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Delivery of Care

What the public option seeks to accomplish

Structure, decision-making, better access to data, more coverage, less fragmentation

Photo by Richard Asinof/File Photo

R.I. Attorney General Peter Neronha talks at length in his office about the health care choices facing Rhode Island during a one-on-one interview with ConvergenceRI in 2024.

By Richard Asinof
Posted 5/11/26
In Part Two, ConvergenceRI, with the help of Mother Jones editor Hannah Levintova, explores the pathways to implementation the Attorney General and his legal team are pursuing to orchestrate a public option health plan in Rhode Island.
Who will orchestrate a public debate about the public option? Who speaks for Brown University, Brown Health or the Brown School of Public Health? How will the proposed public option influence this year’s budget debate? How many people will lose access to health insurance before the potential public option health plan becomes operational in 2028? Will small businesses line up to endorse the public option, as they did with the Affordable Care Act marketplace? Will the newly proposed state health authority operate independently of EOHHS?
If Rhode Island moves ahead and creates a public health option, it sets the stage for more of a regional health compact to become possible. It could incentivize other New England states, such as Massachusetts and Connecticut, to move ahead with their own public option health plan. Vermont, which initially sought to create a single payer health plan but gave up, saying it wasn’t feasible, might find new energy to try under a collaborative public health option. The wild card in any regional collaborative would be New Hampshire, with its legacy of limiting taxation and financial investments in social policy.
PART Two
 
PROVIDENCE — For careful readers of news releases, the plans for the introduction of the public health option by the Attorney General’s office were announced — if not carefully buried — in the press release issued on Thursday, May 7, by Timothy Rondeau, the AG’s spokesperson.
 
Under the headline, “Attorney General Neronha announces new legislation to further address health care crisis,” the AG offered details of legislative proposals to “improve” the state’s current health care crisis, including laws to lower prescription drug prices, legal guidelines to improve the stability of Rhode Island’s hospitals, and legislation to prevent the increasingly predatory practices of Pharmacy Benefit Managers.
 
Specifically, the new legislation would:
 
• prevent unfair and deceptive practices by PBMs;
 
• strengthen enforcement tools available to the Attorney General to prevent unfair or predatory PBM audits of pharmacies;
 
• give the Superior Court authority to place a hospital into receivership if plagued by mismanagement, financial distress or insolvency, illegal or fraudulent conduct, risk of asset loss, or threats to patient health and safety; and 
 
• establish a state-administered prescription drug purchasing pool to allow employers that currently bargain for drugs only on their own behalf to band together with the state to purchase drugs at steeper discounts. 

“We must approach reform with multi-faceted, innovative solutions,” said Attorney General Neronha in the news release, touting his previous legal efforts as the state's public health advocate. “Last year, working with the General Assembly, we made significant strides by increasing primary care reimbursements and reducing burdensome and unnecessary prior authorization requirements. Yet our problems persist. Reimbursement rates are still too low, which makes recruiting and retaining primary care physicians extremely difficult. Many would rather practice in Massachusetts or Connecticut where reimbursement rates for primary care are higher, or forego dealing with health insurance altogether and move to concierge medicine. Rhode Islanders are paying far too much for essential, life-saving medications, and PBMs continue their exploitive tactics, even targeting independent pharmacies that have been faithfully serving their communities for years.”

Then, some eight paragraphs deep into the new release, plans to seek a public health option are introduced: 

“The bills we are announcing today will address these challenges. Yet there is still more to do. In the coming months, my Office will also release proposals to structurally reorganize and reform the state’s health care agencies, including the creation of a new agency which will prioritize data-driven change, and a study by the Brown School of Public Health, commissioned by my Office, on what a public health insurance option in Rhode Island designed to reduce costs and increase access might look like.” (Emphasis added.)

This introduction was then followed by a quote from former House Speaker Shekarchi, setting the stage for continued support of AG Neronha’s initiatives. “I applaud Attorney General Neronha’s health care initiatives and they will be carefully considered in this legislative session,” said Shekarchi in the release.

What the public option will accomplish?

Here is the second part of an interview conducted by ConvergenceRI in partnership with Hannah Levintova, an editor with Mother Jones, with Deputy AG Adi Goldstein and Health Advocate Lee Staley.

In PART One, Lee Staley talked about the importance of putting more controls in the hands of the state in order to respond to health care crises related to cost. Deputy Attorney General Adi Goldstein then emphasized the importance of structural change.  

GOLDSTEIN: I think the key word in what we are saying is “structural.” It is not just a matter of giving out some dollar amounts, potentially saying how much this will cost. Ultimately, that is always the question: how much is this going to cost?

One thing that we have to realize is that — and it’s been borne out not just in the U.S. but across developed countries in the Western world — yes, on the one hand you have to invest, you have to put more money into a health care system if you want to improve it — but throwing more money at the problem is not alone going to fix it. 
 
There are many indications that we spend a lot of money, a lot more money in the United States than in other countries, on health care, and the outcomes are not necessarily better, and, in many metrics, they are worse.
 
And, one of the reasons, I think, and you can see this in Rhode Island, is that every year the Attorney General gets extremely frustrated when it comes time for us to opine about rate increases and premium increases for the various insurance (plans). Why is that? Because it is super fragmented. 
 
Because you have the individual market, you have the small (business) market, you have the (large business) market, and then, it’s already fragmented, within what we see. But of course it totally omits huge swaths of the market —  we don’t see the ERISA (health plans for businesses governed by federal regulations) plans, we don’t see Medicare, we don’t see Medicaid.
 
(The question is): Who does all this fragmentation benefit? We do not have a view; there is zero transparency into how the costs are spread across the population in Rhode Island.
 
And this fragmentation and lack of transparency suggests to me that one could reasonably conclude that it is not accidental. The complexity and the lack of transparency benefits somebody. It does not have to be like that. There are many other systems across the world that are not structured in this way.
 
Who does this lack of transparency benefit? Who actually has all the data?
 
The insurance companies have all the data.
 
They are the ones who know, right, how the rates of the individual market compare with ERISA plans  with small employers, et cetera, et cetera.
 
So we have a huge amount of fragmentation, which leads to a large amount of inefficiencies, because we need to have, presumably, different bureaucracies, whatever, to work and manage these different pots.
 
Again, you’ve got ERISA in this complex (equation).
 
So, I think that the important thing to keep in mind as we talk about this prooosal is not just the fact that it will require additional public investment into health care, which is true.  It will require additional investment and every agrees that additional public investment is (needed).
 
To make that additional public investment worth it, what is really necessary, OK, is a parallel commitment to simplifying the system, reducing inefficiencies and increasing transparencies — and ideally, constructing a public option that can encourage as many people as possible, including potentially employers, to sign up so that have, ideally, a single alternative to the Medicaid Medicare plans. 
 
You can’t force people to do that. You can’t force employers to sign up. You can’t force individuals to sign up. And, nobody would want to.
 
But, ideally, at least the working theory is, the proposal is that if you have a system like that, OK, that can attract as many different players to join it, you will reduce the transaction costs, the administrative costs, everything else, and be able to better manage and control costs across the health care (delivery) system in Rhode Island. 
 
ConvergenceRI: if I can just jump in? Is there a timeline for when this public option will be announced? And, two, when will it be implemented? I think it’s important to have this information out so people can better understand what’s going on. Do you have a timetable for how you plan to introduce this public option to the people of Rhode Island?
GOLDSTEIN: I think we are looking to make this proposal public at least as a subject matter for discussion and consideration by stakeholders, by decision-makers, by legislators within several weeks, if not sooner.

This is a short time frame. As far as implementation, of course, people need to agree and buy into it. I don’t expect that to happen on a dot. It is very complicated; there is a lot to discuss, there is a lot to consider. We expect a lot of questions. There are certainly budgetary implications.

So, you know, whether folks agree that this type of structural change is necessary and will be required… And again, this would require vision and leadership.

That’s what it requires. It requires someone to have the lungs, you know, which is difficult in the best of circumstances, and perhaps might be more difficult in an election year.

I think we’re going to put it out there fairly quickly and then, as far as implementation, at that point it is really out of our hands. 

We have a blueprint for implementation that would allow this to be implemented within a couple of years. That would require real buy-in and commitment.

STALEY: On the implementation front, we have been working with the Brown School of Public Health to provide the financial analysis here. 

For the sake of that analysis, the assumption would be that the implementation, the first year in which this would be offered at the soonest, would be 2028.

And, there is some policy rationale for that. Which is, many of the coverage losses that are attributable to HR One, those enacted last July, many of those will become effective in 2028. For example, some of the key Medicaid cuts, so having a plan available by then is really one of the driving forces that set that timeline. But, it is aggressive. And, frankly, there is a lot of work to be done and a lot of decisions to be made.

The key stakeholders need to consider what the right (timeline) would be on a number of different dimensions. 

But I think what is great about what we are providing is really a foundation for thinking about this, and outlining the key decision points along the way, so that people can really concretely grapple with this issue.

GOLDSTEIN: And, the Brown School of Public Health,  (what they are providing), it is really a framework. And, there are different levers that can be pulled here. There are still some different decision points. Again, if there is a buy-in into this whole structure, there are some different decision points for lawmakers and state leadership to make. 

Again, we live in a world that is (constantly changing); there are decisions that they may need to make, given budget realities.

LEVINTOVA: Can I ask some follow-up questions on the framework that you just described. One is very basic; the other is more complex.The basic one is: If this happens and it is implemented, who is the steward of this plan? What office or department, who is running this; who is in charge?    
STALEY: On that, this is again something that we have a framework in thinking about this. I just want to highlight that this is a decision that is really at the state’s discretion, at the General Assembly’s discretion, to decide.

The framework that we’ve been thinking about is establishing a board of directors that would be comprised of key stakeholders and key officials in state government, whose portfolios already touch this issue area so significantly that they would need to be involved.

And, you can imagine who those might be. And, I think we are also exploring and seeing a lot of value in building in community representation on that board. And expert representation. People with a strong background in public policy, health policy, health care financing, to provide an outside perspective. And, from the community representation standpoint, having people who can speak to the on-the-ground reality of the challenges they are dealing with insurance, and helping to drive some of the policy-making in a more human dimension, is going to be really important.

LEVINTOVA: So, in the most simplified sense, there is a pot of money from different sources — whether that’s from employers buying in, from state funds, or federal funds. And, you have a board of directors who are health experts from different corners who are doling out that pot, in the most simple terms.

In that structure, one of the things you mentioned in the challenges of how you got here is the hospital finance piece: hospitals are operating on low or negative margins, in part because their reimbursement rates are low, in part because of deep inefficiencies — reimbursements are low while you have seven different insurance companies that all have the same departments essentially doing the same thing. Like, wouldn’t it be great if we could have just one, that led to a classic streamlining of incentive? 

How does having this public option where many people in the state are on this one simplified plan solve the hospital financing problem and make their finances healthier? 
STALEY: The analysis that we’ve been working with essentially assumes no reduction in payment rates for hospitals. Mainly, keeping that stable. Hold that concept.

And then, number two, to kind of address the point of why does this help hospitals, why does this help providers? The way that I think about it is we need to get, it would be terrific and really necessary to get out of the world where facilities are having to think so closely about their payer mix. And, having different patients being valued at different rates.

We don’t want providers to worry about that type of consideration. And, the more that we are able to aggregate people under a single financing pool, the less hospital leadership has to worry about that dynamic —and can more cleanly assess their own financial condition and forecasts going forward.

Then, I guess, on a more policy driven level, what we have right now is a system where for under-funded hospitals, the state has essentially little to no control over the private insurance market in driving that market to fund those hospitals. 

As Adi touched on earlier, for ERISA plans, the state can’t mandate or regulate insurance payment rates for certain hospitals. The state identified two struggling hospitals that needed support; (yet under the current system) it would be unable to push plans to reimburse them at a higher rate. It’s pre-empted by ERISA; they can’t touch that. The same goes, for the most part, for the private affordable care act exchange plans as well. There is some control that OHIC has over that, but it is really indirect, (by) promulgating affordability standards and targets over time and how to finance hospitals, but it is a very kind of loose control mechanism.

What this public option does is essentially concentrate that decision-making in one board and allow those decisions to be made by an accountable board in state government that has full control... If we see that there are hospitals struggling, can we identify a better budget that would satisfy their needs in a way that allows them to provide access to care in a more favorable way?

Control is the key piece. Building a system that allows the state to have control over those decisions is essential. And, we don’t have that right now.

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