Rhode Island: Single-Payer Program

Rhode Island: Single-Payer Program

Upshot

  • The Act for a Comprehensive Health Insurance, H. 8199 and S. 2769, would establish the Rhode Island Comprehensive Health Insurance Program (RICHIP), single-payer health care insurance program for all state residents.

  • The program would be financed by two mechanisms: 1) consolidating existing government and private payments to multiple insurance carriers into a single-payer program; and 2) progressive taxes on large businesses and federal reimbursements. These financing streams would replace insurance premiums, copays, and deductibles

  • The Senate Committee on Health and Human Services and the House Committee on Finance recommended that the bills be held for further study, indicating that consideration of the bill is indefinitely postponed.

Background

Rhode Island operates a state-based Marketplace and two insurers offered coverage in 2022. The state also features a Small Business Health Options Program (SHOP) Marketplace for small businesses. Additionally, as of 2020, Rhode Island implemented an individual mandate with a penalty and received approval for a reinsurance program. For the 2022 open enrollment period, approximately 32,000 residents enrolled in Marketplace coverage.

Summary

The legislation (H. 8119 and S. 2769) would create the Rhode Island Comprehensive Health Insurance Program and would establish requirements related to oversight and administration, eligibility, benefits, provider participation, and financing. Additional details follow.

  • RICHIP Director: The governor would be required to appoint a RICHIP Director to oversee the program, which would include ensuring the operational well-being and fiscal solvency of the program, pursuing necessary federal waivers, establishing procedures for eligibility and enrollment, and creating expenditure, status, and assessment reports.

  • RICHIP Board: The bill calls for the establishment of a RICHIP Board that would be responsible for annually establishing the RICHIP benefits package, including a formulary and a list of other medically necessary goods, as well as procedures for handling complaints and appeals related to the benefits package. The Board would also be responsible for establishing provider reimbursement and a procedure for handling provider complaints and appeals.

  • Eligibility: The legislation states that all qualified residents of the state could participate in RICHIP. The director would be responsible for establishing procedures to determine eligibility, enrollment, disenrollment, and disqualification.

  • Benefits: RICHIP would provide coverage for services and goods deemed medically necessary by a qualified health care provider, including EHBs, and other services covered by Medicare, Medicaid, and CHIP. 

  • Providers: All providers would be eligible to participate in RICHIP and would be required to meet state licensing requirements in order to participate. Providers would be able to elect to either participate fully in the program or not at all. The bill explains that for-profit providers may continue to offer services in the state, but that they would be prohibited from charging patients more than RICHIP reimbursement rates for covered services.

  • Provider Reimbursement: The RICHIP Board would determine reimbursement rates to providers. Rates would be required to be equal or greater than Medicare rates. The bill also stipulates that the minimum rate for outpatient behavioral health services would be equal to 150 percent of the Medicare rate. Finally, for services in which there is no Medicare rate, the Director would set the minimum rate. The Director would also be required to review the rates at least annually.

  • Private Insurance Companies: Private insurance companies would be prohibited from selling insurance coverage to Rhode Island residents that duplicates the benefits provided under RICHIP. This would mean that the existing individual market insurance plans and employer-sponsored health plans would not offer coverage of these services.

  • Financing: The Director would be required to submit a revenue plan to the governor and general assembly for approval. The basic structure of the initial revenue plan proposal would be based on a consideration of: 1) the anticipated savings from a single-payer program; 2) government funds available for health care; 3) private funds available for health care; and 4) replacing the current flat tax rate across all incomes with a tax rate that is proportional to income level to finance RICHIP. Such funds would be deposited into the RICHIP trust fund.

The Office of Health and Human Services would be required to seek and obtain waivers and other approvals related to Medicaid, CHIP, Medicare, federal tax exemptions for health care, the ACA, and any other relevant federal programs so that federal funds and other subsidies that would otherwise be paid to the state, its residents, and health care providers, would be paid by the federal government to the state and deposited into the RICHIP trust fund. These waivers could include Section 1332 and 1115 waivers.

  • Implementation: The Director would be required to complete an implementation plan to provide health care coverage for qualified residents of the state within 12 months of enacting the legislation.