Feds commit to support HealthSource, but R.I. must pay some as well

HealthSource RI, Rhode Island’s state-run health insurance exchange, will seek $4.6 million from the state government for fiscal year 2015, Executive Director Christine Ferguson said Thursday. More

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Feds commit to support HealthSource, but R.I. must pay some as well

HEALTHSOURCE RI EXECUTIVE DIRECTOR Christine Ferguson says that the health benefits exchange needs $4.6 million in state money in fiscal year 2015 in order to draw out federal funding that would cover the rest of the agency's costs for the period.
Posted 5/22/14

PROVIDENCE – HealthSource RI, Rhode Island’s state-run health insurance exchange, will seek $4.6 million from the state government for fiscal year 2015, Executive Director Christine Ferguson said Thursday.

The $4.6 million represents roughly 8.4 percent of HealthSource RI’s total fiscal year 2015 budget of $55 million. The remaining $50.4 million will be supplied by the federal government.

Gov. Lincoln D. Chafee did not include any state funding for HealthSource RI in the proposed $8.5 billion budget he submitted in February. Ferguson said the governor excluded a state funding estimate from the budget due to ongoing discussions with federal regulators about whether HealthSource RI would receive federal funding for the second half of the fiscal year.

In addition, although the Affordable Care Act requires state exchanges to be self-sustaining by Jan. 1, 2015 (the middle of fiscal 2015), the federal government has agreed to cover the majority of HealthSource RI costs through the end of calendar year 2015, but required that the state show “some indication” that it is committed to maintaining the state-run exchange, Ferguson said in a Thursday phone interview with Providence Business News.

Critics of the state exchange, including the Rhode Island Center for Freedom & Prosperity, responded to Ferguson’s statement with a renewed call for the state government to turn over control of the exchange to the federal government.

Turning over the exchange to federal control would mean the individuals and businesses with fewer than 50 employees who purchase health insurance in Rhode Island would be required to pay a 1.9 percent fee to the federal government support the exchange in 2016, regardless of whether their plans were purchased through the exchange or not, Ferguson said.

The HealthSource director said the decision to transition to a federally run exchange would be “tantamount to an agreement to impose a premium tax on small businesses and individuals,” and would also mean surrendering all state control over the exchange.

If HealthSource RI remains a state-run exchange, she said, a similar fee could be instituted but it would likely be lower and the state would be able to seek public-private partnerships to defray the costs of the exchange.

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