Advocates want to create a 'health affordability fund' in RI. Here's how it would work.

PROVIDENCE − While the skyrocketing cost of housing is making headlines and generating scores of proposed solutions − and big-dollar commitments − the rising cost of health care for many in Rhode Island has quietly slipped into the background.

On Tuesday, a coalition that includes 18 advocacy groups, from the Rhode Island Medical Society to the SEIU State Council and the American Cancer Society Action Network, put health insurance costs back at the forefront, along with housing, food and other basics of living in Rhode Island in 2024.

What is the coalition championing?

The "Protect Our Healthcare Coalition" is hoping to draw attention to three recently introduced bills, including one that would levy a new 2% assessment on health insurance premiums to raise a projected $20 million in new state revenue to create an "affordability fund."

The other two include:

• Legislation to lock in the patient protections of the Federal Affordable Care Act in state statute, specifically the ACA’s prohibition against annual and lifetime limits. The argument? "Given the ongoing situation in Congress and the vulnerability of the ACA, we must codify this important protection," said Nina Harrison, policy director at the Economic Progress Institute.

• Legislation to raise the income threshold from $20,331 to $28,012 for those aged 65 and up − or disabled − to qualify for a Medicare Savings Program.

While the intent is to use any available federal dollars, the legislation would require the state to make payments for Medicare Part B premiums, any Medicare Part A premium and cost-sharing, which includes co-insurance and deductibles, for any individual who is qualified.

A new health care affordability fund

The most detailed of the three proposals is contained within an 11-page "Individual Market Affordability Act" that aims to reduce out-of-pocket costs for low- and moderate-income Rhode Islanders enrolled in the Rhode Island health benefits exchange.

Modeled after similar programs in Colorado, Massachusetts and Washington, the proposal hinges on the legislature levying a new 2% assessment on health care premiums for all commercial health insurance plans regulated by the state and putting the money into a new affordability fund, Shamus Durac, the chair of the coalition, said.

"While the 2% assessment paid by insurers could be passed on to consumers, these insurers are already passing the rising costs of health care on to their consumers," Durac said. "This increase is felt across the board, but is borne the hardest by Rhode Islanders who make too much to qualify for Medicaid but who don’t make enough to afford their health care expenses."

The proposed new eligibility guidelines are complicated, but the broad aim is to provide subsidies to individuals and/or payments to health insurance carriers to reduce the "cost sharing'' that health insurance subscribers, enrolled in coverage through the exchange, are required to pay.

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Skyrocketing health care costs in Rhode Island

The problem the advocates hope to address:

Between 2020 and 2022, HealthSourceRI documented a 21% increase in out-of-pocket costs in their 2022 Health Insurance Survey, "the highest reported out-of-pocket spending since the survey began in 2012," according to the sponsors of the matching House and Senate bills: Sen. Joshua Miller and Rep. June Speakman.

For those surveyed: "After a drop in medical spending between 2018 and 2020, out-of-pocket costs rose by over $400 in 2022, for a total average out-of-pocket cost of $2,569. This is the highest reported out-of-pocket spending since the survey began in 2012."

The report also found that the highest increase in costs was items like doctors, hospitals, tests, first aid materials and over-the-counter medications.

"The number one issue we hear from the community is the unaffordability of health care. Rising monthly health insurance premiums and high out-of-pocket costs are a barrier for many Rhode Islanders in getting the care and treatment they need,” said Durac.

Rhode Island has different health care realities

The Rhode Island population falls into distinctly different health care groups.

Between 2012 and 2022, the number of uninsured Rhode Islanders dropped dramatically, to 2.9%. But the number enrolled in private insurance also dropped from 574,863 to 510,856, while the number enrolled in state and federally-subsidized Medicaid exploded.

Approximately 350,000 Rhode Islanders are currently covered under Medicaid, which has no out-of-pocket costs (i.e., no premiums, deductibles, or cost-sharing). "And so, the impact of rising out-of-pocket costs does not affect Medicaid members," said Durac in an email exchange before Tuesday's press conference.

Others who are 65 and over, or disabled and on Social Security disability income are primarily covered under Medicare, which carries monthly premiums and cost-sharing. These costs can vary depending on the coverage an individual chooses – i.e. Medicare Advantage, traditional Medicare (Parts A, B, C, D etc.).

"The Medicare Savings Program bill targets those who are on Medicare but are not eligible for Medicaid," said Durac. "This is the population that the bill to expand the Medicare Savings Program can help."

This article originally appeared on The Providence Journal: Rhode Island health care coalition wants to bring down health costs