Raimondo’s Slippery Facts, HealthSource Edition


Among the more aggravating of Democrat Governor Gina Raimondo’s self-promotional spin is her use of selective employment numbers to paint a false picture, for reasons I’ve explained before.  So, when she appeared on 10 News Conference with Bill Rappleye and proclaimed that ObamaCare “is working in Rhode Island,” I expected something of the same technique.

Sure enough, while Rappleye did a good job pushing back on her nationally driven talking points, when she declared that premiums on Rhode Island’s ObamaCare health benefits exchange, HealthSource RI, were actually falling, she got away with it.  Rappleye looked a little surprised, but comparing premiums is complicated, so he’d have had to have memorized very complicated data in order to have a comeback.  When the governor states something authoritatively, people are still inclined not to assume she’s being deceptive unless they can back up the statement on the spot.

She’s being deceptive.

In the current year, HealthSource plans are pretty evenly split between Blue Cross Blue Shield and Neighborhood, and 70% of all plans are in the “silver” category, so let’s limit our research to that range.  Doing so, we see that, yes, as was reported in October, Neighborhood’s silver plans’ premiums dropped around 6% from the prior year.  However, most Blue Cross silver plans went up more than 7%.

Moreover, Neighborhood jacked up its maximum out-of-pocket requirements 9% for the Value plan and 19% for the Community plan, which also saw a 4% increase in deductible.  So, while a 40-year-old with an individual Community plan will save just under $200 in premiums for the year, he or she will have to pay another $100 in deductibles and has to cover an extra $750 in maximum out-of-pocket expenses.  (This could be a really big deal if ObamaCare participants tend to be higher-cost customers.)

The numbers become more exaggerated if we go back to the 2014 plans.  Since then, two silver Blue Cross plans have survived, as has the Neighborhood Value plan.  Here again, yes, Neighborhood Value premiums are down about 12%, but Blue Cross premiums are up 7% for one plan and 22% for another, and Blue Cross deductibles are up 50% for the plan that saw the smaller premium increase.  Meanwhile, maximum out-of-pocket expenses are up for all plans: 7.5% for the Blue Cross plans and 43% for Neighborhood Value.   So, again, that 40-year-old Neighborhood customer is saving $416 in premiums, but has to pay a maximum out of pocket of $2,150 more.

That brings us to the kickers in the governor’s assertion that ObamaCare is “working.”  We learned two very interesting things about Neighborhood’s premiums back when everybody was distracted with the historic election season.

First, because Rhode Island’s response to ObamaCare had essentially transformed Neighborhood from a quasi-public Medicaid provider into a private insurance company, it didn’t have the corporate experience to estimate its costs, and it greatly overcharged its customers.  That meant (1) it scammed the federal government out of tax subsidies, (2) it had to refund money to plan members, and (3) it could lower its prices.

Second, HealthSource rejected two plans from Neighborhood that would have been even lower cost, because that would have reduced the amount of federal subsidies available to other HealthSource customers.  Raimondo can talk about “bending the cost curve,” but when it came down to it, her health benefits exchange refused to let it bend enough to stop scamming the federal government for subsidies.

This isn’t a picture of something that’s “working.”  With Neighborhood dropping its rates while Blue Cross raises them, we can be sure the near-parity between the two won’t last long… and it would be even more dramatic if the state had let Neighborhood provide customers with lower-cost options that many people, presumably, would want.

And that’s without even getting into the fact that HealthSource is shrinking, rather than growing, in large part because the Medicaid expansion is drawing paying HealthSource customers into a welfare program.

Even if she weren’t so obviously echoing the talking points required by her out-of-state donors, Governor Raimondo has proven that one can’t take her statements of fact at face value, and to use her own phrasing, it hurts Rhode Island families.

  • Winter Solstice

    Ms Raimondo’s “spin” thrives on a citizenry that is not as well informed about issues that they need to be and a media who also lacks knowledge about more complicated issues and/or who choose, for whatever reason, not to respectfully, persistently challenge the Governor. What is the likelihood that you, Mr. Katz, will get to interview the Governor about these issues ?

  • paxmaker

    This bit of clever mixing of apple and orange facts is the same that was employed by Raimondo when she said that the COLA for existent retirees could not be afforded, The gross impact of cola’s on annual distributions was about 2.8% or .29% of pension fund principal. The principal was formulated to grow at @7%/yr (too high…should be closer to 6%), which would mean if the benefit was financed properly as calculated by actuaries, COLA’s would be a smaller and smaller part of the principal over the years. The truth? For the ten years before the pension reform legislation, active pension fund members were not contributing enough nor was the state. Raimondo couldn’t buck the unions, so she convinced ENGAGE RI and the General Assembly and the PROJO, that taking COLA’s from current non organized retirees and beneficiaries was the “fair thing to do,” taking no cost pension money out of the RI economy to the tune of a quarter billion dollars.” so she could fund her hedge fund friends who lost another half a billion dollars. Slick, But lies and she could care less, like she does about abortions. Her health care data gymnastics could readily qualify for a felony in a court of law, if we had an alert and investigative press.

  • Monique Chartier

    Great analysis, Justin. Very disturbing that RI Governor is promoting one very narrow, small positive aspect of HealthSourceRI while disregarding the much bigger picture of higher out of pocket expenses and deductables – not to mention the inexorable, significant rise of both premiums and deductables in private sector insurance, to the point that tens of thousands of Rhode Islanders and millions of Americans now have Potemkin rather than real health insurance coverage.