R.I. bill seeks to safeguard elements of Obamacare

June 14--PROVIDENCE -- Legislation headed for a Senate floor vote on Wednesday would enshrine in state law many of the same benefits and protections for health insurance mandated by the Affordable Care Act.

The bill (S-831 Sub A) introduced by Sen. Joshua Miller, D-Cranston, is designed to protect Rhode Island consumers from changes at the federal level should Congress repeal or weaken the federal law, known as Obamacare.

Rhode Island is one of at least five states -- including New Hampshire, Hawaii, New Jersey and Texas -- that have pending measures which aim to incorporate the federal essential benefits protections into state law, said Richard Cauchi of the National Conference of State Legislatures.

The 72-page Senate bill, called The Health Insurance Market Stability and Consumer Protection Act, would require Rhode Island insurers that sell individual and small-group plans to cover Obamacare's "10 essential benefits," such as preventive, mental health and maternity services as well as contraceptives.

Miller's bill also would prohibit any state-based insurer, including those that cover large employers, from imposing annual lifetime limits and lifetime dollar coverage caps on those benefits, aimed at ensuring access for seriously ill people. And it would guarantee coverage for dependents on their parents' plan up to age 26.

Rhode Island law currently bans exclusions for preexisting conditions, as does the bill.

The state protections would apply to about 95,000 Rhode Islanders who purchase major medical plans directly or through small employers (defined as 50 or fewer employees) from state-based insurers who are covered under Obamacare. The state protections would not apply to about 80,000 Rhode Islanders who work for large employers (defined as 51 or more employees), with the exception of the ban on lifetime coverage caps.

More than two-dozen people registered their support for the bill at a hearing before the Senate Health & Human Services Committee in May, including representatives from the Rhode Island Department of Health, the Executive Office of Health & Human Services, HealthSource RI, the Hospital Association of Rhode Island, The Mental Health Association of R.I.

But others raised concerns about what the bill would mean without the funding to support it.

The bill contains no mandate that consumers buy insurance -- a key provision of Obamacare aimed at keeping younger, healthier people from dropping coverage and driving up costs.

Nor does it include subsidies -- as in the federal law -- to make the plans more affordable.

"One of the most important" aspects of Obamacare is the premium tax credits offered to consumers who buy coverage on the state exchanges, said Dania Palanker, assistant research professor at the Center on Health Insurance Reforms at Georgetown's Health Policy Institute in Washington. "If that's not there, then unfortunately many more people cannot afford to buy coverage."

That worries insurers.

"The concern is that embedding all of these protections into Rhode Island law without funding to support and to address affordability, we will have people going without insurance," Monica Neronha, vice president of legal services at Blue Cross & Blue Shield of Rhode Island, testified at a Senate committee hearing on the bill in May.

"Right now, affordability is being largely determined by the [federal] subsidies," Al Charbonneau, executive director of The Rhode Island Business Group on Health, said in an interview. "One of the things we need to focus on in the state is affordability. And that really involves engaging providers about their cost."

Charbonneau said his group opposes the bill because it involves making "commitments ... that are not supported with funds on the federal level."

The Rhode Island Public Expenditure Council also opposes the bill. The council's executive director, John Simmons, has expressed concerns about its potential costs to businesses, insurers, health providers and consumers.

If the federal government removes the coverage mandate, the state exchange, known as HealthSource RI, could still survive, "but at a high cost," said Robert B. Hackey, professor and director of the Health Policy and Management Program at Providence College. "Unless the marketplace can enroll more customers, it will spread its administrative costs among a shrinking pool of covered lives." That would mean higher costs for everyone.

The bill attempts to address affordability by banning caps on essential benefits coverage to reduce patients' out-of-pocket costs, and requiring insurers to maintain a 3-to-1 ratio for premium rates based on age. A 64-year-old, for example, could not be charged more than three times the premium rate as a 21-year-old.

But plans with better coverage cost more. And if federal subsidies shrink, it will fall to state lawmakers to decide what taxpayers would have to chip in to make those plans more affordable.

To that end, the bill creates a "working group on affordable health insurance" to make recommendations on how to use state and federal money and federal waivers to stabilize premiums and out-of-pocket costs.

"Each year the devil will be: do we have to create a subsidy to create access to that product?" Miller said. "It is a problem. People have to decide whether they want to pay for that."

Obamacare protections

-The bill aims to protect the 95,000 residents who are covered by individual or small-group plans.

-Individual/direct pay plans cover 46,791 Rhode Islanders, or 13 percent of the total privately insured.

-Small-employer group plans cover 48,178 Rhode Islanders, or 13 percent of the total privately insured.

-The bill's provision banning lifetime coverage limits would also impact the 80,293 Rhode Islanders (22 percent) covered by large-employer group plans.

-The bill's protections would not cover the 196,556 Rhode Islanders (53 percent) who are self-insured.

Source: R.I. Office of the Insurance Commissioners

updated 1:55 p.m.

correction: an earlier version of this story said that Tufts Health Plan supported the bill. Tufts remains neutral, a spokeswoman said.

-- [email protected]

(401) 277-7335

On Twitter: @LynnArditi

Obamacare protections

R.I. bill aims to protect 95,000 residents covered by individual or small-group plans

Plan type

Rhode Islanders

Percent of Total Privately Insured

Direct Pay/Individual

46,791

13%

Small Employer Group

48,178

13%

Large Employer Group*

80,293

22%

Self-Insured Group

196,556

53%

Total Privately Insured

371,818

100%

* proposed ban on lifetime coverage limits would apply to large employer groups

___

(c)2017 The Providence Journal (Providence, R.I.)

Visit The Providence Journal (Providence, R.I.) at www.projo.com

Distributed by Tribune Content Agency, LLC.