Mike Stenhouse: Court ruling dooms HealthSource RI

Originally Published in the Providence Journal: http://www.providencejournal.com/article/20150707/OPINION/150709689/13831

The jig should be up for HealthSource RI. In 2014 the state’s insurance exchange, with its high cost of annual operation, was saved by last-minute funding from the federal government. This year the exchange was saved because of concerns about the then-pending U.S. Supreme Court case as to whether federal subsidies would be preserved in federally-run state exchanges. It has been continually argued that the exchange was worthy of state spending because it would reduce premium costs.

Now, none of these justifications are valid. By upholding the Affordable Care Act (ACA) in June, the Supreme Court has eliminated concern about subsidies. And, federal funding is no longer available. Finally, given that a June 26 report notes that insurance rates could rise by as much as 18 percent next year, HealthSource RI has obviously not fulfilled its promise to control rate increases.

So, Rhode Islanders must now decide if taxpayers and policyholders should fund yet another big-government boondoggle that is not working. House Speaker Nicholas Mattiello was correct in insisting that the exchange cut its bloated budget; even still, why should Rhode Islanders pay for an inefficient bureaucracy when a less costly federal alternative is available, one that will not harm anyone in the process? Clearly, the feds can realize “efficiencies of scale” to run the exchange at a much lower cost than we could ever hope to achieve on our own here in Rhode Island.

With our state economy still in a shambles and with every budget dollar needed for repairs to bridges and roads, how can we justify spending on HealthSource RI? More disturbingly, there’s another even more dangerous agenda in play.

In 2014, there was a legislative effort to socialize virtually all of our state’s health-care industry — private and public — under the government’s exchange. This would have led to price controls and health-care rationing. Plus, the new director of HealthSource RI attempted, but failed, to advance a similar scheme in Vermont. Does anyone really trust our state government to run a major portion of our economy? Does anyone not believe that this effort will be revived by the progressive left?

Rhode Island is one of just 15 states that fully funded its own insurance exchange — and it did so by Gov. Lincoln Chafee’s executive order, after the General Assembly rejected the idea. As our center has researched, the Ocean State does not have a large enough tax or insurance base to justify its high operational costs.

More importantly, the free-market system must be preserved in Rhode Island. It is only open competition that can produce the affordable, high-quality health insurance that all Rhode Islanders desire. By eliminating costly insurance mandates and by allowing inter-state insurance sales, premiums can be dramatically reduced, making it far less costly when we choose to subsidize insurance for the neediest among us. 

It is time for lawmakers to save money for Rhode Islanders. We should join the vast majority of other states and let the feds run their own mandated ACA program.


Mike Stenhouse is CEO for the Rhode Island Center for Freedom & Prosperity, a free-market research and advocacy organization.

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