When the state proposed charging premiums to some participants in its much-heralded RIte Care medical insurance plan, advocates worried that the move would drive needy families away. But with first payments due this month, the Department of Human Services says more than half of the 4800 families targeted have indeed made the payments and that more checks may be on the way. "It is certainly better than the critics suggested it would be," says DHS director Jane A. Hayward.

Some RIte Care participants told the state they were able to get private coverage through insurance of spouses or other family members, Hayward says. Still, she says, some families will be dropped from the program for lack of payment -- and the state is worried that they may be hurt in the process.

The premiums are being charged to about 11 percent of the 43,300 families covered by RIte Care, in which state and federal Medicaid funds provide health-care through HMOs the same way that employer-provided plans do. The participants being assessed have somewhat higher incomes than most, between 150 and 250 percent of the federal poverty level. For example, a family of three earning up to $27,065 a year has to pay $43 a month. A three-member family with up to $36,575 is charged $58.

While these are laughably low co-payments compared to what people with private insurance sometimes pay -- often half the bill -- Hayward and the department's critics agree that the new payments are painful. "To me, if we lost half the families, we should be concerned about the half that we lost, and understand more about the half that stayed on," says Linda Katz, policy director of the Poverty Institute at the Rhode Island College School of Social Work.

Katz worries that families with serious illnesses may have taken money from other expenses, such as food, in a desperate move to maintain health coverage, or that only the relatively better-off families paid the premiums. The state ordered the premiums last year because of increasing RIte Care costs.

Health advocates also worry that the premiums are the first step toward higher costs for RIte Care participants. In fact, the Department of Human Services has discussed hiking the new premiums next year to a range of $60 to $90 a month.

Issue Date: February 8 - 14, 2002