of Rhode Island

patient financial liability

Hospital Association

The growing cost of co-payments, deductibles and co-insurance continues to frustrate patients, plague providers and worry stakeholders. The issue has been examined locally and nationally with little movement toward a meaningful remedy. The Hospital Association of Rhode Island continues to advocate for:

  • Better Consumer education
  • Appropriate plan design
  • Improved payment mechanisms​​​

Patient Education
Health care is a puzzle of acronyms and scientific terminology. How can we expect the average patient to understand complex payment models that experts with years of experience struggle to comprehend? In addition, increased out-of-pocket costs have made access to care a challenge for many individuals. 

A report by the Commonwealth Fund found:

  • Low-income adults are the most likely among those insured all year to spend large shares of their income on health care.
  • More than two in five adults say their deductible is difficult to afford, and adults with low and moderate incomes are more likely to report difficulties.
  • Adults with high deductibles report delaying needed health care, actions that can lead to more expensive care in the future.
  • Lower-income adults also report difficulty affording their co-payments.

In Rhode Island, the majority of small business employees have deductibles of more than $1,000. The majority of HealthSource RI customers also choose high-deductible plans and face out-of-pocket costs greater than $2,000. 

Plan Design
The Office of the Health Insurance Commissioner Administrative Simplification Workgroup stated in its 2015 annual report to the General Assembly: “With increased reliance on cost shifting to consumers in the form of low premium/high deductible plans, significant burdens have been placed on consumers, even with the availability of other cost-sharing mechanisms like Health Savings Accounts or Health Reimbursement Arrangements.” 

The workgroup recommended:

  • Carriers should adopt a patient-centered, personalized plan selection process that incorporates standardized core functionality and accounts for the differences in population needs.
  • Consumer and employer education strategies should emphasize the benefits of HSAs, HRAs, and other savings accounts.
  • OHIC should collect data on plan enrollment and renewal to guide discussions on limiting the variations of basic plan designs, while minimizing patient disruption.
  • Exploring ways to avoid multiple cost-shares for same day or coordinated services.
  • A study should be conducted that examines the financial impact of plan designs that promote wellness and incentivize stabilizing treatment for chronic illnesses.​ 

Payment Mechanisms
A recent study by Wakely Consulting Group found that cost sharing by health insurance members in Rhode Island is increasing faster than the cost of care. This means that each year, hospitals are forced to collect more funds from patients in the form of co-payments, deductibles and co-insurance. This leads to significant administrative burdens and costs. Statewide groups studying the issue of patient financial liability agree that we must improve mechanisms to ensure prompt, accurate payment to providers. A Senate Commission studying the issue called for up-to-date information on deductibles, a “swipe card” that would provide hospitals with real-time information on deductible balances and allow for payment, and exploration of a health insurance trust fund model, health insurance escrow accounts, or other mechanisms to help patients meet their financial liability requirements.

HARI has introduced legislation that addresses plan design. The 2016 bill focused on mental health care. It would have eliminated patient cost-shares for mental health and substance abuse services. In addition, it eliminated co-insurance for all other insurance products. These remedies have earned the support of the Rhode Island Coalition for Mental Health and Addiction Recovery and Substance Abuse Disorder Mental Health Leadership Coalition of Rhode Island.