Rhode Island Proposal To Cap Medicaid Spending

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The AP/Washington Times on Sunday examined a proposal by Rhode Island Gov. Donald Carcieri (R) to cap Medicaid spending in exchange for broader authority in deciding how Medicaid funds can be used. Carcieri has said the state needs approval of a federal waiver because Medicaid will consume about 30% of the state's budget by 2011, leaving less money for other priorities, but some federal lawmakers have criticized the plan (AP/Washington Times, 10/19).

Under the waiver, the governor would agree to limit Medicaid spending to $12.4 billion through 2013. State Department of Human Services Associate Director Murray Blitzer said that if the state runs out of its allotted funds before the five-year mark it will lose matching federal funds, which would force the state to pay the program's full cost or cut services. In exchange for capping spending, the state would receive broad authority to change services, such as nursing home care, subsidized transportation for the elderly and beneficiaries with disabilities, health insurance for low-income children and parents, and prescription drug coverage for seniors. If approved, the waiver is expected to save the state an estimated $67 million this year (Kaiser Daily Health Policy Report, 9/17).

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Sen. Sheldon Whitehouse (D-R.I.), Senate Finance Committee Chair Max Baucus (D-Mont.), and Subcommittee on Health Care Chair John Rockefeller (D-W.Va.) in a joint letter questioned the legality of the proposal, criticized it for shifting costs to the federal government and opposed plans to increase beneficiaries' copayments and create waiting lists for long-term care facilities. Whitehouse in a recent interview said, "While Rhode Island talks a good game about reducing costs, there isn't much in the way of infrastructure to suggest they can actually turn the talk into reality."

Judith Solomon, a senior fellow at the Center on Budget and Policy Priorities, said Carcieri's proposal would set a "dangerous precedent" and projected that it would leave the state $1.6 billion short of estimated Medicaid needs. She said a budget shortfall could prompt lawmakers to reduce benefits, "endangering the idea of having a program where those who are eligible get benefits," which is the "fundamental nature of the Medicaid program" (AP/Washington Times, 10/19).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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