Rhode Island State Specific Strategies

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The Wellness Health Benefit Plan (HEALTHpact)

In 2006, Governor Donald Carcieri signed into law a new health initiative focused on providing premium relief for small businesses. Under this law, the Health Insurance Commissioner was empowered to work with business, insurance, and other stakeholders to develop a new, affordable health plan, called The Wellness Health Benefit Plan. For this new product, the Commissioner was given additional regulatory authority for product and rate approval. The legislation set a target premium of 10 percent of wages, while at the same time requiring the benefit design to meet certain affordability principles.

Meeting this legislatively-defined price point meant creating a product that would be priced approximately 25 percent below typical market rates[1]. As such, it was intended to slow the erosion in the small group offer rate by providing an alternative to high deductible health plans for low wage small businesses. The new product, called HEALTHpact, achieves this price point through a combination of innovative Wellness elements that create financial incentives for individual enrollees to make healthier choices[2].

The carriers began offering the HEALTHpact plans beginning in October, 2007.  As of March, 2008 there were approximately 500 enrollees across 130 small employer groups.  Enrollment is capped at 5,000 lives per insurer. 
Other important early lessons learned from the HEALTHpact development process that states should consider are as follows:

  • Benefit Design:  The market responds best to incremental changes -- so, states are cautioned to keep benefit designs similar to existing market options.  Additionally, the carriers are well suited to handle detailed plan design – it is important to allow them some flexibility to anticipate and respond to market needs. 
  • Wellness Elements: Employers like having employees with some incentives for healthy behavior, and for those incentives to be at the individual (rather than group) level.  However, many people are skeptical of health risk assessments, and the implications for exclusions and pre-existing conditions.
  • Marketing:  Successfully introducing a new product into the marketplace requires significant outreach and education.  State and carrier resources must be allocated for this effort.  States must also consider the distribution channel:  Will the product be more work for them? Should they be certified to sell it? Should they get additional compensation?  In addition, in Rhode Island, HEALTHpact needed to be marketed as dual option so that employers could “try it out” without committing all their employees to the new product.

[1]The average monthly premium for United for the first year for
individual plans is $309. For BC its $322.

[2]Plan design summaries for United are available on-line at http://www.uhc.com/live/uhc_com/Assets/Documents/RIPledgeAdvBS.pdf
(advantage level cost sharing benefits summary), and
http://www.uhc.com/live/uhc_com/Assets/Documents/RIPledgeCOC.pdf (full
certificate of coverage for Pledge Plan - UHC's Healthpact plan)
(benefits summary for basic level cost sharing on the pledge plan.  Blue Cross Blue Shield of Rhode Island offers a similar plan design option.