ObamaCare primer


Like the headlights of a Mac Truck on I-95, HealthSource RI (HSRI), our health insurance program under what is both derisively and fondly called ObamaCare, is coming at us hard and fast:

l  Enrollment starts on Tuesday, Oct. 1;

l  Insurance coverage begins at 12:01 a.m., New Year’s Day, 2014;

l  Then the whole enrollment process for next year is over (for individuals), March 31. 

But it’s taken quite a long time to get here. 

Way back, 104 years ago, President Theodore Roosevelt said the government should see to it that all Americans are provided with health care. He was one of the first world leaders anywhere to propose the idea. And it caught on right away – only not in this country.

Over the years other U.S. presidents – FDR, Truman, Johnson, Nixon, Carter and Bill Clinton (with First Lady Hillary to coordinate a national health care system) – all took a swing at it. And missed. 

During the last century, Republicans, Democrats and third parties of all stripes have tried to get universal health care going in the U.S. But every time, strong political and economic factions shot it down.

In the meantime, every other industrialized nation on Earth adopted some method of protecting their citizens against devastating losses due to catastrophic illness or injury – the cause of almost 75 percent of all bankruptcies in the U.S.

Finally, when President Barack Obama signed the Affordable Care Act (ACA), in 2010, it marked the end of one very long journey for the country – and started a short, intense sprint in Rhode Island.

Basically, the ACA seeks to expand Medicaid coverage for lower income Americans, provide federal subsidies to help pay insurance premiums for those making more (for example, in Rhode Island, a single person making less than $46,000 a year, or a family of four earning under $94,000, qualify for some federal help), and give small businesses tax credits to offset the cost of maintaining health insurance policies for their employees.

The ACA asked states to set up their own exchanges where their citizens and businesses could go to buy affordable insurance. The plan was to reduce the number of Americans without health coverage – estimated to be about 47 million people – and lower the overall cost of health care in this country, which is currently higher than any other nation on the planet.

Rhode Island was the second state to sign on to the provisions of the ACA. By Executive Order, in January 2011, Governor Lincoln Chafee made Rhode Island one of 17 states (plus the District Of Columbia) to opt to set up and run it's own insurance exchange, now named HealthSource RI.

The other 33 states have, by default, become either willing or unwilling partners with the federal government to provide greater availability of health insurance within their borders. Some have accepted federal Medicaid money to expand health care to low-income families but are letting the feds set up insurance exchanges for the rest of their people.

But 23 state governments have taken a hard line and refused to accept any part of the ACA.

In Rhode Island, however, turning down federal funds was never an issue, including grants totaling roughly $65 million awarded to help HSRI get started.

The task was to develop a program that would marry new plans from health insurance companies doing business in the state with new ACA guidelines. HSRI would then provide access, and a competitive marketplace, for individual and small business plan purchasing. Health care reform in every sense of the word.

To get going, insurance plans and levels of coverage needed to be devised, and premiums established for each level. Workable deductible, co-insurance and co-pay amounts had to be decided, along with a thousand other details.

And all of this – every category of care, lab service, test, etc. – had to be negotiated with the insurance companies that would provide coverage.

Then a delivery system had to be created, a website for access by individuals and businesses that would provide the answers for each person's unique situation, and be the essence of "user friendly."

The complete program had to be ready to go, start to finish, in about 30 months.

Christine Ferguson was named director of HSRI in June of 2012. Her experience in this field is long and distinguished. She came over directly from the faculty of George Washington University's School of Health and Health Services. Before that, she was both commissioner of the Massachusetts Department of Public Health, and ran Rhode Island's Department of Human Services. Back when she was counsel and chief of staff for U.S. Senator John Chafee, she helped to overhaul the country's health care system.

Making it simple hasn’t been easy

So Ferguson speaks with great authority when she says it's very difficult to make something as complex as the services HSRI provides, both approachable and simple for people to use.

She puts it this way: "It all looks and sounds really complicated. But when somebody who doesn't know a thing about health insurance goes on the website, or calls in to talk to one of our staff, in 5, 10 minutes tops, they get it."

Individuals and small businesses can use the website (healthsourceri.com), the phone, the mail, or come in person to find out what fits their needs and to buy insurance. The department is hiring 75 support people to work with those seeking health insurance answers.

Ferguson is proud of what her new department has achieved. Working out of a converted, windowless, basement gym, a staff of dedicated men and women have turned in virtually countless hours building what she claims is "the best health care system in the country."

And she may be right.

By the end of August, rates and plans were available on the HSRI website, along with automatic calculations of government subsidies and tax breaks available to Rhode Islanders.

The process has proved to be painless, totally non-threatening and fast. Specific insurance rates, tax credits, etc. come on screen almost instantly.

Many people remain confused about ObamaCare because of all the fiery rhetoric and misinformation it's generated over the past three years. In the middle of August, the Kaiser Family Foundation conducted a nationwide poll on ObamaCare awareness and found that as many as 51 percent of Americans say they don't have enough information to understand how it will impact them or their family.

Forty-four percent either think the law has been repealed (8 percent), overturned by the Supreme Court (5 percent) or are unsure whether it's still the law (31 percent).

Also in August, The Commonwealth Fund, a private foundation that tracks health insurance trends, reported that 27 percent of 19- to 29-year-olds they sampled were completely unaware new health care exchanges were coming.

That's crucial information, because the law states that exchanges like HSRI must become self-sustaining, and not reliant on general state revenues, fairly quickly. To do that, a broad swath of the population needs to enroll, and start paying premiums – young, old and in-between; healthy as well as those who aren't.

A huge public awareness campaign is being waged nationwide. And in Rhode Island, more than $2 million has reportedly been budgeted to promote HSRI. The information gap should start to close here.

Disinformation campaigns

But by the same token, there's a lot of money being spent on disinformation campaigns. A vocal and violently anti-ObamaCare crowd in Congress continues to try to derail it. And consumers get stuck in the middle wondering just what this new health care insurance program is and what it isn't.

First, let's take a quick look at what it isn't. Regardless of what you've seen or heard on some of the cable news networks, a few radio talk shows and claims made by politicians and pundits, this is not some new "government-run" health insurance.

Three insurance companies that have been providing coverage for people in Rhode Island in the past – Blue Cross Blue Shield of Rhode Island, Neighborhood Health Plan of Rhode Island, and UnitedHealthcare – will still provide it, via HSRI, next year. And Tufts Health Plan recently announced it would come on board with HSRI in 2015.

It also isn't anymore "socialized medicine" than automobile insurance is "socialized car repair." (But like car insurance, most, but not all, Rhode Islanders will be legally required to have some type of health insurance, and there could be penalties for those who don't.)

Most of HSRI's premium rates for 2014 are now available. They are based solely on the coverage chosen and the age of the insured – the older the insured, the higher the rate.

Women are no longer penalized for being female – they pay the same premium rate as men. And people with pre-existing conditions are no longer rated up because of it. So how is that going to compare to the premiums people pay now?

Monthly premiums under HSRI will probably go up a few dollars for some people, and down a few dollars for others. But there is no evidence for "sky rocketing" insurance premiums some folks are still threatening will happen.

With HSRI, the highest annual out-of-pocket expense for a single person is $6,350 (total deductible and co-pay, without adding in monthly premiums), and $12,700 for a family. And there are plans with annual out-of-pocket costs lower than that.

The program also does away with lifetime caps – there will be no limits on the amount an insurer will pay over the lifetime of the policy. The family of a person struck with a catastrophic health problem no longer has to worry about "running out of insurance."

Some health services have no out-of-pocket expenses at all. Preventive care such as annual check-ups, vaccinations, diabetes and osteoporosis screenings, cholesterol and blood pressure screenings, mammograms, pap smears and other cancer screenings, even colonoscopies and many other services, are free to patients. These are, or will become, part of the law.

Young people can already stay on their parents’ insurance plans until age 26. And insurance companies are required to refund over 80 percent of all profits unspent on actual health care now.

Making it affordable

Expanded Medicaid coverage will allow many more lower income people to afford insurance. Anyone who isn't otherwise insured, and makes up to 138 percent of the Federal Poverty Level (FPL), will qualify for Medicaid in Rhode Island. That means that a single person making up to $15,856 a year, or a family of four earning a total of $32,499, will be eligible for health care under Medicaid.

There are 12 insurance plans available through HSRI for individuals and their families, and 16 plans for small employers and their employees.

All Rhode Island companies employing 50 people or less on a full-time basis are considered small businesses, and can buy health insurance through HSRI. It's estimated that there are 95,000 such companies in the state.

For-profit businesses with fewer than 25 full-time employees (earning an average of under $50,000 each) may qualify for a deduction on their 2014 taxes ranging up to 50 percent of their contribution to insurance premiums paid during the year. For non-profit companies, the tax credit tops out at 35 percent.

HSRI is one of the very few insurance exchanges in the U.S. to offer full employee choice. An employer decides how much he or she will contribute to each employee's monthly premium, and then selects either a sort of "one size fits all" plan, where everyone gets the same coverage, deductibles, co-pays, etc., or a plan that allows each employee to pick and choose the coverage they want for themselves and their families.

The employer's involvement after choosing the program is simple: One check each month to HSRI takes care of it.

It would be naïve and, frankly, downright silly to assume the introduction of HSRI will go off without a hitch. After all, it only looks clean, simple and slick from the outside. Check under the hood and you see it's a massive undertaking with a million moving parts. It's insurance, and little on Earth is more complicated than that. Plus, it's a collection of new insurance plans, new computer software programs and new people attempting to meet the needs of thousands of new customers in a very short amount of time.

But the hard work has been done. And the people at the heart of HSRI are pros, with a vast amount of experience and real dedication. They know what they're doing. So problems – and there will be a few – will be small, limited and swiftly corrected.

At an HSRI presentation in North Kingston recently, a local business owner there to get a briefing said, "I am really impressed with this. I've never seen so many choices. I think you people have done a great job."

Everyone who learns what HSRI will offer seems to feel the same way – the amount of health care choices are remarkable and easy to understand. It's another thing Christine Ferguson is banking on.

"If we are seen as offering health insurance with clear advantages and competitive pricing, it will help attract businesses to Rhode Island," she said.

More businesses means more jobs. And that's another commodity Rhode Island can truly use.


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