The budget is a moral document
The discussion was about the catastrophic impact HR1 (Donald
Trump’s “big beautiful bill) will have on low- and middle-income Rhode
Islanders, and the massive impacts of federal cuts to Medicaid, health insurance premiums,
and food assistance. It wasn’t all doom and gloom. Senator Kallman and Nina
Harrison have presented bills currently before the Rhode Island General
Assembly that could help mitigate the impending catastrophe.
Nina Harrison
I’m the policy director at the Economic Progress Institute.
The Economic Progress Institute is a nonprofit that does policy research and
advocacy in Rhode Island. We try to get laws passed that benefit low- and
modest-income Rhode Islanders, improve racial equity in the state, and give
people a chance at economic opportunity. I am also the co-chair of the Protect Our Healthcare Coalition,
which I co-lead with Shamus Durac from RIPIN, a huge resource in the state that
advocates for children with disabilities.
I’m told that you all basically know how things work at the
State House, that people like Senator Kallman are there in the evenings, at
committee hearings, hearing testimony on bills. I’m often there giving
testimony and saying, “Please pass this bill, or please don’t pass this other
bill.”
I’m going to start by talking about what happened over the
summer, which some of you may have heard Trump talking about: one big,
beautiful bill, which is not beautiful, especially for Rhode Islanders, that
essentially cut more than a trillion dollars in funding for Medicaid and SNAP over
10 years. And they did that to pay for tax breaks for the richest people in
America. Because of the tax break Trump made permanent over the summer, the
highest-income earners are getting an average tax break of $58, 000 this year.
We’re losing healthcare and food assistance, but the highest
income earners are getting a $58, 000 a piece tax break this year.
What does that mean for Rhode Island? It means that unless
the state takes action, 53, 000 people will lose healthcare. That’s not my
stat; that’s a statistic from the state itself. About 33,000 people are
expected to lose Medicaid coverage. Medicaid is for people who are low-income,
typically 138% or less of the federal poverty line, which is already too low.
Low-income people will be losing healthcare, and many of them will also be newly subject to work requirements. Many of them are already working, and if you’ve been here for some of the mess-ups the state has made, you know how easy it is to mess things up when new administrative rules are in place. More frequent recertification means that instead of recertifying Medicaid once a year, you’ll now do it every six months. That’s more opportunities to make mistakes, which makes it easier for people who are eligible to lose benefits or give up dealing with the BS of trying to meet all these administrative hurdles.
20,000 people will lose health insurance through HealthSource RI. That is our state
marketplace. If you are earning too much to qualify for Medicaid, but you work
for yourself or a small business, and your employer doesn’t offer health
insurance, you have to purchase it for yourself through HealthSource RI. There
are only about 40-45,000 people purchasing insurance through HealthSource RI,
and 20,000 will lose their health insurance through HealthSource RI. Remember
when they shut down the government recently? That shutdown was because Affordable
Care Act subsidies had been in place, helping people afford health
insurance through HealthSource RI, and Congress allowed those to expire at the
end of 2025. That government shutdown was about congressional Democrats saying,
“We’re going to shut this down until you agree to extend those healthcare
subsidies that were helping people buy health insurance.” It didn’t work,
unfortunately. Those subsidies expired, resulting in everyone’s premiums going
up this year, especially for people on HealthSource RI: those 40,000 Rhode
Islanders saw their premiums double on average because they no longer had those
subsidies.
HR1 also targets many lawfully present immigrants. People
who are here with full legitimate status will no longer be eligible for
Medicaid and SNAP in certain instances. We eliminated eligibility for full
groups of lawfully present immigrants, and that is what makes up the 53,000
Rhode Islanders who are going to lose healthcare and rely on SNAP; up to 14,000
Rhode Islanders could lose SNAP benefits. 2,300 lawfully present immigrants
will definitely lose SNAP benefits. What does that mean? Just the healthcare
insurance issue alone could overwhelm our healthcare system because when people
don’t have insurance, what happens if they get sick? They have to go to the
emergency room.
Even if you think, “I don’t have Medicaid” or ”I don’t
purchase through HealthSource RI,“ do you ever need to go to the emergency
room? Emergency rooms could see their wait times significantly increase due to
our uninsured population. Essentially, our uninsured population in the state
will double.
Many of you may know that our state already had some
healthcare challenges before this one big, beautiful bill. One of the
healthcare challenges we’re facing is a shortage of primary care doctors in the
state. Anchor Medical just closed, and I lost my doctor. That is largely
because one-third of the state’s residents access healthcare through Medicaid,
and we don’t pay doctors who provide care to Medicaid patients at the same
rates as Massachusetts or Connecticut do. If a doctor is deciding where to live,
there are many financial reasons to choose to live and practice elsewhere. And
that goes for pediatricians as well, especially those coming right out of
school.
I’ve heard doctors testify, “I can’t advise anybody to come
work here because I can’t afford to pay my loans.” That’s part of the issue
with the primary care shortage. Last year, the General Assembly passed
legislation to increase Medicaid reimbursement rates, hoping it would help
attract more primary care doctors, but we need more than that. Another issue is
that we only have one medical school. When people graduate from Brown Medical
School, only a certain number want to be primary care doctors or pediatricians,
and not all want to stay in Rhode Island, especially given the financial
constraints. I’m not going to get into all of that, but there are proposals,
and I know that people in the General Assembly are very concerned about
addressing this.
You may have heard that Fatima and Roger
Williams Hospital were
just in danger of closing, and I couldn’t tell you what saved them,
that’s not my expertise, but I can tell you that if hospitals have to provide
more and more care for people without insurance, more and more hospitals will
be at risk of closure because they can’t afford to provide that kind of care
without getting reimbursed.
Additionally, we have a rapidly aging population, and as
some of you may know, there’s a shortage of healthcare workers in home care,
community care, and at nursing homes, able to meet the needs we have right now,
never mind that our population is aging very rapidly.
These are all things that we need to address to make sure
that our healthcare system doesn’t fall off the cliff. The solutions cost
money, and unfortunately, we don’t have it right now. As I mentioned, the
federal government cut funding for our state and all states. I want to put into
perspective just how much money our state is going to miss. First, we are
facing a $100 million budget gap. That’s not including HR1, one big, beautiful
bill problems. That’s to do what we were already planning to do and run the
programs that are already running. We are running a $100 million budget
deficit. That’s up to people in the General Assembly to figure out how to do.
How can we rearrange the budget, or which programs will they
cut, to bridge the budget gap? That’s one piece. That’s $100 million we need to
make up. Then we get into what the federal government cut from Rhode Island.
This is kind of confusing because many of the provisions in HR1 have different
implementation timelines. SNAP cuts are starting now. Medicaid cuts and work
requirements are starting later, like in January of 2027. The bottom line, once
fully implemented by fiscal year 2028, is that we will lose almost $400 million
in combined state and federal Medicaid funds. I’m including the state because
the federal government provides funding for Medicaid, but the state has to pay
some of it as well. If the federal government says you have to kick 30,000 people
off Medicaid, then the state is technically saving money on the portion it
would have paid for those 30,000 people who use Medicaid.
One solution we’re offering is, instead of thinking of that
as savings, invest that money into the healthcare system, so that people can go
to free clinics and hospitals and get care and not just emergency care. They
need to create a system to continue prescriptions and dialysis because right
now, uncompensated care is only required to be provided in the emergency room.
That’s not sustainable without investment from the state. The federal
government used to pay for all of SNAP (food assistance). They used to foot the
whole bill, but now they’re saying the states have to pay some administrative
costs, and depending on your error rate and how they distribute payments, you
will have to pay a penalty. At the bare minimum, we’ll have to pay a $15
million in administrative fees, but more than likely we’ll have to pay the full
penalty of $65 million to operate SNAP as it exists.
That’s roughly $450 million in costs from Medicaid and SNAP
alone. That’s not even factoring in that they eliminated or let expire those
subsidies that help people purchase insurance through HealthSource RI. That’s
another $60 million. That’s what it will cost to replace those: Let’s say a
total cost of about $500 million, and that’s a conservative estimate. It
doesn’t include the $100 million budget deficit needed to keep the status quo.
Now, solutions: First, we need funding to pay for some of
the solutions, and as I just mentioned, we don’t have it. The top solution that
I’m pushing and a coalition is advocating for is, since the richest people in
the state and in the country just got this huge tax break, and that tax break
is permanently in our tax code, we should tax the top 1% of income earners in
Rhode Island, which would raise $203 million a year.
It wouldn’t raise $500 million, but we could essentially
plug some of the holes left by this deep pocket of federal funding that’s going
to be missing. I want to be clear that the top 1% are people earning more than
$640,000 a year. We don’t want to change anything about how the first 640,000
is taxed. Leave it alone, that’s fine. This would only be a new tax on income
above $640,000. Somebody making $750,000 a year would pay $3,300 in additional
taxes if this proposal were to pass. They’d still be getting a $58,000 tax
break from the federal government. They’d still be better off than they were
before.
That’s the pitch. It would affect 6,100 tax filers or
households, and it would again raise $203 million every year. That would likely
go up as people’s incomes go up.
Now, on to what I hope the money will be used for: plugging
these holes and preventing our healthcare system from falling off a cliff. The
first is the Rhode Island Marketplace Affordability Act, which would replace
subsidies for the 40,000 Rhode Islanders who purchase health insurance through
Health Source RI. It would cost $60 million and bring everybody’s premiums
down. I mentioned that those premiums doubled. It would bring at least 13,000
people back into insurance coverage, since that’s the number we anticipate
leaving due to unaffordability. You might think that’s not a huge impact, but
when healthy people leave the insurance pool, the people who are left paying
for insurance are sicker, and sicker people cost more to insure. That’s why
health insurance rises for all of us when people leave the health insurance
pool.
The second healthcare solution is the Protect
Our Healthcare Act, which takes those Medicaid “savings” and invests in
uncompensated care; in fact, it doubles it. We’re saying to invest $109 million
in uncompensated care, not only to support existing uncompensated care but to
expand it so people can get prescriptions, dialysis, and other services beyond
emergency services, so our hospitals and community health clinics can keep
their doors open.
Those are my solutions and top priorities this year: raise
revenue, replace the healthcare subsidies that Congress allowed to expire by
creating our own state program, and invest in uncompensated care, that is,
don’t think of this as Medicaid savings, double it and invest it in
uncompensated care.
We have a better chance than we’ve ever had before for the
tax the rich bill. For the two healthcare bills, they’re both new because these
are new problems. We didn’t have this big, beautiful bill two years ago.
There’s a chance that there will be a partial replacement of healthcare
dollars, and I’m optimistic because that is in the governor’s proposed budget.
It is much less expensive than the full $60 million cost of replacing it for
just the lowest-income half of people, because the subsidies they receive are
much smaller. I’m more optimistic about that. For the uncompensated care bill,
we’re asking for a lot of money. Asking for $109 million a year in this kind of
budget climate is the kind of thing that some legislators would balk at and
say, “You must be crazy. Don’t you know what we’re dealing with?” But again, I
know they’re concerned about healthcare. I have seen a smaller proposal from
the governor of about maybe $10 million for uncompensated care, but that’s a
drop in the bucket.
I hope that, at a minimum, the state will invest what they
would normally spend on Medicaid anyway, even though we’re asking them to
double it, and think that still wouldn’t be enough.
Senator Meghan Kallman:
One of the things that we need to get used to is the idea
that government exists to help people thrive. Saving money for its own sake
does not serve anyone. It doesn’t serve anyone in the community. And we have to
wisely steward our resources, especially when the federal government is taking
a lot of them to give to billionaires, but I fundamentally take issue with this
idea, which seems to be like a very common framing in parts of the state, that
saving money equals a better outcome. Spending money on people’s well-being is
why we exist. We’re facing a very aggressive environment, and we need to use
our resources wisely and nimbly, but there’s no point in saving money. We exist
to help Rhode Islanders thrive.
I don’t tend to carry a lot of the healthcare bills that are
specifically designated for healthcare. I tend to carry the wealth tax and
housing bills because health is, in large part, dependent on having a safe and
affordable place to live. But I’m going to talk about some additional
revenue-generating ideas, because in my view, it’s like both/and. Very rich
people should be paying more than they are currently paying. That is absolutely
true, but you know who else should be paying taxes? Corporations, and especially
tech corporations.
I’m talking here like the Metas of the world. I’m carrying a
bill this year called the Digital Ads Tax, which is designed to tax
digital ad revenue because it lives in this funny place where it’s not a good
or a service and has somehow evaded taxation in the tax code. Facebook, Meta,
and X, or whatever, have a lot of money, and they have been beneficiaries of
some lopsided federal policy-making that privileges tech industries. This bill
is modeled on something they did in Maryland. It is still ensnared in some
legal challenges, but we are confident those challenges will be resolved in our
favor, which is why I felt comfortable introducing the bill this year.
A digital ads tax has a couple of benefits. One, it does not
tax people; it taxes corporations. Two, it has the potential to generate a lot
of money because you’re taxing the global revenues of these companies. It’s a
proposal I am excited about because it also begins to balance some of the
policies that have privileged large corporate entities over our local entities.
The other is the Fair
Share Agenda, a [wealth] tax on financial instruments, things like
capital gains, stock trading, et cetera. People who earn more than a certain
amount of money from sources like capital gains pay a slightly higher tax rate
on that income. The idea is that those sources of income tend to be the purview
of people who have more resources, and if we put a threshold on it, it’s not
going to affect somebody who put their pension into investments or put some of
their retirement savings into investments and then pulled it back out again. It
is again aimed at the folks at the top of the income scale who generate a lot
of money by trading that way.
Those are two economic justice proposals that I would say
are designed, among other things, to plug some gaps in the healthcare system.
One success story: For several years, I carried a bill
called the Taylor Swift Tax, which finally passed last year as part
of the budget. The idea with the Taylor Swift tax is that people like Taylor
Swift, who own like seven homes, would pay an additional tax on second homes -
not your primary residence - but second homes that are valued at more than a
million dollars. who is rich enough to have not one but two homes valued at
more than a million dollars. Just rich people, like Taylor Swift, among others.
Everybody was, “Oh, the sky’s going to fall, and people are going to leave Rhode
Island.” Of course, that didn’t happen. I got three cranky phone calls from one
guy in California who was like, “How dare you? “ And I was like, “You know
what? You’re in California. I’m not going to bother.” That has been bringing
money in.
Imagine if we had a top 1% tax, coupled with the Taylor
Swift tax, coupled with a digital ads tax. Together, those are different ways
to address some of the inequities in what’s going on federally.
Rhode Island is not going to be able to, over the long term,
balance out a lopsided federal tax code by itself. We’re not going to. We’re
going to have to fix that, which will involve changing how things are at the
federal level, so Federal elections remain important. But in the short term, we
can take care of ourselves. We have to sort of find the oomph to do it. Nina
said the 1% tax would affect 6,300 people. In my district, I represent about
48,000 people, which means that no single person could lose an election based
on the number of top 1% earners. Even if all of those people in the state were
angry and were going to vote against somebody, you still couldn’t lose an
election over it. It’s not that many people.
I kept hoping Taylor Swift would call me and say, “I’ll do a
press conference with you.” Didn’t get there. I know people did call her office
asking for comment, but we never heard a complaint from her. I want to think
that that’s a tacit endorsement because she knows she has more than enough
money to pay Rhode Island. It was something like $38,000 on her property, chump
change for her.
Anyway, the point is that we have done this before. We did
it last year. The world didn’t end, and we’ve been making some more Rhode
Islanders whole with a more equitable tax code. I believe we can do not just
this, but a series of these things this year. Seven or eight proposals are
floating around, some of which are interlocking, some of which are
simultaneous, some of which are slightly different. But the point is we have
choices about how we make our budget more just and more whole because, and I say
this all the time, a budget is a moral document. It is a statement of our
values. And when our budget does not include support for people who are the
lowest-income earners or the most medically vulnerable, that is a reflection of
the values that we collectively are holding as a state.
I want to briefly detour into the political advocacy process
because each of you has a senator and a representative. One of the many
wonderful things about Rhode Island is that we are teeny tiny, which means that
you are probably no more than a 10-minute drive from your local elected
official. And while I certainly endorse sending them emails, asking for a
meeting is way better. We are a part-time legislature, as I think most of you
know. I’m a professor for my day job, a sociologist, but when I meet people in
the community who show up caring about something, you can’t help but pay extra
attention. I am out in the community most nights of the week. I think many of
my colleagues are out and about quite a lot, too, but your senator and
representative should get right back to you, and they should offer you a time
to meet if that’s what you ask for.
There’s no reason to accept representation from someone who
does not make themselves available. We’re a small community. I often wind up
consulting experts in the community because I don’t have a full-time staff. I
frequently call my friends who are researchers or experts in it about this.
Knowing who is in the community, you all can become a source of information. A
couple of years ago, I met a woman when I was door-knocking, a primary care
physician in the Providence part of my district. I represent about half the
city of Patuckett and a chunk of Providence near Miriam Hospital on the East
Side.
She said, “ I’m a primary care physician. What do you know
about the availability of FDA-approved contraception?” And I said, “I know that
it’s available.” And she said, “Right, but here’s what I want to do. I want to
change it so it’s not just doctors who can prescribe this. I want to change it
so pharmacists can prescribe it too. I have such a backlog of patients right
now, so frequently, when someone makes an appointment to see me to get
contraception, I can’t see them for six months. They’re already pregnant by the
time they get there; they don’t want to be. We should have other people in the
community with prescribing authority for something that’s already approved
federally. This isn’t experimental stuff. This is just your pharmacist who
knows their stuff about medicine.”
And I said, “Great idea.” She connected me with a local
public health pharmacist advocacy group, and I carried that bill. Now, in Rhode
Island, pharmacists can not only prescribe contraception, but they can also
prescribe PEP and PrEP, which are the HIV prophylactics. That’s just an example
of knocking on the doors, and somebody saying, “You could do this better.” And
I was like: “Turns out you’re right, tell me what you know.” When we hook up
together like that, things can change. And again, that’s one of the benefits of
being a small state here. Her name is Dr. Mindy Sobota. Through
that, I met a bunch of folks who are involved in public health pharmacy.
The point is that we are a well-networked, well-connected
state, and these problems are solvable with the resources we have. Yes, we
should raise a lot of money, and our healthcare system is really not in very
good shape. About three years ago, I joined a conversation at a conference with
several other state legislators from mostly up and down the East Coast, and
everyone was like, “Oh my God, this healthcare system is a disaster.” And we
were like, “We’ve been meeting on and off for about three years to talk about
the possibility of single payer, but there are a couple of problems with single
payer as it’s been envisioned.
One is that the federal government is not going to do that
anytime soon. That’s the biggest problem. It’s a considerable one. But the
other one is that individual states adopting single payer is not particularly
realistic because you need a large enough pool of insured people to spread the
risk. The economics don’t work, and especially not in a place like Rhode
Island, where there’s like a million and change of us. We’re too small, and
half of us work in other states. It’s a whole thing. At this conference, the
idea emerged: What would happen if we had a regional single payer consortium, a
couple of different states linking up together to try to figure out how many of
us we would need, what sort of population threshold you would need to create a
single payer system that is regional and would be the building blocks towards a
national system?
This year, I have a bill that would do that, a regional
single-payer bill. To be totally clear, I don’t expect this bill to pass. We’re
not equipped to have it pass. It is designed to start a conversation amongst
colleagues in different parts of New England about what it would take to put
together a system like this. There are several challenges this would face. One
is the possible preemption laws. If we tried to do this, what would the federal
response be? Could we preempt that? Could we figure out what they would say and
what our legal structures should be? Second, we have private
equity in healthcare. To the extent that we have private equity in
healthcare, we are going to run into some real challenges in regionalizing a
public system. The idea of bringing a bill forward is to have some of those
conversations in a more systematic way.
Shortly before I came in, I had a call with a colleague in
Massachusetts who is also carrying a single-payer bill there. We’re convening
some conversations. We’re going to try to do a New England study commission to
get some actual data about what this would look like. I think this is worth
doing, even though there will be big hurdles, but there will be big hurdles if
we do it nationally. And the question of private equity is one we also need to
address, not just in healthcare but in everything.
Steve was asking me right before I got on stage here about a
bill I just released that would prevent private equity from owning any real
estate above the $25 million threshold, and I already had the landlords jumping
down my throat about that. The irony there is that I don’t think any of them
would ever reach $25 million. This is aimed at large corporate landlords who
tend not to be very good actors. Boston and Massachusetts have seen a lot of
this: you often have foreign investors buying property, and sometimes they’ll
sit on empty properties to drive prices up. You have people living on the
streets, a massive housing crisis, and investors sitting on whole empty
buildings. When you have the parallel version of that in the health insurance
industry, that is the problem we’re also going to have to tackle head-on.
What I’m trying to communicate is that this is a time when
we need to consider many different solutions. A necessary, foundational step to
any solution is figuring out how to raise money in a just way, because it has
been the bottom and middle classes that get squeezed... We’re not going to be
able to fix our healthcare system unless we are at least taking some of the
inequities out of the taxation system. And the benefit of a better tax system
is that we can actually fund a lot of things, like public transit, and, I don’t
know, housing and healthy school meals for everybody.
Again, the point of government is to help people thrive. Saving money is not a virtue unto itself. Helping people thrive is what we’re here to do - at least, it’s what I’m here to do, and I’m privileged and pleased to be able to do it in conversation with folks at the EPI, like Nina. We have a really small but mighty crew of excellent organizers in this state.
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