RI’s Health Exchange Grant: What Will $58M Buy?
Monday, December 19, 2011
Rhode Island is the first state to secure $58 million in federal funds to bring the state health exchange to life. The state did everything in its power to get the money, including our Governor, Lincoln Chafee, who used an Executive Order to bypass the General Assembly to create the Exchange.
While use of the Executive Order is being challenged legally on a local level, and the future of healthcare reform remains unknown, it looks as if RI gets to keep the $58 million no matter what. So what will it be used for?
Health & Human Services awards the money to states to set up and operationalize the Exchanges. What that entails is the following:
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Portal. The first step is to establish an infrastructure around an Exchange that will serve as a web-based portal for determining whether individuals qualify, based on income, for the federal subsidy for the insurance programs sold through the Exchange.
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Marketplace. Some of the Exchange funds will establish the online marketplace for individuals and small businesses to research and purchase insurance.
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Technology. For those who are not computer savvy or healthcare literate, part of the money will go toward telephonic support and perhaps even personal assistance.
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Offices. Employees will be needed to help consumers navigate their way through the Exchange some of the $58 million will be needed to cover staff costs.
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Health plan certification. The federal government is creating rules about what the Exchange plans have to offer – and Rhode Island can create even stricter rules. Some of the money can be used toward health plan qualification, financial stability and oversight to meet these requirements.
It’s estimated between 81,000 and 170,000 Rhode Islanders who will actually enroll in the Exchange. Based on 81,000 enrollees, the cost of the exchange is $716 per enrollee.
So will it take $58 million to set up the Rhode Island Exchange? What if all the money is not spent? Can leftover funds be set aside to help with premium subsidy? The answer is no. This money is not intended to provide premium relief or services. And while it can be used to improve the Exchange after it's up and running, the Exchange must be self-supporting by 2014.
Ultimately, the goal of the Exchange is to make healthcare more affordable. In three years’ time, we will know if it will work.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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