Spotlight on the Statehouse: March 17, 2015

Metro Editor
Tuesday, March 17, 2015

Medicaid faces funding cuts, becomes subject of political drama

Gov. Gina Raimondo included $46 million in “placeholder” cuts to the state’s Medicaid program in her proposed budget, released March 12, in addition to $45 million in cuts to hospitals and nursing homes. Before releasing the budget, Speaker of the House Nicholas Mattiello, D-Cranston, told Raimondo in a private meeting that he would not accept unspecified cuts in any programs in her budget, the Providence Journal reported Feb. 25.

Mattiello told Raimondo that the cuts were politically infeasible during a nearly two-hour meeting that Raimondo called for in the wake of her political gaffe at Politico’s fifth annual “State Solutions Conference” Feb. 20. During a question-and-answer session, she said “the governor proposes a budget and then the General Assembly takes the budget and — often in the dark of night, in a quiet room — the lobbyists and the General Assembly get together and they hack it up every which way and out pops a budget.”

Raimondo delivered on her promise of transparency by posting her breakdown of state dollars on

Though Raimondo made a point to thank members of the General Assembly for their help with the budget in her State of the State address March 12, and included a tax exemption for social security income that Mattiello has been gunning for since last year, the Medicaid cuts remain a sticking point for many General Assembly members.

The cuts remain unspecified as a result of the status of Raimondo’s working group to reform Medicaid, which will not deliver its recommendations to Secretary of the Executive Offices of Health and Human Services Elizabeth Roberts ’78 until April 30. Executive Order 15-08 created the working group and appointed Ira Wilson, professor of health services, policy and practice and chair of the department, as co-chair Feb. 26.

In addition to going against the requests of General Assembly leadership, the cuts also squeeze Rhode Island’s hospitals and nursing homes. By cutting reimbursements and also supporting hiking minimum wage to $10.10 per hour, Raimondo’s vision puts pressure on hospitals and long-term care facilities which may result in layoffs, RIPR reported. Hospitals employ over 50,000 Rhode Islanders — about 5 percent of the total population.

HealthSource R.I.’s future uncertain

The debate over the future of HealthSource R.I., the state-based exchange for health insurance mandated by the Affordable Care Act, has intensified in light of recent developments on the national stage.

Raimondo campaigned on keeping the exchange but trimming its budget, while neither Mattiello nor Senate President Teresa Paiva Weed, D-Newport, have taken firm stands.

The U.S. Supreme Court began hearing oral arguments March 4 during King v. Burwell — a case challenging the validity of health insurance tax cuts in the states that use the federal exchange The case could result in citizens of states using the federal exchange becoming ineligible for tax credits on their health insurance. With the outcome of the case unknown, abandoning the state exchange poses a risk of losing the tax credits it guarantees.

Raimondo also buried the method of payment for maintaining the exchange by not mentioning it in any of her budget summaries and fact sheets. But in the proposed budget, all premiums of health plans purchased in the state — roughly 123,000 — would be taxed at a rate of 3.8 percent for individuals and 1 percent for small employers.

There is currently no maximum value for the tax, which the Secretary of the Executive Offices of Health and Human Services will set.

The tax would account for $6.2 million of the $30.9 million that the Governor’s Office wants to allocate to keep the exchange running, the Providence Journal reported. It is unclear where funds for the rest of the budget will come from. HealthSource R.I.’s operating budget for this year is $23.4 million.

Hearings on the budget proposal will begin the week of March 23.

R.I. unemployment number drops

The state’s unemployment rate hit 6.5 percent in January, its lowest point since February 2008, RIPR reported. Rhode Island’s unemployment rate remains slightly above the national average, which is currently 5.7 percent.

Raimondo’s budget proposal focuses on revamping the state’s economy in a number of ways, including attracting small businesses and investors to the state. In a speech at a union headquarters, she also heralded boosting the minimum wage to $10.10 per hour.

The state’s minimum wage jumped to $9 per hour beginning in January 2015.

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