Paiva Weed: Keep HealthSource RI state-run

Speaker Mattiello: 'Truth be told, I'm informed it's not as good as we think it is'

Rhode Island Senate President Teresa Paiva Weed lowers the gavel in the Senate Chamber of the Statehouse, in Providence, R.I., Tuesday, July 2, 2013. (AP Photo/Steven Senne)

PROVIDENCE, R.I. (WPRI) – Senate President M. Teresa Paiva Weed said Wednesday she thinks Rhode Island should continue to operate HealthSource RI, its state-run Obamacare health insurance marketplace, but with a significantly smaller operating budget.

“I do support the exchange at the state level,” Paiva Weed said during a panel at the Greater Providence Chamber of Commerce’s annual legislative luncheon. She later reiterated, “I lean towards supporting it.”

Rhode Island is one of 13 states that set up its own entirely state-run marketplace to help residents purchase insurance and receive federal subsidies under President Obama’s Affordable Care Act. Former Gov. Lincoln Chafee created HealthSource RI by executive order in 2011 after lawmakers left the issue unresolved.

But with most states using the federal marketplace – and HealthSource RI seeking an annual state-funded operating budget of roughly $20 million once federal startup funding runs out – a debate has heated up about whether Rhode Island should abandon HealthSource altogether and switch to the federal system.

Paiva Weed, a Newport Democrat who has led the Senate since late 2008, is known as a strong supporter of social-services programs. But she emphasized at the Chamber luncheon that HealthSource RI will need to get by on a much smaller budget as Rhode Island faces growing deficits.

“I do believe that the exchange can be trimmed down without jeopardizing its core mission,” she said, suggesting its spending should be reduced “significantly.”

Paiva Weed expressed dismay that “a tremendous amount of money has been spent on marketing” by HealthSource RI, and also argued the agency should stop spending money on a call center to assist residents seeking insurance. As of last March the federal government had awarded HealthSource RI $111.5 million to get up and running, with another $51 million expected.

New Gov. Gina Raimondo, also a Democrat, has similarly argued HealthSource RI should remain state-run but operate with a smaller budget. Raimondo has already replaced Christine Ferguson, the exchange’s founding executive director, with consultant Anya Rader Wallack.

Raimondo is expected to unveil her first state budget proposal by March 12, but she has not indicated how much money she will include to fund HealthSource RI, or how the funding will be generated.

House Speaker Nicholas Mattiello, D-Cranston, has been more skeptical of HealthSource RI than Paiva Weed or Raimondo. “At the very least, it’s got to be trimmed down,” he said at the Chamber event. “But I have not made my mind up on if we’re going to keep it in the state.”

Mattiello also took issue with the conventional wisdom in Rhode Island policy circles that HealthSource RI has executed its core mission successfully despite questions about its cost.

“Truth be told, I’m informed it’s not as good as we think it is,” he said. “There are a lot of problems with the exchange. We’ve spent too much money on it, it’s too big, it’s too inefficient.”

“It should be no more expensive than it would cost us to have the federal government do it,” he added.

Wallack, the new HealthSource RI executive director, acknowledged in a recent interview with Eyewitness News that the exchange has problems.

“When I came through the door three weeks ago, it was apparent to me right away that we had some customer service issues,” Wallack said. She put some of the blame on HealthSource RI’s complicated information-technology infrastructure.

House Minority Leader Brian Newberry, R-North Smithfield, argued Rhode Island never should have created its own exchange in the first place, and noted that the state’s final decision may hinge on the outcome of a U.S. Supreme Court case on the legality of the federal exchange. That decision is expected by late June.

“At what cost are we helping people out?” Newberry asked.

A total of 28,787 Rhode Islanders have used HealthSource RI to sign up for insurance so far in 2015, including 8,547 new customers, the agency reported Wednesday. The annual open enrollment period for individuals ends Sunday.

Ted Nesi ( covers politics and the economy for and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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