Published in the Providence Journal

Emily Harding: A better reform for R.I. health insurance

01:00 AM EDT on Wednesday, April 13, 2005


WITH ALL DUE respect to Joshua Miller and George Schietinger, who wrote a March 27 Journal Commentary column called "A plan to reform health coverage," if they think things are bad now, they should consider that having a pure community health-insurance rating in Rhode Island would make things far worse.

Other options are less invasive, more effective, and time-tested treatments, proven to work in the majority of other states where health-insurance is abundant and affordable for both small businesses and individuals.

We all agree that Rhode Island's health-care situation is bad now, but it would be made worse under community rating. All states with community rating have the highest cost of insurance and the highest rates of uninsured.

Under community rating, the young and healthy non-users of medical care pay the same rate as the severely ill users.

No one benefits. Insurance costs just rise and rise, to a point where most can't afford any coverage.

When Vermont adopted community-rating legislation, some Vermonters saw rate increases as high as 170 percent! In New York, another state with community rating, a small three-person consulting firm in New York City pays $1,200 a couple for three middle-aged couples. The plans have a $1,500 deductible per person, plus a charge of $2,500 out of pocket per person!

But the aforementioned column was right about one thing: Some 85 percent of small businesses in Rhode Island can't wait any longer for reform. Thanks to bills introduced by Sen. Marc Cote and others, they won't have to.

In fact, this year Rhode Island legislators have a unique opportunity to cure Rhode Island's health-care crisis -- or make it even worse, if the community-rating bill, S-0563, passes. A National Association of Health Underwriters (NAHU) study shows that 43 other states have rates between $200 and $300 a month for a 35-year-old female and two children. In Rhode Island, a "low-cost" plan costs $424 to nearly $600 a month for the same single-parent family.

Kentucky and New Hampshire had carriers leave their states because of onerous regulations like the ones we have. They, like us, experienced extremely high health-care costs as a result. They also proved that it was possible to pull themselves out of their crisis with proper reforms.

This year is Rhode Island's best chance to do the same -- now that legislation to get carriers to return to the state has been introduced, by Senator Cote. He worked with national carriers and national health-care-policy experts with experience helping states out of crises.

S-0419 and H-5760, the companion bill, sponsored by Rep. Elizabeth Dennigan, would establish an individual medical-high-risk pool, which 33 other states have. Through this bill, high-quality health insurance at reasonable rates would be available to anyone rejected by carriers in the individual market because of health reasons.

The risk pool, funded by carrier assessments and federal funds, would stabilize the individual market and let healthier individuals, families and the self-employed obtain high-quality affordable coverage from a variety of carriers in the private market.

Our state now makes non-health-maintenance organizations responsible for doctors' quality-of-care issues and malpractice, even though the patient is free to choose his own doctor and the carrier has no involvement in the patient-provider relationship.

S-0424 would exempt carriers with these types of plans from the current managed-care regulations.

S-0428 would improve Rhode Island's desirability to both group and individual carriers. It would change the current onerous and expensive "file-and-approve" form and rate-filing requirements to a "file-and-use" system. This system, used in most states, lets carriers simply file their rates, and as long as they fall within certain parameters, carriers are then able to use them.

Rhode Island regulators would still review them, and would of course pursue the rogue carriers not following the rules. This bill would change the regulatory atmosphere from unfriendly, guilty-until-proven-innocent to a friendlier, more reasonable, innocent-until-proven-guilty environment.

Other bills that would help are H-5228, introduced by Rep. Eileen Naughton, and S-0423, the companion, sponsored by Senator Cote. This legislation would finally allow qualified high-deductible health plans used with Health Savings Accounts (HSAs) in Rhode Island -- the only state that does not have them.

S-0078, sponsored by Sen. Leo Blais, would require that proposed mandates be analyzed and reviewed for efficacy and cost-effectiveness before they are enacted. Other states with mandate-review laws have found their mandate-review boards very effective.

These measures, being heard today by the Senate Health and Human Services Committee, could dramatically improve our market. They would entice carriers back to Rhode Island, and create a healthy and competitive insurance market, with dramatically reduced health-insurance costs.

Providers would also benefit from significantly higher reimbursements paid by lesser-known national carriers after they returned to the state.

You can easily contact your legislators through, the Web site of the Rhode Island Association of Health Underwriters.

Emily Harding is legislative chairwoman of the Rhode Island Association of Health Underwriters.