Small Group Health Insurance Reform in Rhode Island: Promises and Pitfalls of the HEALTHpact Plan

Objective

This study analyzes what design elements inhibited enrollment in HEALTH.

Study Setting

HEALTH is a high deductible plan with a premium capped at 10 percent of the average Rhode Island wage. Deductibles are reduced if enrollees meet wellness criteria.

Study Design

Qualitative case study.

Data Collection

Archival documents and 23 interviews.

Principal Findings

Inclusion of a subsidy would have led to lower premiums and more generous coverage. Although priced lower than other plans, HEALTH still did not offer good value for most firms. Wellness incentives also were too complex.

Conclusions

Subsidies for purchase of insurance coverage are critical to national reform of the small group market. Designers also will need to carefully balance program complexity with innovation in encouraging wellness and product appeal.