R.I. Prepares to Open Health-Insurance Store

By FRANK CARINI/ecoRI News staff

WARWICK, R.I. — The state of Rhode Island is opening a new store that will specialize in a vital product many lack: health insurance. This virtual storefront, a federal requirement, will cater to individuals and small-business owners, and will help shoppers make informed decisions for what is arguably life’s most complex purchase.

“We need to make it a place that people understand and find valuable. It’s the biggest purchase you make that you don’t understand until you are very sick,” Lt. Gov. Elizabeth Roberts said Wednesday evening during a Rhode Island Foundation-sponsored forum that focused on what these new health-insurance exchanges mean.

The Oct. 19 panel discussion at the Crowne Plaza also featured state Health Insurance Commissioner Chris Koller, Blue Cross & Blue Shield of Rhode Island President Peter Andruszkiewicz and Glen Shor, executive director of the Massachusetts Health Insurance Connector. They were all provided with at least one plastic bottle of water.

State health-insurance exchanges are the centerpieces of last year’s controversial federal health-care law. Under the Patient Protection and Affordable Care Act of 2010, each state is required to create such a program, which will allow insurance buyers to select from a variety of plans — all of which will be administered by private insurance companies.

The exchanges also will provide subsidies to those who might need financial assistance in order to buy health insurance. For example, a family of four with a household income of $89,000 or less a year or an individual making $43,000 or less annually will receive a stipend from the federal government to help defray some of the cost.

Three years before this piece of federal legislation became law, Massachusetts had already opened such an online store. The Massachusetts exchange initially offered customers 30 plans, but that proved too confusing and frustrating to customers, according to Shor.

The Massachusetts exchange was quickly streamlined and now features six plans for adults and four plans for young adults. It has an enrollment of 215,000 Bay State residents, Shor said.

Rhode Island’s health-insurance exchange needs to be open by 2014 at the latest, according to the federal health-care law. Gov. Lincoln Chafee has appointed a 200-plus-member Rhode Island Healthcare Reform Commission, which Roberts and Koller co-chair, that is responsible for setting up this online store and stocking its virtual shelves.

The Rhode Island exchange will need to be affordable and understandable, feature health plans people and small businesses need, have a mechanism to advise customers and, most importantly, make it easy for shoppers to compare the different options, according to the four panelists.

Koller, who, in 2005, became the state’s first health commissioner, said the exchange will act as a bridge between private insurers and Medicaid.

Andruszkiewicz, who has been in the health-insurance business for 30 years, said the creation of exchange is a good thing, provided it’s not just about low-cost plans that don’t offer a variety of options.

“The system is so complex now it’s hard for many people to understand it,” he said. “The exchange should simplify the process of buying insurance.”

All of the panelists agreed that health-insurance exchanges alone won’t solve the problem of rising health-care costs, but these online stores will make people more empowered, confident and educated when it comes to buying health insurance, they said.

The power of competition and public transparency can help make health insurance more affordable over time, Shor said. Massachusetts still has some of the highest health-care costs in the country, but since the exchange went online, those costs have started to come down, according to Shor.

Koller also said if the exchange helps more people obtain health insurance, that will relieve some of the financial burden on those already paying into the system — as healthy insurance buyers fund the 5 percent of people who use 50 percent of the country’s health-care costs.

Recent estimates put Rhode Island’s uninsured population at 140,000, nearly 16 percent of the state’s younger-than-65 population.