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Medicaid, SCHIP, & Federal Authority

  • Section 1115 Waiver – After receiving approval from the Centers for Medicare and Medicaid Services (CMS) in 1993, the state originally implemented the Rhode Island RIte Care demonstration, providing families on the Family Independence Program and eligible uninsured pregnant women, parents, and children up to age 19 with comprehensive health coverage. RIte Care currently provides coverage to parents with incomes up to 185 percent of the federal poverty level (FPL) and to children and pregnant women up to 250 percent of the FPL using title XIX and XXI funds.

    Under the demonstration, the state also operates a premium assistance program, RIte Share, which is available to those who qualify for Medicaid coverage. RIte Share helps families get health insurance coverage through their employer (or spouse’s employer). If a family qualifies, RIte Share will pay for all or part of the employee’s share of the health insurance premium. RIte Share also pays for co-payments in the employer’s health insurance plan.

    As of April 2008, approximately 7,428 people were enrolled in RIte Share.  For every 1,000 people enrolled in RIte Share, the State of Rhode Island saves over $1 million in avoided costs.  RIte Share has been an effective tool to address concerns about “crowd out” (substituting public coverage for employer-sponsored insurance). 


Dependent Coverage

  • Insurance carriers must cover unmarried dependent children up until the age of 19 or until 25 if the young adult is financially dependent and is at least a part-time student. Rhode Island has special dependent provisions for disabled children. (Public Law 2006-377).

State Specific Strategies

  • 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
    (advantage level cost sharing benefits summary), and (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.