- Associated Press - Tuesday, March 11, 2014

PROVIDENCE, R.I. (AP) - HealthSource RI’s director said Tuesday there’s a “better than 50-50 chance” the health insurance marketplace will be allowed to use federal funds to cover operations into 2015, the year it’s supposed to be self-sufficient.

Director Christine Ferguson told the Senate Finance Committee that conversations are continuing with federal officials about the marketplace’s desire to use existing federal funding beyond year’s end, when it’s supposed to expire.

Under the federal health care overhaul, state-run marketplaces like the one in Rhode Island are supposed to pay for themselves beginning next year.

Ferguson said HealthSource has received $111.5 million in federal grants to date, and $45.7 million of that had been spent as of March 1. Its proposed $23.4 million budget for fiscal 2015 is all federal money and does not identify another revenue source.

Assuming Rhode Island can stretch out its federal money through the first half of next year, the state would then have to figure out how to cover the $23.9 million it’s expected to cost to run HealthSource RI each year. Possible revenue sources are fees on insurance carriers or health plan purchasers or assessments on all claims paid in the state, though business groups want future operations to be funded only by those who use the marketplace.

The 2011 executive order that Gov. Lincoln Chafee signed establishing HealthSource RI prohibits the use of general revenue funds.

Ferguson cited another possibility: the shift to a federal marketplace. More than two dozen states opted not to build their own exchanges.

Several senators questioned whether Rhode Island can afford the marketplace once federal funding dries up and asked what costs the state would be locked into if it were to give up control. Committee Chairman Daniel DaPonte, D-East Providence, said HealthSource has been “dropped on our lap and we’ve got to figure out how to solve it without a Plan B. Taking a $24 million hit is a big number.”

Speaking during a break in the hearing, Ferguson called moving to a federal exchange “inappropriate and shortsighted.”

Earlier Tuesday, HealthSource RI reported enrolling nearly 19,690 individuals in private insurance plans between Oct. 1 and March 8. Of those, 16,345 have paid.

State health officials also reported that the number of Medicaid sign-ups is now 48,602, far above the number expected at this point.

HealthSource RI’s first open enrollment period for individuals and families ends March 31. Small-business and Medicaid enrollments will continue on a rolling basis.

Thirty-one percent of private-plan enrollees are 34 or younger; 29 percent are 55 or older. The vast majority have been eligible to receive some sort of financial assistance to help cover the monthly premium.

It’s not yet clear how many of the new enrollees were previously uninsured.

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