Starting in 2014, as part of the Affordable Care Act (ACA), health insurance coverage for individuals and small businesses will become available through new state health insurance exchanges.
Most importantly, the key tax credits (e.g. the small business healthcare tax credits) and tax subsidies will only be available for coverage purchased via a state health insurance exchanges.
All states have three options for setting up a state health insurance exchange for 2014:
- Build a state-based health exchange
- Enter into a state-federal partnership exchange
- Default to a federally-facilitated exchange
Rhode Island will offer a state-based health insurance exchange that will open October 1, 2013 (for coverage starting January 1, 2014).
What is the Rhode Island health insurance exchange?
The Rhode Island Health Insurance Exchange, called HealthSource RI, will aim to connect Rhode Islanders and small businesses to affordable health insurance.
The Exchange will give individuals and small businesses online and in-person access to compare health insurance options and learn if they qualify for the tax credits and subsidies or public health insurance programs.
The Exchange negotiates with health insurance companies to develop new and innovative insurance products. It offers easy comparisons, access to tax credits for qualifying businesses, new ways to buy insurance, and pushes to make insurance choices clearer and more affordable predictable.
The Small Business Health Options Program ("SHOP" Exchange) will also be up and running for October, according to a statement by Exchange Executive Director Christie Ferguson in a recent Rhode Island Public Radio article. " 'SHOP is on schedule and we’re going to have employee choice in Rhode Island. And we’re going to be one of the only states in the country to do that for small businesses,' said Ferguson."
There are approximately 100,900 uninsured non-elderly Rhode Islanders (12%). Of these, healthcare.gov estimates that 91,380 (91%) may qualify for either tax credits to purchase coverage in the Exchange or for Medicaid if Rhode Island participates in the Medicaid expansion.
Rhode Island’s exchange also collects premium payments on behalf of enrollees and remits them to the insurers. To provide more flexibility for payments, Health Source RI partnered with CVS so that enrollees can pay their health insurance premiums at any CVS in the country, using credit cards, debit cards, or cash.
Enrollees paying at CVS have the option to break up their monthly premium payment into smaller, more manageable chunks if they choose to do so.
How was the Rhode Island health insurance exchange created?
After the ACA was passed, Rhode Island attempted to to pass exchange legislation in 2011 (SB 87). However, the legislation failed and in September 2011 Governor Lincoln Chafee signed Executive Order 11-09 to establish the Rhode Island Health Benefit Exchange.
The Executive Order established the Exchange as “a Division within the Executive Department.” It is the only state exchange in the US that was not established by legislation.
Rhode Island received conditional approval from the U.S. Department of Health and Human Services to establish a state-based exchange in December 2012.
What health insurance plans will be available?
The plans offered through the Rhode Island Health Insurance Exchange will be Qualified Health Plans (QHPs) as defined by the ACA, and will be offered in "metal" plans to compare coverage type and the cost of health insurance.
In both the individual and small group market, there are two insurers that offer health plans through HealthSource RI:
- Blue Cross Blue Shield of Rhode Island (BCBSRI)
- Neighborhood Health Plan of Rhode Island (NHPRI)
UnitedHealthcare and Tufts offer small group plans in Rhode Island, but only outside the exchange.
Unsubsidized premiums increased by an average of just over 6% in Rhode Island for 2023 to an average cost of $515 a year for individual plans, over 2022 an average premium price of $477 a year for individual plans.
HealthSource RI still has a functional SHOP exchange for small businesses, which is not the case in most states.
When can participants enroll in health insurance in Rhode Island?
In Rhode Island, open enrollment for individual and family health coverage runs from November 1 to January 31. In most states, open enrollment ends mid-January, so Rhode Island’s window gives residents a greater window of time to select a health insurance plan for 2023.
This enrollment window is an excellent opportunity to take advantage of the enhanced premium subsidies created by the American Rescue Plan and Inflation Reduction Act. The larger and more widely available cost-saving subsidies will remain in effect through 2025.
What is the role of brokers in the Rhode Island health insurance exchange?
An insurance broker acts as an intermediary between a client and a health insurance carrier to help clients find and purchase the best insurance policy that suits their needs. Brokers sell insurance, but they don’t work for insurance companies. They work directly for their client, so their client can receive the best advice when considering insurance options.
Contrary to popular belief, using a broker has no added cost. Brokers make their money through commissions by selling insurance to their clients. Commissions typically range between 2% and 8% of the premium, depending on their state’s regulations.
The Exchange Executive Order created the "Expert Advisory Committee to the Health Benefits Exchange Board" to ensure the voice of insurance brokers insurers and medical providers in the Exchange planning process.
To sell Exchange policies, brokers will need to register with the exchange and receive training. Additionally, states require brokers to have an insurance license via the National Insurance Producer Registry to sell insurance. If you manage other brokers or an agent in other states, you may need a separate insurance broker license in those states as well.
The Rhode Island health insurance exchange allows individuals access to healthcare at an affordable price. Whether you shop on the health insurance marketplace or work with an insurance broker, you can find a plan that’s right for you—no matter if you’re an individual or a small business owner.
With financial assistance through premium tax subsidies to help cover the health insurance costs for those who qualify, it’s easy to stay in control of your health and budget.
This article was originally published on April 30, 2013. It was last updated on December 9, 2022.