Why Rhode Island can’t attract new small businesses to the state
September 17, 2007 on 3:07 pm | In Uncategorized |Elected officials, including Governor Carcieri (with all due respect) in the state of Rhode Island continue to remain in a HUGE state of denial when it comes to their perception of how desirable the state is to prospective businesses when considering states to relocate to. What they continue to ignore is that our state has one of the WORST health insurance markets in the country with among the highest insurance costs and the FEWEST CHOICES of plans of any other state!
Considering health insurance costs are the second highest expenditure an employer has next to payroll, it isn’t surprising other states are more appealing to small businesses! Why is this concept so difficult for our leaders to understand??
80% of states in the rest of the country have vastly more successful health insurance industries which makes many of them tremendously more desirable places to do business in. These states all have certain commonalities when it comes to state health insurance legislation that make their health insurance markets thrive that states in crisis, like ours, MA, NY, NJ, VT, and ME tend to continue to ignore or resist implementing in their state. Instead we in the northeast, think we know BETTER and continue to try to reinvent the wheel while only making things worse.
The sad thing is, the Rhode Island Association of the National Association of Health Underwriters in 2003 and 2004 arranged for national government relations experts from a leading national health insurer, Fortis, to sit down with Governor Carcieri and point out what changes to Rhode Island’s health insurance regulations would be necessary to bring carriers back to the state; increase competition; increase choices and drive costs down. As the ongoing legislative chair and past president of the chapter, I was at that meeting and ensuing meetings and helped coordinate them with Senator Marc Cote who was willing to sponsor the needed legislation.
After hearing detailed explanations and proof of other states that pulled themselves out of health insurance crises, similar to the one Rhode Island is in, due to poor state health insurance regulations, Governor Carcieri should have been willing to publicly support these changes and strongly urge the legislature follow through and pass them rather than taking a back seat and deferring to the then Senator Elizabeth Roberts who slowed everything down.
Despite the less than enthusiastic, rather non-existant public support for proven reforms, Governor Carcieri left the impression with Fortis’ Director of Government Relations, at the initial meeting, that he was appreciative of the advice and efforts and wanted to move forward with the reforms right away. This led to the needed legislation being created and a committment that two national carriers Time Insurance and John Alden Life Insurance Co would return to Rhode Island once the reforms - (establishing a high risk insurance pool in the individual market; fixing the managed care rules under the Health Care Accessibility and Quality Assurance Act that don’t differentiate between a managed care company and a non managed care company and require any health plan in the state of Rhode Island follow rules designed for managed care companies –which is the reason, Rhode Island no longer has any national non-managed care companies doing business in the state– and fix the filing regulations).
Anyone would think a state with a health insurance market in as dire straits as ours is in would be ready to do WHATEVER it took to make things better — even if it meant getting rid of reforms that were supposed to make things better that are actually making things worse— but NO! Even when an opportunity presented itself on a silver platter to double the number of insurers in the state, by passing legislation which were certain to attract even more insurers to our state, there was opposition. Attorney General Lynch was flatly against changing the filing rules which was a deal breaker. Senator Cote, not wanting to face anymore opposition, withdrew the bills which were Rhode Island’s only realistic hope to recover from its health insurance crisis and bring carriers back to the state.
The next mistake Governor Carcieri made was to allow his new health insurance commissioner appointee, Chris Koller to seemingly make all the policy decisions concerning the health insurance industry in the state. When as a regulator, regulating is what he should strictly be doing. Additionally he could be learning a great deal from his colleagues in other states with successful insurance markets. Rather than learning about what is proven in other states with a view to doing the same in Rhode Island, our health insurance commissioner was given the freedom by the Governor to design a new health plan “The Pledge Plan” that both United Healthcare and Rhode Island Blue Cross are required to offer.
Being REQUIRED to offer a plan that, you as an insurance carrier did not create yourself, is just ANOTHER example of Rhode Island leaders making the health insurance industry less desirable in a whole NEW WAY to potential health insurers who might possibly return. No other state does anything like this!
Especially for anyone over the age of 40 this health plan which is supposed to be so competitively priced is actually MORE expensive than plans that already existed with both carriers!
I wonder how much of Rhode Island tax payers money was wasted coming up with this new “reform” which I’m sorry to say, just like all the other “health care reforms” Rhode Island has come up with on its own is not a panacea.
When will Rhode Island leaders admit that they have a TERRIBLE track record when it comes to health insurance reform (and so does Massachusetts by the way)? If Rhode Island leaders were smart they’d LISTEN, LEARN and DO what those states that actually have MANY insurers doing business in their states offering both individuals AND small businesses a plethora of truly affordable health plans.
It is easy to find out what states these are. All one needs to do is go to a national health insurance quoting site and inquire about rate and availablility of plans in different states… or contact an independent insurance agent in Rhode Island who can generate quotes in different states from national carriers.
Until Rhode Island leaders have the sense to do what has already proved to work in most of the rest of the country instead of CONTINUALLY trying to be different AT THE EXPENSE OF RHODE ISLAND INDIVIDUALS AND SMALL BUSINESSES, we can realistically only expect the health insurance situation for the aforementioned to get worse.