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Chafee proposes cutting Medicaid

Obamacare will fully fund Medicaid for new enrollees over the first two years of implementation

Gov. Lincoln Chafee ’75 P’14 P’17 proposed cutting $43 million from the state’s Medicaid program as part of a plan to resolve a projected $150 million budget deficit, according to the budget briefing on the governor’s website. The Medicaid proposal represents the only cut of more than $10 million in Chafee’s proposed 2015 budget.

The proposed 2015 budget is projected to have a surplus of $400,000. If approved, the state will have recorded five consecutive years of budget surplus at the end of fiscal year 2014.

The Medicaid cuts correlate to the large percentage of the budget allocated to the state’s Health and Human Services department, said Thomas Mullaney, executive director of the Rhode Island Budget Office. “The Governor’s priorities in the past couple of years have been to education … If you can’t make a reduction in that part of the budget, then you have to look in other parts,” he said.

Chafee approved a proposal by the Executive Office of Health and Human Services that will save $8.2 million by providing managed care for high-utilizers — individuals who require either high-cost or frequent use of health care — and “ensure that they get the highest level of care coordination and care management,” said Deborah Florio, an administrator at the Center for Child and Family Health, a part of the state’s Executive Office of Health and Human Services. Patients under managed care programs will receive just the amount of care they need by coordinating with providers and patients to prevent excessive use, she said.

Under the Affordable Care Act, the federal government will fully fund care for newly eligible Medicaid beneficiaries but will only match the state’s Medicaid funding dollar-by-dollar for people already enrolled, Florio said.

It was expected that 23,000-25,000 newly eligible beneficiaries would enroll by June 2014, but as of Feb. 4 more than 30,000 individuals had already enrolled , she added. The federal funding for newly eligible Medicaid enrollees will decrease to 95 percent of the cost of care by 2017 and 90 percent by 2020.

The state has not adjusted the budget for inflation or for the rising cost of care for three out of the past four years, said Virginia Burke, president and CEO of the Rhode Island Health Care Association, a group that lobbies on behalf of long-term care facilities.

“Hospitals did not get their usual, customary inflation,” Florio said, adding, “We’re cutting on the provider side. We’re not cutting people out of the program. We’re not really cutting services. We’re cutting how much people are getting reimbursed.”

“It gets harder and harder every year … we still do a good job. We still score highly on the national report,” Burke said.

“Facilities are putting off capital improvements and … the people who are doing the really hard work … of personal care in nursing facilities aren’t getting the resources they need” because of the cuts, she said.

Rhode Island’s Medicaid program and RIte Care — the state’s child health insurance program — are ranked among the top ten Medicaid health plans in the country, Florio said.

“We actually have the opportunity to get them healthier over these two years, while the feds are paying for it,” Florio said of Medicaid enrollees. Though it will be expensive to process and provide newly insured individuals with the initial care they need, the state can use the two years of full federal funding to reduce the costs of future care, Florio said. “I think at the end of the day, we’ll have some really good stuff to show and I think we’ll have a healthier state.”


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