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When being number one hurts


Businesses large and small are worried. Too many are surviving, but not thriving. East year about this time they get the quote from their health insurance coverage and each year it worries them more. With increases of 15 percent to 22 percent, they simply can't squeeze the additional cash out of their budget anymore. An easy, short term answer to soaring healthcare costs is to reduce the number of mandates.


Businesses large and small in Rhode Island are worried.   Not only has the recession knocked the stuffing out of them, the truth is that the slowdown in economic activity is persisting here much longer and harder than in neighboring states.  Our employers have had fewer customers coming in the door and when they do come, they have been spending less.   Each owner or manager has had to look through every expenditure and operation and find efficiencies.  Too many are surviving, but not thriving.

Each year about this time they get the quote for their health insurance coverage and each year it worries them more.   Ominously, this year I have heard several managers worry that they will have to lay off workers because their insurance costs are climbing too steeply.   With increases of 15% to 22% they simply can’t squeeze the additional cash out of their budget anymore.  

This is bad news for an unemployment rate that is persistently in the 10-11% range.   It is disastrous news for folks struggling to find a new job and pay their mortgage.   We are going in the wrong direction.  Our employers need some relief and they need it now.  

Rhode Island health insurance has the dubious distinction of containing the largest number of mandates in the country.  That’s right; we’re Number 1.   But this is the wrong list to be first on.  We have 70.  The national average is 43.   Obviously, to insure the health and well-being of our citizens, core services are indispensible.  There is a basic package of medical services and treatments that must be provided to keep us well and heal us.   However, the legislature has gone far beyond that basic package and added coverages that, while nice, are not necessarily essential.   When benefits were added to the list, we heard the argument that they only added a little bit to every premium.  However, each one adds cost.  While most add 1% or less, invitro fertilization alone adds 3-5% to our health insurance premiums.  Unfortunately, as we well know, pennies become dollars, and dollars grow into serious cash.   And now those premiums are affecting the health of business and government budgets.  They are causing layoffs and cuts in service.

We understand that each mandate has developed a constituency; people who use it and like to have the free services.  But the question has to be asked, is it ‘nice’ to have or vital to our citizens’ health? We can’t strangle our job market with ‘nice’ any longer.  We no longer have that choice. 

With the imposition of the Affordable Care Act it is even more critical that we act to slim down our list of mandates to an essential package.   First, the ACA removes all spending limits that might currently be placed on a mandate.   Conceivably, a patient could opt to indefinitely repeat an optional treatment like smoking cessation or invitro fertilization treatments, regardless of success or failure.   Of even more concern is that in 2014 the federal government is expected to release a federal package.   Any mandates that we have in excess of the federal list will be the financial responsibility of our state. With a list that has 27 more than the average, what’s your guess that we will have extra?  Those benefits will not be eligible for federal subsidies.  Taxes would explode to cover the costs. 

Many think that the Supreme Court will overturn the Affordable Care Act.   We can’t count on that and even if they do, with our job climate presently in the basement, we need to get serious about making it easier for companies to come here, to grow here and to thrive here. 
An easy, short term answer to soaring healthcare costs is to reduce the number of mandates.  That’s why we introduced a bill to create a commission that would devise a package of essential health benefits.   Let’s cut the fluff, construct a core of vital services and go from number 1 to average.   In this case middle of the pack is where we want to be.   Our existing businesses will have a breather.  It will help each and every one of us by cutting our personal healthcare premium, as well.   Reducing our mandates from number one to the national average could reduce our premiums by 10 to 15%.   

That’s a huge weight off each of us and off of our economy.  Companies looking to relocate will take notice. 

(Patricia L. Morgan is the Republican State Representative from District 26, West Warwick, Coventry, Warwick.)​

Op-Ed By

By Rep. Patricia L. Morgan


Created at 1/20/2014 7:18 AM by spadmin
Last modified at 1/20/2014 7:18 AM by spadmin