One thing you have to remember about Obamacare is that much of the financial pain, such as steep penalties, is back ended so that by the time people wake up to reality, the law has been operating for years and it’s too late.
Here’s yet another example, the subsidies for state exchanges disappear in 2015, and that’s going to bust state budgets.
My formerly home state of Rhode Island and Providence Plantations is finding out how painful the end of those subsidies will be for HealthSourceRI, via ProJo, HealthSource RI proposes $26 million spending plan:
Rhode Island’s new Obamacare-mandated online health insurance marketplace, which launched Oct. 1, has proposed nearly $26 million in spending for the budget year that starts July 1, 2014.
But HealthSource RI, as it’s officially known, has not proposed how to pay for it once federal money runs out around Jan. 1, 2015.
“There’s nothing that says there won’t be more federal funds coming, but what we know now is that federal funds to date will cover all of the costs of the exchange up until mid-point FY15,” Governor Chafee’s spokeswoman, Christine Hunsinger, said Wednesday. “That’s for certain. It may be longer if we get lucky, get additional money, be efficient and do some other things. But up until mid-point FY15, that’s what we’re looking at.”
Rhode Island received about $84 million in federal grants to design and launch its version of the online insurance hub, which is a central part of President Obama’s health-care law.
But that grant money must be allocated by Jan. 1, 2015. After that, the federal government has said all exchanges must be financially self-sufficient.
Good times, huh? Like a drug dealer giving you drugs on the cheap until you are hooked, and then you’re on your own.
Rhode Island doesn’t have the money. Its budget, sinking under underfunded pension obligations and suffocated by municipal employee unions that run the state, likely will have to raise fees, taxes or some other revenue to pay for the new bureaucracy.
All this as cost projections to run the exchange are rising. Projo continues:
The Chafee administration has asked departments to submit two versions of their budgets: one showing how much it would cost to provide the same level of services and programs as this year (known as a “current services” budget) and another that would reduce that cost by about 7 percent.
HealthSource RI, which falls under the state Department of Administration’s budget, proposed a single version: a $25.8-million spending plan.
The budget is also higher than previous estimates.
HealthSource RI director Christine Ferguson told House lawmakers in September that the exchange could cost between $17.9 million and $23.9 million a year to operate.
John Kostrzewa at ProJo notes the potential impact:
Ferguson has proposed $25.8 million in spending for the exchange for the budget year that starts July 1, 2014, according to a request submitted to Governor Chafee.
But she has not proposed a specific way to pay for it and has not detailed how the operation would be paid for in later years. In effect, there is no clear business plan that any entrepreneur launching a start-up knows he has to have.
Ferguson told the crowd at a recent Publick Occurrences forum that the money to run the exchange in 2015 could come from a range of options, including an assessment on claims or an assessment on premiums paid by participants in the exchange….
Others, including Gary Sasse, former director of the Department of Administration and director of the Hassenfeld Institute for Public Leadership at Bryant University, have criticized the lack of a long-term business plan and the potential, financial impact.
“The exchange was created by executive order which can be changed by the next governor, not a statutory law,” Sasse said, “It does not have an identified permanent source of operating funds which could exceed $20 million annually. One option to fund the exchange on a continuing basis could be an insurance premiums tax which may have an impact on health insurance costs in a very competitive economic environment. Is this any way to make public policy?”
What a creepshow. The American public is being hooked on a plan being implemented without planning which has a timebomb set to expode in 2015.