in Washington, D.C., selected Simmons as one of six individuals honored due to “extraordinary efforts to advance the cause of simpler, smarter tax policy in the previous year.”

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“One must not go any further than the Tax Foundation’s analysis of tax policy to find evidence of the need to make Rhode Island more competitive. This award recognizes Rhode Island’s recent tax reform changes which could not have happened without the unwavering leadership of the Rhode Island General Assembly, and the steadfast commitment of Rhode Island’s business community,” Simmons said in a statement. “I am humbled and honored to accept this recognition on their behalf, and I look forward to continuing our work on making Rhode Island even more competitive.

The 2014 list of awardees includes: N.Y. Gov. Andrew Cuomo, Neb. Gov. Dave Heineman, Mich. Gov. Rick Snyder, Ind. Sen. Brandt Hershman and Washington, D.C., Council Chairman Phil Mendelson.

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