Rep. Morgan Introduces Bill to Shut Down HealthSourceRI

Rep. Patricia Morgan has submitted legislation that would discontinue the state’s health benefit’s exchange, HealthSourceRI.

In a statement, Morgan (R-Dist. 26, Coventry, Warwick, West Warwick) said the increasing cost of health insurance “represents a serious threat to Rhode Island’s fiscal health” and the cost of running HealthSourceRI “is too much for Rhode Island’s dwindling coffers.”

Morgan said that although the former director of Healthsource RI did not provide the Finance Committee with a specific cost, the estimated annual price of operating Rhode Island’s separate exchange appears to be approximately $14 to 20 million.

“Do not mistake this spending as the cost of medical coverage. This expense is simply the cost of overhead and administration. These are the staff salaries, phone system, offices, technology, and marketing that combined will cost taxpayers millions each year,” she said. “These are the costs Rhode Islanders have traditionally paid in our premiums. Now, many Rhode Islanders will be paying the administrative costs twice: once for their own coverage through premiums and again for those on Healthsource RI through taxes.”

Morgan added that if the conservative low cost were divided and charged to the 25,200 non-Medicaid enrollees of year one, it would add over $550 to every premium.

“This cost is far more than the federal exchange, which adds approximately 3 percent for overhead in its premiums. We have built an operating model that we simply can’t afford,” explained Morgan.

“The former director of Healthsource RI never determined how to pay for operational costs. Instead, she requested tax dollars, a funding source strictly prohibited in the former governor’s executive order creating the exchange. Alternatively, she proposed that every company in Rhode Island, even if they didn’t use the Exchange, be forced to pay for it. Both suggestions ignore the fact that enrollees can get their insurance coverage on the federal exchange for a substantially lower administrative cost.” Morgan said.

“Adding additional taxes to our already overburdened citizens will continue to hurt both Rhode Island residents and our business community. We need tax relief, not more expense, in order to thrive and create jobs,” continued Morgan. “Thirty-three other states use the Federal Health benefits exchange. It makes the most sense to join them. Taxes and fees afflict all Rhode Islanders; this bill is the medicine that will cure another tax-borne illness.” Morgan said.