High Healthcare Costs — Are Insurance Premiums a Cause or an Effect?

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In 2010, the state of Rhode Island decided to tackle high healthcare costs. It did so by requiring insurers to meet affordability standards. The plan worked, but not for the reasons you probably suspect.

Let’s start with what Rhode Island’s standards look like. It required several things of insurers:

  • Premium caps – with annual inflation equal to the Medicare price index + 1%
  • Transition away from fee for service – to value-based payment and other trendy reimbursement models
  • Increase spending in primary care – with a 1% bump each year

Now let’s see what that meant for healthcare spending.

(To read the rest of the article, please visit Forbes.)

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