Outgoing AG Neronha’s Parting Plan: A Roughly $400M-a-Year State-Run Insurance Plan and a Health Super-Agency to “Directly Control Health Care Financing” in Rhode Island

What Neronha proposed

On Oct. 29, Attorney General Peter Neronha, a Democrat who leaves office in January because of term limits, released what his office called the “final health care proposals of his administration.” There are two. The first would reorganize Rhode Island’s health and human services agencies. The second would create a “comprehensive public health insurance option,” a state-managed plan sold on and off the HealthSource RI marketplace that any individual could buy and any employer could adopt. According to the AG’s press release, the plan would “mirror the state employee health plan” and would give the state “a permanent vehicle … to directly control health care financing in the state.”

The price tag

The Providence Journal reports that, according to the proposal, the public option would need close to $400 million a year in state funding, which the proposal puts at about 3% of the state’s total annual health care spending. Under the plan the state would collect premiums, pay providers, and use state subsidies to make coverage cheaper. The design comes from work with Brown University’s Center for Advancing Health Policy through Research. That group’s earlier policy brief for the AG said a comprehensive public option would have the state “set payment rates” for providers and “could create a glide-path toward a single-payer system.”

The reorganization

The plan would split the current health and human services structure into two cabinet-level agencies. A Health Administration and Financing Agency would take over the Department of Health, Medicaid, the behavioral health and developmental disabilities department (BHDDH), the Office of the Health Insurance Commissioner, and HealthSource RI. A Human Services Agency would take over the Department of Human Services, the Office of Healthy Aging, and the Department of Children, Youth and Families. A new Office of Health Policy and Planning would sit alongside them to collect data and “steer strategic health policymaking in the executive branch.” The AG’s release says the goal is to “centralize all agencies with a role in health care regulation.”

Neronha’s case is that the current system is failing. His office says more than 25% of Rhode Islanders are underinsured, that federal changes are expected to cost 52,000 residents their coverage, and that insurers keep winning approval for steep premium increases over his objections. “I understand some will scoff at the size and scope of these proposals,” he said. He urged state leaders to “implement them after I leave office.”