Rhode Island's Medicaid Proposal Could Set Dangerous Precedent for Other States

On August 8, Rhode Island's Republican governor Donald Carcieri submitted a proposal to the Centers for Medicare and Medicaid Services (CMS) for permission to radically transform the state's Medicaid program. Essentially, the state is asking that its program be turned into a block grant program reminiscent of Bush administration's proposals for Medicaid in 2003.

If the proposal is approved, warns the Center on Budget and Policy Priorities, it could "set a national precedent" that would affect low-income people in other states, including the elderly and disabled, who rely on Medicaid to obtain needed health care.

Under Rhode Island's proposal, dubbed the Global Consumer Choice Compact Waiver, for five years the state would receive an annual federal block grant of a fixed amount and would limit its own Medicaid spending to a constant share of the state budget. In exchange, the state would gain the freedom to alter Medicaid eligibility and services as it sees fit and as budget requirements dictate.

By the state's own estimates, combined state and federal expenditures would fall far short of projected needs, with the gap growing from $231 million in 2009 to nearly $500 million in fiscal 2013. Rhode Island proposes to make up this gap primarily by requiring more elderly and disabled long-term care patients to accept home- and community-based care rather than nursing home care. But the state would also cut back eligibility and services to groups of recipients in ways that are impossible under the current cost-sharing framework. "This would be especially perilous for Medicaid's so-called 'optional beneficiaries' " says the Center, "people whose incomes are modestly above those of the 'mandatory beneficiaries' whom federal law requires states to cover." In Rhode Island, this would include many seniors and people with disabilities with incomes between 74 and 100 percent of the poverty line.

Among other changes, Rhode Island wants to alter the way long-term care is provided. Three categories of need for long-term services would be established, and only individuals who are at the highest level of need would be guaranteed any form of long-term care. The rest, including some eligible for nursing home care under the state's current program, could be put on a waiting list.

Key Congressional Democrats have expressed concern about the proposal.

"Medicaid provides a federal guarantee of health benefits for those in need, and that guarantee cannot be negotiated away through secret pacts between the Bush Administration and Governors seeking to cut Medicaid," Sen. John D. Rockefeller (D-WV) said in a statement.

The Washington Post reports that a CMS spokesman said only that the Bush administration was negotiating with the state "to reach agreement on an approvable proposal."

Rhode Island's waiver proposal and related materials can be found at http://www.eohhs.ri.gov/medicaid/index.php#waiver

For the Center on Budget and Policy Priorities' analysis of the proposal, click here.

For a recent New York Times editorial on Rhode Island's proposal, titled "Gambling With Medicaid,"