NEW: Stenhouse Refutes Roberts' Claims on 2009 Health Policy Study

NEW: Stenhouse Refutes Roberts' Claims on 2009 Health Policy Study

Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity issued the following response to Lt. Governor Elizabeth Roberts' statement on the 2009 Robert Wood Johnson Foundation report "Considering a Healthcare Exchange."

"There are a number of counter-points that need to be made," said Stenhouse, who is the Executive Director of the free enterprise public policy think tank.

Stenhouse's Response

Stenhouse offered the following statement on the current debate. 

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"After reviewing Lt. Governor Robert’s official statement in response to revelations that her own 2009 group advised against the viability of Rhode Island maintaining a state-based exchange, there are a number of counter-points that need to be made.

First, this issue of transferring the state’s health care exchange to the federal government is critically important to discuss for two reasons. It is not too late to begin an orderly transfer to the federal government and to purge related expense items from the FY2015 state budget, then use that money to pay for other reforms such as tax cuts, eliminating bridge tolls, etc.

Further, as a new Governor will inherit this huge budget problem in 2015, along with his or her own executive order powers, it is vital that this year’s gubernatorial campaign rigorously debate the stated positions of each candidate.

Back to the Lt. Governor’s recent statements, along with those made by HealthSourceRI Director, Christine Ferguson, and other state officials. It appears that a pattern of evasion and mis-information is emerging, indicating that these officials believe they cannot otherwise justify the value of the exchange’s continued existence in our state. Especially when RI taxpayers can have essentially the same system for ZERO dollars if the exchange is turned over to Washington, DC for management."

Stenhouse's Counterpoints

In addition to his statement, Stenhouse added the following "counterpoints."

"Lt. Gov. Roberts complete ignores the ongoing cost issue, namely, whether there is enough value in burdening Ocean State taxpayers or policyholders with the very high ongoing expenses of running HealthSourceRI – to the tune of $23 million per year, when we can transfer the exchange to the federal government for less than $5 million per year. In deliberately changing the topic, by stressing that the federal government funded subsidies and the start-up costs of planning and building the exchange, Roberts knowingly ignores that the high, ongoing annual operational burden will remain; a burden that lawmakers are grappling with today. The 2009 report stressed the lack of scale in Rhode Island to support the cost of ongoing annual operations. Start-up funding and subsidies were not the primary consideration.

Roberts continues to insist cost containment and affordability is achievable.  Robert’s own study group’s 2009 issue brief stressed the reality that it is not a viable goal for an exchange to seek to bend the cost-curve down; a mythical benefit that we also have empirically not seen in Massachusetts after six-plus years of operation of its exchange. In mentioning that she expects “less expensive” policies to be available next year, she offers few details and fails to explain that premiums are just one component of health insurance policies, and that overall healthcare expenses include other important components. How high will the deductibles be? What will be the total out-of-pocket cap, if any?  What provider network will be available? These latter three components are just as important to policyholders, and cannot be ignored.

Officials continue to tout that federal funds will cover the cost of the exchange over the entire FY2015 budget cycle. This is false, as there are $15 million in line items for the related UHIP project in the proposed budget.

Director Ferguson repeatedly and incorrectly promoted a $17.3 million federal fee as a scare tactic, when the real figure is under $5 million, also ignoring the $38 million total cost of keeping the exchange state-funded.

With the vast majority of HealthSourceRI sign-ups enrolling in Medicaid, which will require an additional $50 million per year from RI taxpayers, why do we need a $23 million per year system for such, when we previously had a Medicaid enrollment system in place?

Director Ferguson and Chief-of-Staff Licht purposely floated, or allowed to float, the perception that RI may have to repay some of the federal funds. There is no such provision in the ACA law. They should know this.

The federal funds, so cavalierly boasted about to finance the exchange for the next year, may be illegal; federal funds are expressly prohibited from being used to operate the exchange after 2014 BOTH by the federal ACA law and by Governor Chafee’s executive order.

Supporters of the exchange repeatedly are attempting to deceive the public and point towards a dubious cost-containment potential as the primary benefit. Do they have no other leg to stand on?

If HealthSourceRI is permitted to continue to be operated locally, at the expense of Ocean State taxpayers and/or policyholders, accountability for this professed affordability benefit will likely end-up working against the exchange’s viability in future years. Our Center, and others, will keep close watch."