Governor Should Tread Slowly on Health Care Exchanges

(see the ProJo OpEd version here)

The Governor’s office should exercise caution and search for answers to important questions before rubber-stamping the health insurance exchange ‘executive order’ recommended by a special panel. President Obama’s controversial Patient Protection and Affordable Care Act (PPACA) “Exchanges” may simply be too risky for RI.

We encourage a serious public debate on this very important issue before bypassing the normal legislative process, which failed to pass related legislation. The debate should focus on whether or not now is the appropriate time to move forward with a PPACA exchange, especially considering the high associated risks and potential alternative paths. Our state has time, and should take the time to act prudently.

The PPACA federal law is unstable, politically and legally. In August, the 11th Circuit Court of Appeals ruled that PPACA exchanges, which would create an individual mandate to purchase health insurance, is unconstitutional. Also, one implication of the recent national debt-ceiling debate may mean that millions or even billions of dollars designated to support PPACA would be at risk if the debt super-committee can’t come up with the required spending cuts.

There are many arguments and questions about why RI should not rush into implementing this controversial system at this time:

  • Federal policy is in a precarious state of flux: The President announced that he favored significant changes to his health care reform, providing even more uncertainty about future changes from Washington. PPACA is also under attack by Congress, with open threats to deny funding or repeal it. There is concern that if RI implements a PPACA exchange that the federal government, would not be able to provide the federal funds that we may anticipate. What happens if PPACA is ruled unconstitutional and we create an exchange, does RI have to assume these cost commitments?
  • Federal health care legislation may be unconstitutional:  PPACA has been ruled unconstitutional by federal courts in Florida and Virginia as well as by the 11th Circuit. This legal uncertainty underscores the danger of RI risking the time, expense, and potential that PPACA could be thrown out as unconstitutional. The US Supreme Court is expected to hear and rule on this case by June of 2012. Also, if a new administration were to be elected later in 2012, it is certain that it would spell doom for PPACA. Recent polls suggest that a 2nd Obama term is anything but guaranteed. Is it sound public policy to push ahead with the Exchange when we don’t know if we can legally require everyone to participate?
  • Impact on businesses. Have we evaluated how businesses will react? I have spoken with many business owners who believe that PPACA will increase premium costs to the point where it may be more prudent for them to dump health coverage for their employees and pay the federal fine. How would this make RI a more competitive state for business?
  • Federal Strings. RI is again chasing federal funds, which bring along a multitude of federal mandates, which, in turn, are highly likely to change … unpredictably so. Just recently PPACA was changed to mandate that all “exchange” insurance policies must now cover birth control contraceptives. And, as recently as April 5, 2011 Congress passed changes that rewrote the way health exchange subsidies will be paid for. Already, the law’s foundation is crumbling among other states: in August, Kansas returned a large federal grant wanting out of the law and its mandates. Why should we race to put RI in the same position?
  • Our state cannot afford to waste time and money on this risky endeavor. With all of the problems our state confronts and the multitude of other reforms we must enact; and when PPACA federal funding may never be provided, and while there is so much legal uncertainty why should we risk wasting critical resources on this issue?
  • Government vs Free Market: the very idea of a government controlled exchange is antithetical to our nation’s historical free-market principles, which is the only proven way to consistently deliver a quality service at the lowest possible rate. A true free-market “is” an exchange in itself! Do we even know if RI’s small risk pool can effectively support an exchange? State’s rights issues also come into play.

Since states are not required to implement an exchange until 2014, why shouldn’t we hold off making these decisions until after the uncertainty around PPACA has played itself out? Dozens of other states have held off.

We all want lower prices for good health insurance. Instead of conforming to a federally controlled system, Rhode Island should consider regional Health Insurance Compacts and expanded Health Savings Accounts, which would allow free-market competition to reduce prices and to provide consumers with more choices. Such compacts would authorize out-of-state insurers to compete for business, in much the same way that we purchase auto and property insurance. These free-market models would create larger markets, more competition, more choices, and lower prices.

Right now, PPACA is a major headache for the Obama administration. Why should we make it Rhode Island’s headache as well?

Mike Stenhouse is CEO of the RI Center for Freedom and Prosperity.

Feds Pick A Loser in Solyndra

We talk often about how it is an infringement on our liberties when government gets in the business of picking “winners”, in other words, spending our tax dollars to assist specific businesses or industries that are friendly to the politicians doling out the money. We call this “crony capitalism” … government helping their corporate friends, at the expense of taxpayers and upsetting the natural competitiveness of the free-market landscape.

In the case of Solyndra, a solar panel maker, which was billed by the President as the shining example of the great potential of the “green” industry, and which was picked to receive $527 MILLION in federal stimulus loans, it appears the government picked a LOSER to be one of its winners. Like many government intiatives … it failed, and is further proof of the failure of the concept of government spending as a potential cure for a struggling economy.

Solyndra has since filed for bankruptcy, shut down its plant, and has laid off 1100 workers. Worse, the FBI has initiated an investigation:

“The FBI raid further underscores that Solyndra was a bad bet from the beginning and put taxpayers at unnecessary risk,” said Reps. Fred Upton (R., Mich.) and Cliff Stearns (R., Fla.) of the House Energy and Commerce Commitee.

Government should not pick winners and losers because the whole practice is a losing proposition and antithetical to free-market principles. When politics interferes with the free-enterprise system, as it did with the mortgage bubble catastrophe, not only our tax-dollars, but our liberties are put at risk.

See Wall Street Journal article …

 

State Pension Reform – RI has a way to go to catch up with other states

In 2010 and 2011 (39) US states enacted some form of public pension reform. Rhode Island is one of those states, but we acted in only one of the measured categories in this report.

Restoring Competitiveness to Rhode Island

Our RI Center for Freedom & Prosperity has a bold, new vision to restore greatness to the Ocean State by making it the most dramatic turn-around state in the nation. In the coming months, our Center for Freedom will release a detailed “Prosperity Agenda” for Rhode Island: a game-changing, new agenda that will return competitiveness to our economic and educational institutions, backed by insightful research.

Commentary by Mike Stenhouse

Rhode Island is a last place team. Remember earlier this year when the Red Sox were in the cellar? In Rhode Island many of our citizens are resigned to doom. In contrast, Red Sox nation was outraged.

If only RI citizens were like Red Sox fans.In the competition for people, wealth and business, our Ocean State simply is not competitive with other states. Yet we find little leadership from our public officials to try to improve our lot and far too few jeers from the public. Many reform advocates debate less important issues. Nobody seems to be focused on winning!

With the recent budget debate and with the current pension debate, we can clearly see why RI never improves its standing.

The recently passed state budget and the pension solutions currently being discussed will only serve to make Rhode Island LESS competitive. We debated balancing our budget and how to raise enough revenues to do so. Now we are debating how to raise enough revenues to pay off our massive unfunded pension liabilities. We debate the merits of trading this tax for that tax. We debate how to keep funding our past promises or how to pass on costs to this group or that group. We keep debating each issue as a one-off item, yet no one is talking about improving our state’s competitiveness, and actually winning again.

And, predictably, we always seem to end up in the same place … last place. Yet there are many who defend the status quo and resist reform.

WE NEED A WINNING STRATEGY. For Rhode Island, that strategy must include a dramatic reduction in taxes along with dramatic reductions in spending. There is no other way to remain competitive.

We all know that RI ranks at or near the bottom in far too many areas when it comes to education and the economy. Our perpetually poor rankings prove the utter failure of the status quo. Yet, we cling to what we know, we put the same players back on the field with the same rules, and we seem pleased with ourselves if we can just figure out how not to appear to worsen the situation.

But we are indeed worsening the situation. We know now that our current oppressive tax and regulatory structure is driving people and wealth out of our state. Recent headlines about our education are equally disturbing. To build a sustainable economy, we need educated, productive citizens and capital. To successfully compete with other states, we need more of both. Maintaining the status quo only means we will continue to hemorrhage even more of these valuable resources.

How would raising taxes on the rich, or on property owners, as many suggest, grow our struggling economy?

Even the Governor half-agreed, stating that raising taxes on the wealthy would cause them to move. True. But we also know that middle-class Rhode Islanders will also migrate to other states if they are over taxed. It’s the same, I would guess, with businesses and consumer purchasing.

Raising taxes – any taxes – in order to balance our budget or pay off unfunded debts will only serve to make us LESS competitive! We will continue to lose citizens and money; and we will squander yet another opportunity to improve our chance of winning. Balancing the budget and paying off debt is the wrong game.

THE GAME SHOULD BE ABOUT HOW TO IMPROVE OUR STATE’S COMPETIVENESS AND HOW TO WIN BACK PEOPLE AND WEALTH!

Were Red Sox fans silent when their team was in last place? Would they be mollified if the team bragged that it balanced its books? Would they really care how much players were paid? Would they be satisfied if we merely shuffled the same old lineup? Would they accept increased ticket prices for a perpetual last place team? These wouldn’t matter much if the team was winning. But this is exactly what our public officials want us to accept … pay more money to remain in the cellar.

In RI, little else should matter unless we grow the economy and reform education for the prosperity of our citizens and the future of our children. The primary standard should be whether or not we are improving our competiveness with other states … not balancing the budget.

As long as we continue to play by rules that decrease our competitiveness and without a clear winning vision from our leadership, RI will continue to be a cellar-dweller. Even if our economy recovers to some small degree, it is likely that other states’ economies will improve even more.

In the sports world, where competition and free market principles mainly prevail, a last place team will embark on a “rebuilding” strategy, where it’s “out with the old” and “in with the new”. This may mean a few years of potential struggle while the “new” strategy takes hold, but when it does, if the plan is designed properly, the situation will improve dramatically.

Trouble is, in Rhode Island, we don’t seem to have many strategic thinkers with the courage to admit that long term reform can only happen with some near term pain. And you won’t hear much from our state’s fans (we the citizens). Nor do we find cutting commentary from the media demanding a better team or an improved standing. Imagine the Boston Globe endorsing a perennial last place Red Sox team that refused make wholesale changes.

Red Sox nation demanded a winner and the Red Sox successfully broke its “curse” by winning two world championships! It took the vision of a young and talented GM. The state of RI must do the same … but we are left to wonder where we will find that kind leadership and that kind of public outrage.

If only we could bring out the Red Sox fan inside each of us!

Our RI Center for Freedom and Prosperity is a “fan” of the state of Rhode Island. We hope you will join in us in refusing to remain silent. Not only do we demand a bold, new ‘winning’ strategy for our state, but we intend to map out the initial cornerstone reforms that should be part of that strategy.

A Tale of Two Shale States

A case study of one state – PA – embracing economic opportunity and providing economic opportunity for its citizens;, while another state – NY – has let environmental politics trump development and job growth, thus taking another byte out of economic liberties for its citizens.

Read the Wall Street Journal article here …

Welfare Calling now FREE in Rhode Island

Welfare or food-stamp recipients in over 20 US states – INCLUDING RHODE ISLAND – are now eligible to receive a FREE cell phone with FREE minutes. Yet another example of the ever-expanding entitlement state mentality, programs like these take a byte of our your economic liberty (by taxing service providers who pass the cost on to you) and takes a byte out of the dignity and independence of the recipients.

If you we really believe that “cell phone ownership is a right”, what comes next? Read the Heritage blog here …

Evergreen turns red!

More proof that government intervention in the economy – especially when advancing a politcal agenda – simply does not work. This bad deal cost our taxpaying neighbors in Massachusetts over $58 MILLION! Another byte out their economic liberties. Click here for the Boston Herald story …