R.I. Adopts Multi-Pronged Health Care Affordability Program

July 7, 2006

The Rhode Island General Assembly recently passed the Health Care Affordability Act, a set of 14 bills intended to lower health insurance costs for small businesses, strengthen state control over provider expansion, enhance consumer access to health care information and encourage healthier habits among residents. Governor Donald Carcieri has signed the measures into law.

Under the legislation, the state’s health insurance commissioner is empowered to develop an alternative, low-cost health insurance plan for small businesses and the self-employed.

The new law also permits part-time students to remain on their parents’ health insurance until age 25 and establishes two panels, one to study Massachusetts’ new universal health care program and another to look into starting an insurance program for people with chronic or severe health problems.

“This legislation is a way to provide help for families and small business owners struggling to afford insurance now, and to begin working on finding innovative long-term solutions so that insurance costs can be brought under control,” Sen. Elizabeth Roberts, co-chair of the committee that developed the bills, said in a statement.

Carcieri said the 14 bills taken together would significantly reform Rhode Island’s health care system.

At the bill signing, Carcieri was joined by Health Insurance Commissioner Christopher Koller and by members of the General Assembly at a ceremony at Atlantic Paper and Twine in Pawtucket. Atlantic Paper and Twine is one of the hundreds of small businesses that supporters say could be assisted in providing health insurance for their employees by the legislation.

Among other things, the bills are expected to help reduce the cost of health care and expand health care access for small business employees by lowering premiums by up to 25 percent; promote healthy living and reduce health care costs by reducing the availability of junk food in schools and by promoting tobacco cessation; ensure that Rhode Island has the right balance of health care providers – including primary care providers – by giving the state greater input into the expansion of health care facilities; and providing health care consumers with more information about the cost of the individual health care services they are purchasing.

“We all know that small business has been hard hit by the dramatic increase in health insurance premiums,” Carcieri said. “Everywhere I go across the state, small business owners — like Lisa and David Spencer here at Atlantic Paper and Twine — are concerned by the growing costs of providing health care to their employees.”

“The employees of many small businesses across Rhode Island are equally worried about the growing share of the premiums they are being asked to pay,” Carcieri continued. “As a result, lowering health care costs for small businesses and their employees has been one of my top priorities.”

Highlights of the Health Care Affordability Act include:

New Affordable Health Insurance Product (S2848 & H6999) – This bill empowers the state Health Insurance Commissioner to work with the insurance providers to develop a new, more affordable insurance product for small businesses. The plan is expected to reduce premium costs for participating small businesses by up to 25 percent.

Assisting Low Income Small Business (S2107 & H6905) – Carcieri proposed to create a reinsurance pool to help reduce health care premium costs for small businesses by an additional ten percent. The General Assembly ultimately did not approve a funding mechanism this session, although this bill establishes the concept in law.

Making Health Care Costs and Quality More Transparent (S3170 & H8243) – This bill expands health care quality reporting beyond hospitals and nursing homes to include health care providers and requires a report by the Office of the Health Insurance Commissioner to the legislature describing a path to patient access to cost data by March 15, 2007.

Development of High Risk Insurance Pool (H7926 & S2264) – Would authorize the Health Insurance Commissioner to pursue federal funding to develop a high risk insurance pool for individual health insurance subscribers.

Healthy Snacks in Schools (H6968 & S2696) — Restricts the sale of sweetened beverages in schools while promoting healthy choices. The law mandates that only healthy beverages and healthy snacks may be sold in elementary, middle, and junior high schools. Healthy beverages and snacks are identified as low-fat milk, 100 percent fruit juice or juice-based drinks, vegetable drinks, low-fat yogurt, and nuts, seeds, reduce-fat cheese, and whole-wheat and whole-grain snacks.

Tobacco Cessation (H7467 & S2706) — This bill expands coverage of smoking cessation programs and medications to the commercially insured, building on existing reforms.

Certificate of Need Reform (H8055 & S2741) – Health care facilities must apply to the Rhode Island Department of Health (DOH) for a “Certificate of Need” in order to carry out capital expansions. This legislation will enable DOH to evaluate proposed expansions based on the state’s existing health care needs, such as primary and preventive care. Specifically, the new law requires health care facilities and providers to issue annual short- and long-term plans, including capital financing needs, to the Health Services Council prior to developing new services or equipment.

Anywhere, Anytime Health Info: Health Care IT— The General Assembly approved as part of the state budget a $20 million revenue bond to fund a Health Information Exchange to allow providers with Electronic Health Records to share their information safely and securely.

Source: R.I. Governor’s Office

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