Obamacare or no Obamacare, health insurance is expensive in Rhode Island.
The average employer-sponsored health insurance plan cost $5,924 for an individual and $15,273 for a family in 2011, according to the Kaiser Family Foundation. The average premium for a plan bought on the individual market was $4,779 in 2009, the third-most in the country, according to America’s Health Insurance Plans. And the plans being sold on the new HealthSource RI marketplace aren’t exactly a bargain, either.
The R.I. Center for Freedom and Prosperity, the newish local free-market advocacy group run by Mike Stenhouse, thinks the General Assembly should take steps to try and bring down those costs. The ideas are collected in a new report by the center’s Washington-based adjunct scholar Sean Parnell.
“An important element of these policies is that they require very little in the way of additional state resources, and these recommended programs do not fundamentally upset the structure of the ACA,” Parnell writes, referring to Obamacare’s formal name, the Affordable Care Act.
“Instead, these policies focus primarily on those individuals and families that will remain outside the law and ensure that their medical care financing needs can be met, as well,” he writes, adding that “Rhode Island can become a national model for other states, fulfilling the promise of ‘near-universal’ health care coverage that proponents of the ACA worked so hard to achieve.”
A few things are interesting about Parnell’s report beyond the policy prescriptions themselves.
For one thing, it’s clearly targeted at a blue-state audience – while Parnell is critical of Obamacare, the study is premised on the idea that it’s the law of the land and here to stay. Nor does it criticize the goal of universal health coverage. Furthermore, he’s wading into a discussion that state lawmakers already signaled an interest in when they passed Senator Miller’s Rhode Island Health Care Reform Act of 2013 in July.
Parnell offers four main proposals in his 22-page report. Here’s a quick summary.
1) Address the large number of health benefits mandated in state law.
Rhode Island law mandates that insurance plans cover 69 benefits, the largest number in the United States. (Parnell says 70, but he’s using old data.) “To reduce premiums for Rhode Island residents who purchase insurance through the individual market,” he argues, “the state should re-examine the trade-offs between mandated medical benefits and increased premium costs.” This is already supposed to be in the works: Miller’s legislation requires Health Insurance Commissioner Kathleen Hittner to send lawmakers a report by April 1 on the cost of all Rhode Island’s health mandates. Parnell thinks insurance plans should be offered that are exempt from some or all of those mandates.
2) Let Rhode Islanders buy health insurance across state lines.
This idea often gets criticized by liberals, who say they fear it will lead to a “race to the bottom” à la credit cards, where the state with the most lax regulation gets all the business. But Parnell makes a more limited suggestion that could alleviate some of those fears: at least let Rhode Islanders buy plans from Massachusetts and Connecticut, which aren’t exactly red states known for terrible health systems. Doing so, he argues, could increase competition for Rhode Island hospitals and insurers alike. It’s somewhat similar to Aaron Renn’s proposal to harmonize Rhode Island regulations with those in Massachusetts.
3) Bring Christian health-care sharing ministries to the state.
This idea hasn’t been discussed much locally: encourage the creation of Christian health care sharing ministries, which are nonprofit plans that allow individuals and families with similar religious beliefs to pool risks and costs. Parnell specifically suggests Rhode Island lawmakers pass the Health Care Ministries Freedom to Share Act, which is model legislation drafted by the controversial American Legislative Exchange Council (ALEC). He highlights two points about the ministries: one, they are often open to illegal immigrants; two, they don’t have to cover abortion or contraception.
4) Promote policies other than comprehensive health insurance.
One of the defining features of the Affordable Care Act is that it requires all insurance plans sold on HealthSource RI and the other new marketplaces to cover “essential health benefits,” which is aimed at making sure nobody buys a plan that’s so bare bones it doesn’t cover what they think it does. The downside: comprehensive insurance means more expensive insurance (hence why Obamacare added subsidies for lower-income Americans). Parnell suggests Rhode Island should encourage those who can’t or won’t buy traditional comprehensive insurance instead to get critical illness, accident, or fixed-benefit insurance policies.
What do you think? Good ideas? Bad ones?