PROVIDENCE, RI – In an effort to help increase competition among health insurance companies, reduce health care costs for consumers, and provide more Rhode Islanders with access to quality, affordable coverage, the state’s Congressional delegation today announced that Rhode Island will receive $5.2 million in federal funding to set up an online system where Rhode Islanders may shop for health insurance.
This federal grant, administered by the U.S. Department of Health and Human Services (HHS), will enable the state to establish a Health Insurance Exchange, which will provide individuals and small businesses with a one-stop shop to find and compare health insurance options. Under the new health insurance reform law, each state will receive federal grants to develop and run their own Health Insurance Exchange by 2014.
According to a study by the American Medical Association, two insurers maintain 95% of the health insurance market share in Rhode Island. Establishing a health insurance exchange will allow individuals and small businesses to compare policies and rates side-by-side, which will help control costs and improve the quality of coverage.
“This federal funding will help increase transparency and competition in the health insurance marketplace and ensure that individuals, families, and businesses have an array of health insurance choices that best fit their needs and budget. And it will lower costs by enabling small businesses to band together to increase their purchasing power,” said U.S. Senators Jack Reed and Sheldon Whitehouse and U.S. Representatives James Langevin and David Cicilline in a joint statement.
HHS announced $5,240,668 will be provided to the Rhode Island Department of Business Regulation to strengthen health information technology systems, develop an integrated consumer support program to provide assistance to individuals and small businesses, and strengthen its business operations.
Last year Rhode Island received a $1 million federal grant to begin setting up its exchange. To date, Rhode Island has received over $56 million from the health insurance reform law.