Small Group Health Insurance Reform in Rhode Island

Promises and Pitfalls of the HEALTHpact Plan

Rhode Island's HEALTHpact plan has been unpopular because it is too complex, lacks a subsidy, and is perceived as having low value.

In 2008, Rhode Island faced a serious health insurance shortage for workers in small businesses. In response, the state created HEALTHpact, an insurance plan that capped the price of premiums. The law required insurers to offer HEALTHpact to small business owners. The defining feature of HEALTHpact was its financial incentive for enrollees to lead healthier lives.

This study investigated low enrollment in HEALTHpact. The authors spoke with state officials, insurance representatives, business owners and consumers. The authors discuss themes that emerged from each interview.

Key Findings:

  • Employers feared being placed in the plan's more costly coverage level.
  • Small businesses lacked the resources to explain HEALTHpact to their employees.

This article appears in a special issue of the journal HSR: Health Services Research. The study was carried out through the Robert Wood Johnson Foundation’s State Health Access Reform Evaluation (SHARE). SHARE guides the implementation of health reform and supports research on the expansion of health insurance coverage.

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