Congress

Center Responds to Governor Raimondo’s Federal Healthcare News Conference

FOR IMMEDIATE RELEASE: March 23, 2017
Governor Does Not Understand Goal of Federal Reforms

Fear-mongering not helpful to legitimate debate

Providence, RI – Mike Stenhouse, CEO for the nonpartisan Rhode Island Center for Freedom & Prosperity issued a statement, following a news conference today by Governor Gina Raimondo about her concerns about the proposed federal American Healthcare Act (AHA), which is being advanced in Washington, D.C.

“In conference calls over the past few weeks, I have had the opportunity to speak directly with members of the US Congress who are crafting the new federal healthcare reforms. Unfortunately, the Governor and others on the left do not understand the goals of these reforms; they see government-run Medicaid as the end-all, be-all when it comes to health insurance coverage; and they are spreading unnecessary fears about the proposed federal reforms. Even though Medicaid is a taxpayer-costly, low-quality insurance option, no one will be thrown off or defunded from the system.

The American Healthcare Act seeks to responsibly provide more US citizens with higher-quality, more cost-effective private insurance. This will be achieved through a generous new program of tax-credits and/or payroll deductions that will give Rhode Islanders more choices and multiple new options when it comes to purchasing an insurance plan that best fits their needs. This as opposed to the one-sized-fits-all government mandated coverage that American are now forced to purchase.

Further, the state block-grant aspect of the AHA, will give the Governor, other lawmakers, and health care officials tremendous new flexibility to innovate when it comes to utilizing federal funds in a manner that best suits our state.”

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The “Real” News About Healthcare Reform

The Providence Journal and Rhode Island progressives are doing a disservice to the people of our state by advancing a biased and non-realistic perspective on the federal healthcare reform debate.

There are few issues that are more personal or important than planning for the care that can preserve the health of ourselves and our families. But what governmental approach best helps us accomplish this?

Currently, our state is following the federal Obamacare approach of seeking to insure more people with government-run Medicaid or with a one-size-fits-all government-mandated private insurance plan. This approach is in a death-spiral. In Rhode Island and across the nation, premiums and deductibles have risen beyond affordability; costs to taxpayers have exploded; the supply of doctors, insurance plan choices, and the availability of actual care are all plummeting.This is an unsustainable trajectory.

The U.S. Congress proposed reforms take an opposite approach. The goal of the reforms is NOT to force more people to buy or enroll in expensive government-approved insurance. Rather, the goal is to offer citizens more and lower-priced private insurance options and to let them choose whether or not they want to have health insurance … and what type and level of insurance they believe is best for them.

Compassion should not be measured by how many people are covered by inefficient government insurance or by how much money we throw at the problem. This is the biased, government-centric lens through which the left and the ProJo view the proposed reforms.

As Congress recognizes, there are a number of patient-centric reforms that could significantly reduce premium and out-of-pocket costs, even while expanding consumer choice and improving the quality of care: reducing mandates for services that patients do not want or will never need; allowing inter-state health insurance competition; allowing group purchasing; or encouraging expanded Health Savings Account (HSA) and other payroll deduction programs.

Medicaid, is perhaps the most contentious and misunderstood issue. Medicaid insurance is not necessarily good insurance and it does not always lead to good health care. With many doctors leaving the program because of its stingy payouts, and with enrollment levels continually on the rise, many Medicaid patients cannot get an appointment with a doctor in a timely manner, and when they do, suffer from substandard care.

Again, the new Medicaid reforms seek to reverse these trends. What will not happen is that people will be thrown off the system. What will happen is that Medicaid will be returned towards its original mission of providing health insurance for the neediest Americans; poor children, pregnant women, and the disabled elderly. In recent decades, and especially under Obamacare, eligibility standards have been dramatically expanded to include single and working individuals and families far above the poverty line. Medicaid was not originally intended to be an entitlement for able-bodied, working Americans.

All the while, taxpayers have been asked to bear the burden of this increasingly expensive, expansive, and ineffective Medicaid system.

First, the new reforms would cut the rate of enrollment in Medicaid by tightening the eligibility requirements to serve only the neediest among us. Under these new guidelines, while no one will be thrown off, it is through attrition, as people’s financial circumstances improve, that many will naturally leave the system.

Second, Medicaid reform will protect taxpaying families and businesses from never-ending increases; in effect, putting the system on a much-need budget. This will save money for federal and state taxpayers.

Third, the reforms will give states unparalleled flexibility, via a capped, block-grant type arrangement. With limited funds, based on population, states will be free to innovate and to decide how federal funds can best serve its low-income and disabled populations. For example, not only could enrollment parameters be customized by state, but states may be able to opt for a work-requirement or a co-pay for those above poverty levels. There is even some discussion of a voucher, whereby recipients could have public Medicaid funds instead follow them to a private insurer of their choice. Rhode Island, the trail-blazer when it comes to Medicaid block-grants, should embrace this option.

In summary, the concept of a government-run health insurance market has failed. Rhode Islanders will be better served when they have expanded options to purchase or enroll in one of the many new plans that will best meet their needs at the lowest possible price, and at quality levels.

Levels of money and government-mandated insurance enrollment are not the only standards by which the media, the public, and lawmakers should judge the federal reforms about to be implemented. Freedom of choice, affordability, and quality of care should be the primary metrics.

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Center Calls on R.I. Lawmakers to be Proactive as New U.S. Health Insurance Landscape Takes Shape

FOR IMMEDIATE RELEASE: March 7, 2017

Lawmakers Encouraged to Plan for New Landscape

Providence, RI – With the initial release last night of the U.S. Congressional Republicans’ plan to repeal and replace Obamacare, the RI Center for Freedom & Prosperity today calls on state lawmakers to proactively consider how to fashion the upcoming budget to deal with the shifting federal landscape on health insurance.

Under the new federal plan, gone would be many of the features that led to the implosion of Obamacare’s government-mandated insurance strategy. Soon to be extinct will be the onerous individual and employer mandates and penalties, the costly taxes, state and federal exchanges, and unlimited expansion of Medicaid.

Remaining are popular features such as pre-existing conditions, dependent children coverage up to age 26, and a new form of cash assistance for private-insurance premiums.

“The new law will mean changes and loss of funds to Rhode Island’s health care industry, including Medicaid,” said Gary D. Alexander, adjunct scholar to the Center, who formerly held the positions of Secretary of Health and Human services for Rhode Island and Secretary of Public Welfare for Pennsylvania. “The state should quickly analyze the impact and begin planning how to change course and move to a more of a market-based system that ensures greater budget certainty, care quality, and affordable access.”

As it warned two months ago, state lawmakers will have to find a way to be smarter with state and federal funds. The Center also accurately projected in 2013 that the Obamacare exchange in Rhode Island, HealthSourceRI, would not meet its original goals and would become a burden on the budget. Under the new federal approach, the state-run exchange will soon become a relic of the past. It appears that some of the market-based approaches the Center then recommended must now be considered in order to best complement the pending new federal law.

The Center suggests that the state, perhaps by forming a legislative commission and/or via a gubernatorial created task-force, should immediately begin planning for a number of likely eventualities:

  • How to save state funds by shutting down HealthSourceRI as soon as feasible and returning health insurance sales to the federal government during the transition period away from Obamacare
  • How to reverse the long-term planned increases in Medicaid enrollment and funding that the state was expecting
  • Proactively allow for out-of-state insurers to compete in the Rhode Island market
  • Determine which state-level health-insurance mandates should be repealed so as to allow insurers greater flexibility to craft a variety of plans and pricing levels that meet the demands of would-be enrollees.
  • How to re-work the core strategy for the state’s broken UHIP computer system so as to not encourage increased dependency on government assistance programs
  • Unclear after initial review of the law were the anticipated “block grant funding” and “cross-state” sales models, although they still eventually may be introduced as amendments to the new federal law. These features would be welcome for conservatives, who believe that added competition effectively reduces costs and that states should determine their own policies as opposed to being forced to comply with federal mandates.

However, conservatives are going to have to accept that the new law is an “entitlement”, and that federal and perhaps state funding for health-insurance tax-credits to many Rhode Islanders are a political necessity.

Likewise, liberals are going to have to accept that not as many people will be enrolled in Medicaid. The Center believes it is necessary to limit the current out-of-control growth of Medicaid, which Rhode Island itself has recently experienced.

It is also likely that “health savings accounts” (HSAs) will become more of the standard. HSAs feature lower monthly premiums that cover major medical problem, but also mean higher out-of-pocket expenses for elective and other diagnostic care.

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STATEMENT: RI & Department of Health Reality Check; Center Renews Call for Inspector General

FOR IMMEDIATE RELEASE: November 30, 2016

State Lawmakers Need to Face the Realities of a Trump Administration

Providence, RI– As it warned four years ago, when it advised against Medicaid expansion and the Unified Health Infrastructure Project (UHIP), the Rhode Island Center for Freedom & Prosperity again warns against the ‘business as usual approach’ on display this past week by state officials. The Center suggests that the Rhode Island Department of Health and Human Services (DHHS) and the state administration need a reality check with regard to the now epic UHIP computer systems disaster and the recent announcement of more funds planned to be sunk into expansion of the state’s Medicaid infrastructure.

“Newsflash: in seven weeks, Barack Obama will no longer be President. There is a shifting healthcare landscape and state officials need to recognize that unlimited federal support to continue these costly boondoggles is going to end,” suggested Mike Stenhouse, CEO for the Center. “At a time when the federal government will be making dramatic new course changes towards making private health insurance more accessible to more American families, our state, stubbornly, is doubling down on its plans to keep plowing ahead with the failed government-centric approach.”

The Center believes it is irresponsible to plan to spend hundreds of millions of dollars to expand our state’s Medicaid capacity at a time when the federal government and many other states will be moving in the opposite direction: towards reducing enrollment in the government’s public health insurance offering and, instead, towards increasing private health insurance enrollment through an aggressive offering of premium subsidies and/or tax credits. An even more poignant question is whether or not the new presidential administration and Congress will even re-authorize these funds?

The Center expresses further concern that the hundreds of millions of dollars of planned federal and state spending will do little to help working families and small businesses, who will be expected to pay for this spending, most of which go to enriching insider institutions that are part of the Medicaid system. “For every dollar we spend on this wayward path, that’s one less dollar we can proactively spend on education reform or tax cuts,” suggested Stenhouse.

As it has also maintained for years, the Center continues to warn that the real costs of UHIP have not yet fully materialized. The one-stop-shopping aspect of UHIP will purposely lead to increased enrollment in various government services – resulting in new costs that our state cannot afford and – because of the changing landscape – that the federal government may cut funding.

Based on these examples of government incompetence and the continued hemorrhaging of taxpayer money, the Center renews its call for government checks-and-balances via legislation that would create an Office of the Inspector General. The Center believes it is vital than an independent, non-partisan entity should keep watch over state spending in order to prevent the squandering of taxpayer money as has been seen with the UHIP and DMV (Department of Motor Vehicles) computer systems. Similarly, major spending projects in other state agencies, such as the multi-billion dollar RhodeWorks program to repair the state’s crumbling bridges and roads, must also be subject to close fiscal oversight of this kind.

NEW: Failing RI Report Card Grades Not Advancing Social Justice

FOR IMMEDIATE RELEASE
November 17, 2015

Non-Competitive Grades Harming Work, Mobility, and Opportunity for Rhode Islanders
Preponderance of Fs and Ds Should Signal Need for Change in Policy Culture

Providence, RI — The opportunity for upward mobility for many Ocean Staters continues to be hampered by a non-competitive business climate and onerous family tax burdens, as evidenced by the poor grades the State of Rhode Island received on the 2015 Report Card on Rhode Island Competitiveness, the fourth annual such report, released today by the Rhode Island Center for Freedom & Prosperity.

Burdened with public policies that discourage work and a productive lifestyle, the state’s poor grades in 10 major categories (two F’s, seven D’s, and one C) reflect a government culture geared to benefit special interest insiders, while at the same time promoting job-crushing and soul-crushing dependency among the general populace.

Raising even further alarm, Rhode Island ranked dead-last, overall, when compared with report cards from other New England states.

“This report card clearly demonstrates the wreckage that decades of liberal policies have wrought upon our state. These unacceptable grades should be a wake-up call to lawmakers that a government-centric approach is not producing the social justice and self-sufficiency that Rhode Islanders crave,” suggested Mike Stenhouse, CEO for the Center. “If we want to provide more mobility and opportunity for our neighbors and entrepreneurs, we must completely reform our public policy approach. We must learn to trust in our people and remove the tax and regulatory boot of government off of their backs by advancing policies that empower the average family with choices, that reward work, and that grow the economy.”

The two categories with F grades are Infrastructure and Health Care; the seven D’s are Business Climate, Tax Burden, Spending & Debt, Employment & Income, Energy, Public Sector labor, and Living & Retirement in Rhode Island; while Education received a C-. Among the 52 sub-categories evaluated, Rhode Island received 19 F’s, 24 D’s, 5 Cs, 3 Bs, and just one lone A.

In a related 1-page brief, the Center also analyzes report card trends over recent years as well as comparisons to grades for other New England states.

The RI Report Card, originally developed for the Center by a national economist, compiles into a single document the state rankings among key economic and social indexes, as published by dozens of credible 3rd party national organizations.

The 2015 report card, with citations, as well as reports from prior years can be downloaded at RIFreedom.org/RIReportCard.

Media Contact:
Mike Stenhouse, CEO
401.429.6115 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.

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Open-Eyed Medicaid Reform: Review of Working Group Proposals

Click here for a printable PDF of this analysis.

Josh Archambault with Buddy on Medicaid

As part of her 2016 budget proposal, Rhode Island Governor Gina Raimondo convened a Working Group to Reinvent Medicaid. Although its theme is reform of the way the public healthcare program operates, the selling point has been budgetary savings — specifically in the next fiscal year, when the group expects its suggestions to save or raise $91.1 million, just shy of 10% of state spending.

While there can be no doubt that Rhode Island’s Medicaid system is in need of reform, analysis of the proposals suggests that policymakers should be reluctant to hinge their budget decisions on the savings’ actually being realized. They should also go into the reforms with eyes wide open. Substantial portions are likely to shift costs to their constituents as healthcare consumers and federal taxpayers.

The group divides its proposals into three categories:

  • Payment and delivery system reform
  • Targeting waste, fraud, and abuse
  • Administrative and operational efficiency

Although waste, fraud, and abuse is often a go-to source when government officials promise to pay for new spending without raising taxes, it makes up a very small portion of the working group’s list, at $4.0 million (4% of the expected savings). About two-thirds of the savings come via payment and delivery system reform, with the remainder in administrative and operational efficiency.

These categories are of limited use in understanding how the state is actually supposed to save money. Working with health policy expert Josh Archambault, of the Foundation for Government Accountability, the RI Center for Freedom & Prosperity sorted the proposals into five new categories that are more descriptive of the likely effects of the policies:

  • Shifting costs to private insurance and employers
  • Shifting costs to federal taxpayers
  • Potentially saving or costing money, depending how the market reacts
  • Cutting payments, with uncertain effects
  • Implementing good (if limited) ideas

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More than half of the savings (53%) will likely shift costs to the private sector, with another 4% shifting to the federal government. Despite the working group’s projections, 27% of the reforms should be considered speculative and might even cost the state money. Another 8% are simply cuts that may have adverse outcomes or fiscal effects. That leaves just 7% of reforms that we would count as plainly good ideas.

The largest example of cost-shifting to the private sector ($15.7 million) is a 5% reduction in hospital payment rates, which hospitals will seek to transfer to others. The policy would give hospitals an opportunity to receive bonuses, but to the extent that they do so, the “savings” will be consumed. The largest proposal to transfer costs to federal taxpayers, at $1.5 million, would “streamlin[e] the application process” to ensure that beneficiaries are counted in the way that will bring the most federal dollars for their care.

With respect to unknowable outcomes, the largest projected savings ($3.3 million each) come from proposals to change the methods and locations of treatment for people who are seriously mentally ill or have complicated cases. Such proposals may or may not save money, and if the providers losing revenue find ways to bring their customer bases back up, the costs could actually increase. The largest outright cut is $6.1 million in increased risk and other agreements the state would force on providers. Meanwhile, the most significant good, if limited, idea is $2.6 million in projected savings from new methods of tracking waste, fraud, and abuse.

In short, the working group’s proposals are a mixed bag. In some cases, it may in fact be more appropriate for costs to be borne by insurance customers and the federal government, and some reforms might be worthwhile despite uncertain outcomes. Hopes for short-term savings, however, should not become an excuse for jumping into reforms, and costs shifted off of the state’s books should not be an excuse for increasing or maintaining other government spending.

To GOVERNOR’S MEDICAID WORKING GROUP: A Proven Policy Idea to Save Money

A proven and bi-partisan cost saving measure that has produced significant savings in other states has been recommended to state officials by the RI Center for Freedom & Prosperity and its national partner, the Foundation for Government Accountability (FGA).

It is well-known that fraud, abuse, and lack of enforcement plague many state and federal welfare programs, often resulting in wasteful spending and a potential lack of funds for the truly needy.

FGA’s recent “Stop the Scam” report discusses how many states are not conducting detailed enough Medicaid eligibility and verification procedures for new and existing enrollees.

From issuing Medicaid and welfare payments to dead people, to lottery winners, to enrollees who did not provide proper documentation, and to people under-reporting their incomes, a process that provides for more detailed screening and periodic check-ups can result in significant cost savings for states.

According to FGA, “Illinois and Pennsylvania instituted proactive audit reforms with bipartisan support, and together they have saved hundreds of millions of dollars. Pennsylvania discovered thousands of ineligible individuals receiving benefits, removing 160,000 individuals in just the first 10 months of the audit, saving $300 million. Illinois quickly followed suit and removed 300,000 individuals in the first year, 400,000 more in the second, with expected taxpayer saving of $350 million per year in Medicaid alone.”

As with many states, Rhode Island has its own screening and verification process. However, according to FGA, rarely do they have the capacity to conduct the deep-diving to search the federal and state databases necessary to root out more subtle cases of ineligibility. 

The Center recommends legislative action or an executive order requiring Rhode Island to utilize third-party vendors that specialize in determining if enrollees have retained eligibility in Medicaid.

A thorough examination of FGA’s recommended “best practices to stop welfare fraud” should be conducted by Rhode Island  health officials to determine if the vendors suggested by FGA may be able to help the state identify additional cases of ineligibility.

Center Issues Statement on Governor’s Proposed Healthcare Tax

Summary: Explanations by the Raimondo administration about the Governor’s proposed surcharge on health insurance premiums appear to be misleading. The truth about the new tax expose four major concerns about how it is NOT comparable to the would-be federal exchange tax.
 
FOR IMMEDIATE RELEASE
March 17, 2015
Truth about the proposed HealthSource RI Tax
Is Not Commensurate in Scope to Federal Exchange Tax:
Tax Base, Tax Levy, Tax Certainty, and Next Steps are Considerably Different

Providence, RI — Explanations by the Raimondo administration about the Governor’s proposed surcharge on health insurance premiums appear to be misleading. Designed to raise money to partially fund continued state operation of the controversial HealthSource RI exchange, the tax is being positioned by administration officials as comparable to the fees that would be charged if the exchange were to be returned to the federal government.

However, as broached in a recent post in The Ocean State Current, there are a number of major differences between the federal tax and Governor Raimondo’s proposed tax:
First, who gets taxed? Under a federally run exchange, only those who purchase a policy through the exchange, or who purchase an identical policy outside of the exchange, would be taxed. But, as the Center has been projecting for years, because of Rhode Island’s small size and low enrollment numbers, not enough revenue can be raised without charging exorbitant per policy fees.
Under Raimondo’s plan to pay for HealthSource RI’s high projected costs, there would be an assessment on ALL individual and small business policies in the state, whether purchased inside or outside of the exchange.
Also of note, vocal special interest groups, such large corporations and union shops, would appear to be exempt from the tax; yet another special interest handout?
Second, how much tax? Under the federal plan, it was estimated that the 3.5% federal rate assessment based on the 30,000 or so who are currently purchasing insurance through the exchange, would result in about $5-6 million in fees. The Governor’s tax is projected to raise an ‘initial’ $6.2 million in half a year, or about $12 million in annual revenues, making it at least twice as expensive for Ocean State policyholders as the federal option.
Additionally, the proposed 3.8% and 1% tax on individuals and small employers, respectively, is significantly higher than similar 1.35% and 2.5%-3% taxes in Connecticut and Massachusetts, which can afford the lower rates, as they can be spread across a significantly higher number of policy holders.
Third, a fixed tax rate? Use of the term ‘initial premium assessment’ indicates a potential slippery slope. In fact, if HealthSource RI’s expenses rise, or when federal funds disappear, the health and human services secretary is empowered to raise rates for this tax in future years, while the federal plan is statutorily fixed.
Fourth, a stepping stone to state control? Maintaining the exchange under state operation also maintains the threat of further state control over Rhode Island’s healthcare industry, with separate legislation in 2014 (H7819) and 2015 (H5387) already seeking to give government unprecedented new powers. A single-payer system, such as that advocated for by the new HealthSource RI Director, has long been a goal of progressive lawmakers. Under a federal exchange, this threat is virtually eliminated

Stenhouse OpEd & Testimony Video re. Bill to Socialize Healthcare in RI (H7819)

 

See related OpEd in the Providence Journal, July 3, 2014