PROVIDENCE, R.I. (WPRI) - Nearly 83,000 Rhode Islanders will be eligible starting next year to get federal tax credits to buy health coverage in the new insurance marketplace being created under President Obama's health care law, a recent study shows.
Families USA, an advocacy group that supports the Affordable Care Act, used data from the Lewin Group consulting firm to estimate that 82,810 of Rhode Island's 1 million residents will be eligible for the new federal insurance subsidies, a central pillar of the law.
The vast majority of those eligible for subsidies are working families and Rhode Islanders ages 34 and under, the study found. Based on federal income guidelines for 2013, the law will subsidize individuals who make up to about $46,000 and families of four who make up to around $94,000.
"The tax-credit subsidies are a game-changer: They will make health coverage affordable for huge numbers of uninsured families who would have been priced out of the health coverage and care they need," Ron Pollack, Families USA's executive director, said in a statement.
The cornerstone of the Affordable Care Act is its new state-level health insurance exchanges, which are supposed to be Expedia-like online marketplaces where Americans can compare plans, purchase insurance and - if they earn less than 400% of the federal poverty level - receive billions in subsidies on a sliding scale.
Gov. Lincoln Chafee signed an executive order in 2011 creating the Rhode Island Health Benefits Exchange and named Christine Ferguson, a former aide to Mass. Gov. Mitt Romney and U.S. Sen. John Chafee, to lead it. The state has received $64.8 million?to get the exchange up and running, and enrollment is scheduled to kick off Oct. 1 for coverage in 2014.
The exchange will be open to uninsured Rhode Islanders, as well as those who'd have to spend more than 9.5% of their wages to buy health insurance at work or wouldn't receive adequate coverage through their employer.
The Kaiser Family Foundation estimates 14% of Rhode Islanders under the age of 65 were uninsured in 2010-11, while 60% were covered by their employers, 21% were on Medicaid or another public plan, and 5% purchased individual coverage.
One huge unanswered question is how much Rhode Island's insurers will charge for the 28 plans they expect to sell on the new insurance exchange, which are heavily regulated to enforce minimum benefits.
Blue Cross & Blue Shield of Rhode Island and Neighborhood Health Plan of Rhode Island will sell plans to individuals on the exchange, with UnitedHealthcare joining them in selling to small employers. Tufts Health Plan expects to begin selling plans on Rhode Island's exchange in 2015, as well.
"The insurance companies? willingness to participate in this new endeavor will provide the exchange with the leverage it needs to meet its goals of increasing the number of insured Rhode Islanders, improving the health of Rhode Islanders, and driving health care system reform," Ferguson, the exchange's director, told WPRI.com in a statement.
The insurers have filed proposed rates with R.I. Health Insurance Commissioner Christopher Koller, with Blue Cross floating a $5,900 deductible for one plan. Koller told WPRI.com his office expects to decide on rates by the end of June. Ferguson said the exchange also needs to review the proposed insurance plans "to ensure that they meet our criteria." That work is expected to be done by July 15.
Blue Cross, Rhode Island's dominant insurer, is asking Koller to increase insurance rates next year by 18% for individuals and 15% for small groups, citing continued growth in medical costs as well as new fees and taxes required under the Affordable Care Act, which mandates that almost all Americans get insurance.
Blue Cross expects enrollment in its individual health plans to jump from 17,000 this year to 35,000 in 2014 and 50,000 in 2016, driven largely by the new health law - and the insurer projects dramatically different experiences for different customers once it's implemented.
According to Blue Cross, a 28-year-old male Rhode Islander who makes $34,000 annually and currently pays a monthly premium of $116 for an individual plan may see his premium more than double to $244 next year. But a 59-year-old woman who makes $30,000 and currently pays $534 a month for the same insurance plan may see her premium drop by half to $256.
The Families USA study estimates 57% of the 82,810 Rhode Islanders eligible for insurance subsidies make between 200% and 399% of the federal poverty level and 87% of them are in working families, roughly in line with national averages. The lowest-income Rhode Islanders are eligible for Medicaid, the federal-state insurance program for the poor.
About 15% of eligible Rhode Islanders are 18 or younger; 40% are ages 18 to 34; 33% are ages 35 to 54; and 12% are ages 55 and up. Rhode Islanders over the age of 65 are eligible for Medicare, the federal health program for senior citizens. By race, 67% of eligible Rhode Islanders are non-Hispanic whites, 21% are Hispanic and 6% are black.
Another major challenge for Ferguson and the exchange's staff is getting the word out about the new insurance system.
Just 21% of Rhode Island adults had heard of the new health exchange as of early April, although two-thirds said they were interested in using it once they heard a description, according to a Lake Research Partners survey commissioned by the exchange.
Unlike other states, the Rhode Island exchange doesn't have a brand name yet. The Lake Research poll tested four possibilities - RI Health Source, Health Source RI, Ocean State Health Source and Forward Health Rhode Island - and found the first two options got the best response.
They also tested two possible slogans: "Your health. Your way" and "We've got you covered."
Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi
Source: http://www.wpri.com/dpp/health/study-obamacare-to-subsidize-83000-in-rhode-island
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