RI health exchange in middle of 'steady build'

PROVIDENCE, R.I. (AP) -- The director of the new state health insurance exchange being created as part of the federal health overhaul says that it is on track to begin enrolling Rhode Islanders this fall and that it should offer patients a larger role, additional choice and more affordability in their health care.

Christine Ferguson said the exchange — an online insurance marketplace designed to help individuals and small businesses buy health coverage — is in the middle of a "steady build." That includes everything from the technology needed to allow people to enroll online to the outreach that will be done to get people to use it.

The exchanges, which are being rolled out in every state, are a centerpiece of the federal Affordable Care Act, the biggest addition to the social safety net in the U.S. since Medicare and Medicaid in 1965 and an attempt to get coverage to about 30 million Americans who lack it.

"At a time over the last 20 years when everything's been contracting at the state level, we're talking about creating some new capacity," Ferguson said in a recent interview with The Associated Press. "I think that that offers us a wonderful opportunity."

Rhode Island is one of 18 states building its own exchange and is using about $74 million in federal funds. The new health care law requires most individuals to have insurance as of Jan. 1, provides subsidies to help pay for it and penalizes those who don't get it. Businesses with 50 or more employees also will be required to offer coverage, or likewise face a penalty.

State officials say about 126,000 Rhode Islanders are uninsured in a population of just over 1 million — about 12 percent. Through the exchange and an expansion of Medicaid, the government program that provides health coverage for low-income individuals, Rhode Island hopes to eventually achieve near universal coverage.

Ferguson did not offer a timetable for reaching that goal. She stressed that, even with the sweeping federal legislation and the creation of the exchanges, change in the health care system will not come all at once — and, instead, will be "evolutionary." Over time, she said, reforms supported by the exchange should help shift the dynamic in a health care system that is driven more by insurers than patients.

"We need to create an environment where individuals are the ones that are picking the options, and that's going to tell us a lot about what people's expectations of the health care system are," said Ferguson, who served as Rhode Island's human services director from 1995 to 2001 and was public health commissioner in Massachusetts under former Gov. Mitt Romney. "Right now the health care system is not a reflection of what people want, it's a reflection of what payers want."

The so-called individual mandate to purchase insurance — which was challenged all the way to the U.S. Supreme Court — will take some getting used to, Ferguson said.

"It's going to take some time to get with the program and to understand what they have to do," she said. "Frankly, they're going to make economic decisions about whether it makes more sense for them to pick up coverage or take the penalty — that's human nature," she said. "I think that if we do a good job and are able to offer options to them that make sense, I think they'll pick it up."

Donald Nokes — president of the Rhode Island Business Group on Health and past vice chairman of the State Health Exchange Board — said the jury is still out on the exchange because it's early.

Nokes, the founder of NetCenergy, an IT company with about 30 employees, said he is cautiously optimistic that small business employees will be able to get more tailored coverage through the exchange — better than a "one size fits all" plan he can offer — at a competitive cost.

But he's also concerned about how much federal money is being spent to build the exchange and how it will be marketed to small businesses so that they will use it.

Nokes, who used to offer 100 percent company-paid coverage but says skyrocketing costs forced him to have employees cover 40 percent, said the Business Group on Health still has many questions about the exchange.

"What we hope to do is do the vetting, understand it better and take a position," he said.