Medicaid growth threat or gain?

Funding for Medicaid, a constantly shifting cost shared by the state and federal governments, is a balancing act state policy analysts say is critical to Rhode Island’s economic health.

In a presentation to the House Finance Committee by state government staff on Feb. 4 about costs for fiscal 2016, shared cost isn’t immediately apparent in the 89 slides, though it is referenced. Providence Business News broke down the data based on enacted fiscal-year budgets from 2010-2015 (see accompanying chart).

Another source, the Rhode Island Annual Medicaid Expenditure Report, completed in July 2014 by the R.I. Executive Office of Health and Human Services, also breaks down the data. State and federal costs as percentages of the total fluctuate between these two sources, though they are in the same range.

Though funding is split between state and federal money, Rhode Island “is typically responsible for just under half of all program expenditures,” the Health and Human Services report states. According to the U.S. Centers for Medicare and Medicaid Services, that is because the federal shares are based in part on per capita income.

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While the average federal percentage is 57 percent, Rhode Island gets less than some other states, recently between 52-56 percent, according to the R.I. Budget Office. The Feb. 4 presentation conservatively put the percentage at 50 for both fiscal 2015 and fiscal 2016.

Gov. Gina M. Raimondo’s administration declined to provide data, but did confirm the budget information. Spokeswoman Marie Aberger said Raimondo is committed to “better care while also controlling costs.”

That control would be administered “creatively” to include cracking down on fraud, improving efficiency, strengthening care and focusing on fiscal discipline, while protecting the neediest recipients, Aberger said.

It’s important Raimondo and legislative leaders succeed, says Gary Sasse, founding director of Bryant University’s Hassenfeld Institute for Public Leadership.

Medicaid expansion authorized by the Affordable Care Act is fully funded by the federal government through calendar year 2016. After that the federal share is decreased until it reaches 90 percent in 2020 and beyond, which raises concerns for Sasse.

“Medicaid spending will crowd out state spending for education and workforce training so necessary for economic development, if the Raimondo administration does not propose an aggressive cost-containment program,” Sasse said in an email.

Jennifer L. Wood, HHS deputy secretary and general counsel, counters that the Medicaid expansion will actually push the federal match higher going forward.

Linda Katz, policy director for the Economic Policy Institute in Providence, agrees with Wood.

“More states are taking up this option and the money they get from the federal government is too important to the states’ economies,” she said. “It not only helps residents; it helps hospitals [and] people in the service economy who don’t have company health insurance.” n

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