Rhode Island became the first state to gain control of its Medicaid program last month when the General Assembly approved an unprecedented deal between Governor Donald Carcieri '65 and the Bush administration. The Medicaid waiver provides the state with greater flexibility in exchange for a cap on federal funding for the program.
"The waiver takes (Medicaid) out of the federal bureaucracy and gives the state the ability to run it itself," said Amy Kemp, Carcieri's press secretary.
Medicaid is a federal aid program which pays for medical care for low-income families and individuals.
Before the waiver was passed, the state had little say in how Medicaid operated, and the federal government contributed just over fifty cents for every dollar spent by the state on Medicaid. With the waiver, the federal government's spending will be capped at $12 billion over the next five years in exchange for fuller state control of the program.
The rising costs and inefficiencies within the program made an overhaul necessary, Kemp said, calling the expenses "unsustainable."
The waiver will help decrease the costs of the program, Kemp said. Rhode Island will be able to cut costs by sending fewer people to long-term care facilities and obtaining better prices for medication and medical services, she added.
Previously, Medicaid did not pay for home care, so an elderly person in need of additional care had no choice but to move into a nursing home, Kemp said.
Allowing able individuals to be cared for at home is "much more cost-effective," she said, but added that no one will be forced to leave his or her institutional facilities under the waiver.
Mary Linn Hamilton, president of the Visiting Nurse Association of Rhode Island, said her organization supports the waiver, adding that if possible, "everyone would prefer to be taken care of at home."
Steve DeToy, director of Government and Public Affairs for the Rhode Island Medical Society, said his organization supports the flexibility of the plan but is concerned about the spending cap.
"Giving elderly, disabled people and others the opportunity to have a more appropriate site for their care is what we need to do," he said.
"We didn't need to take the cap in order to get the waivers we needed."
If the need for Medicaid funding exceeds the $12 billion allocated by the federal government, the state will either have to find additional funding or cut the number of people on Medicaid by adjusting eligibility requirements.
"When the federal money runs out, the state will be responsible for the Medicaid costs and more than likely they will start decimating the entire Medicaid system," DeToy said. "That is what we're most fearful about."
Edward Miller, assistant professor of Public Policy, Political Science and Community Health, said the waiver was risky in light of the economic downturn.
Noting Rhode Island's high unemployment, Miller said, "People lose their jobs and they lose their income, so there might be a growing demand for people to be on Medicaid."
"This could become something, I think, that would come back to bite them in the rear end down the road," he said.
Kemp said the state is "very, very comfortable" with the agreement to cap federal spending.
Though the waiver has gone into effect, it could take some time for issues of oversight and implementation to be addressed, she said.
"In general, the assembly does not act very quickly," DeToy said. "I'm a little fearful that they swing the pendulum a little too far and create a bottleneck in the state's ability to keep making the changes necessary in a timely fashion."
The Providence Journal reported Monday that the governor didn't yet have enough personnel, including long term care specialists, nurses, case workers and implementation aids, to move forward with the changes to Medicaid.
While Hamilton is concerned about the state's ability "to manage and efficiently execute the waiver," she remains positive. "I think it's a really good opportunity for the state of Rhode Island to do really new and different things to provide services and stay cost effective."
