Feds may pay for R.I. Medicaid expansion

By Ted Nesi
PBN Web Editor

WASHINGTON — The federal government would pick up the full cost of expanding Medicaid coverage in Rhode Island for five years under a special provision of the Senate Finance Committee’s health care reform bill.

Increasing the number of Americans eligible for Medicaid, the federal health insurance program for the poor, is a key provision of all the various health bills moving through Congress.

The cost of Medicaid is shared by federal and state government, with the split varying based on a formula. In Rhode Island, the federal government has paid around 52 percent of Medicaid costs in recent years.

The Senate Finance Committee’s bill would expand Medicaid eligibility to anyone whose income falls below 133 percent of the poverty line. Depending on the state, the federal government would pay anywhere from 77 percent to 95 percent of the additional cost.

After the draft legislation was released, however, Senate Majority Leader Harry Reid, D-Nev., complained that the provision still imposed too heavy a burden on his state, Nevada, which has been hit hard by the recession, according to The New York Times.

Reid’s comments led the finance committee’s chairman, U.S. Sen. Max Baucus, D-Mont., to revise the bill last week so that the federal government would pick up 100 percent of the new Medicaid costs in “high-need states” from 2014 through 2018.

The bill defines “high-need states” as those with below-average Medicaid enrollment and unemployment of 12 percent or higher in August 2009. That would apply to just four states: Rhode Island, Nevada, Michigan and Oregon.

In a statement, Baucus’ office said the provision “would provide help for states that will experience a significant increase in Medicaid enrollment due to the size of their current programs and their current rates of unemployment.”

The news comes one day after Gov. Donald L. Carcieri sent a letter to Rhode Island’s congressional delegation expressing concern about the impact the legislation would have on implementation of the Global Medicaid Waiver, a pact that would allow Rhode Island to make major alterations to the program’s operations.

Medicaid “is expensive, provider-centered, inefficient, slow to innovate, and as such, ultimately unsustainable,” Carcieri wrote. “For these reasons, the Medicaid program is hardly the best and by no means the most appropriate platform for expanding health coverage to tens-of-thousands of additional Rhode Islanders and millions of other Americans.”

The number of Rhode Islanders on Medicaid fell by nearly 30 percent from 2006 to 2008, according to the U.S. Census Bureau.

The agency said 156,000 people, or 15 percent of Rhode Island residents, were on Medicaid in 2008, down from 222,000, or 21.1 percent of residents, two years earlier.