Rhode Island: Gov. Raimondo proposes reinsurance AND reinstating ACA individual mandate in 2020 budget
As part of her proposed 2020 annual budget, Rhode Island Governor Gina Raimondo has included an item of particular interest to those following the ACA:
Health Care Access and Affordability
State government plays a critical role in today’s health care system. Every policy decision we make has an impact on the individuals, children and families who need care. The Governor’s FY20 budget proposal builds on this momentum, preserving vital ACA protections that promote market stability and help to keep uninsured rates low. There are no eligibility cuts or broad-based benefit impacts proposed.
...Market Stability and Reinsurance Initiative
Rhode Island’s healthcare insurance premiums are among the lowest in the country. Our healthcare exchange experienced the highest year-over-year growth nationally in 2017. Ensuring market stability is key to keeping health coverage affordable for Rhode Islanders. The Governor proposes to fund implementation costs to institute a reinsurance program and reduce market risk for insurers, which results in a more stable market and lower premium increases for Rhode Islanders.
To further mitigate any potential changes to the ACA that could impact Rhode Island’s progress on access and affordability of health care, the Fiscal Year 2020 proposal also includes an individual mandate – modeled after the federal ACA program. This will ensure that Rhode Islanders have health coverage and that access to that coverage does not break the bank.
I'm having trouble finding more details about either the ACA reinsurance and individual mandate proposals, but it sounds like the mandate penalty would follow New Jersey and the District of Colubmia's lead and simply revert back to the one which was just repealed by Congressional Republicans in December 2017: $695 per adult & $348 per child or 2.5% of taxable household income. I presume that Rhode Island would also follow New Jersey in using the revenue generated from mandate penalty payments to help fund the reinsurance program in question.
Needless to say, I'm in favor of implementing both of these (depending on the specifics, of course). The only actual line item I could find in the budget itself was this:
Individual Mandate Implementation. The Governor recommends an increase of $400,000 in general revenue to fund HealthSource RI’s implementation of Individual Mandate updates.
While I support both reinsurance and reinstating the mandate penalty, I find it interesting that Rhode Island is one of the first ones onboard with the mandate. On the one hand, RI is a pretty blue state so it isn't surprising that they'd be pushing for full implementation of the ACA. On the other hand, neither Blue Cross Blue Shield of Rhode Island nor Neighborhood Health Plan (the two carriers participating in RI's individual market) seemed to think the mandate being repealed would have that much of an adverse selection impact last fall--Rhode Island has the smallest projected premium impact of any state which doesn't have a mandate penalty in 2019 (i.e., aside from DC, MA & NJ).
Even so, reinstating the mandate and setting up a reinsurance program were both recommendations of the Market Stability Workgroup report written up last summer, so either Gov. Raimondo is just being proactive (which is good), or the carriers misjudged the impact after all (RI's ACA exchange broke last year's enrollment numbers, but it's possible that their off-exchange individual market, which is part of the same risk pool, fell off a cliff).
Anyway, it'll be interesting to see how this plays out for 2020...and if the combined effect has as much of a downward push on 2020 premiums as it did in New Jersey (where unsubsidized enrollees are saving over $1,500/year apiece thanks to their one-two punch), it'll be worth it.