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May 23, 2008

Update: Medicaid cap plan could affect 186,000+ RIers

PROVIDENCE -- More than 186,000 Rhode Islanders may be affected by a Carcieri administration plan to overhaul the state’s Medicaid system, which includes programs for tens of thousands of elderly, disabled and low-income Rhode Islanders.

But the proposal, which is already being negotiated with federal officials, must survive the General Assembly, which has expressed concern that the ambitious plan may cause a “catastrophe” for the state’s most vulnerable citizens down the road.

A spokesman for the House of Representatives, Larry Berman, said this morning that lawmakers will spend the coming weeks deciding whether to endorse the plan as they craft a state budget for the fiscal year that begins July 1.

“Now it’s just a question of what they’re going to do when the budget is put together,” Berman said this morning. “The budget will probably be released in the next two or three weeks.”

In a series of recent public hearings devoted to the issue, advocates for seniors have warned of waiting lists for the elderly, reduced access to in-home care, and cuts to transportation programs for medical appointments. Parents of disabled children made emotional pleas to lawmakers to block the cap, fearing they’d lose funding for part-time in-home aides. And others fear the move would force lawmakers to cut thousands more off the state’s health-care program for the poor, RIte Care.

“It alarms us to think of frail 80- and 90-year-olds in need of assistance with activities of daily living on waiting lists for care,” said Maureen Maigret, former Department of Elderly Affairs director, and current policy director for the Senior Agenda Coalition.

Administration officials, meanwhile, argue the current system is already facing substantial risk as costs continue to climb and the state’s financial health worsens.

“I understand the risk involved and I understand the concerns of the community, but right now we are past the risk point,” said Gary Alexander, director of the state Department of Human Services. “We may be at a point where, just to balance the budget, we’ll be taking 30,000 to 40,000 people off our current programs for [fiscal year] 2010 because we don’t have any more money.”

Read a description of the Medicaid proposals in Article 19 of the governor's proposed fiscal 2009 budget.

Your turn: In a tight budget year, would you spend tax money to maintain current Medicaid spending on the elderly, poor and disabled?

-- Steve Peoples of the Journal State House Bureau

There are still many questions as to how the Carcieri administration would execute the plan. Details are being ironed out behind closed doors between the state Department of Human Services and the federal Centers for Medicare & Medicaid Services.

But what is clear is that Rhode Island is negotiating something that has never been done in the United States.

The plan calls for Rhode Island to agree to limit spending on all its Medicaid programs -- at a rate yet to be determined for the next five years. In exchange, the Carcieri administration would have greater flexibility to change the programs -- in ways that have yet to be determined, in many cases.

The stakes are high, not only in terms of the people affected, but in the potential impact on the state’s financial health. Rhode Island’s Medicaid spending totaled more than $1.8 billion, one quarter of the total state budget, in fiscal year 2006, the most recent annual data available. (The federal government currently pays 52 cents out of every dollar spent on Rhode Island’s Medicaid program.)

There is concern that the agreement being negotiated, known as a “global waiver,” would lock Rhode Island into spending levels that are based on unrealistic assumptions. If actual costs exceeded the negotiated cap, the state would have no option but to cut people off services or pay for the additional programs on its own without a federal match.

Among the likely changes, the state would set strict new criteria for elderly residents wishing to enter nursing homes (the department has yet to finalize the specific criteria). But, “a second new group of persons with lower care needs, who under today’s standards would be eligible for nursing home care, would now be limited to home and community care services, but they would only get services if funding is available,” Maigret said.

The General Assembly, which largely controls the state budget, has the power to block the plan.

House Finance Committee chairman Steven M. Costantino this week expressed serious concern over the global waiver. “There’s a lot of uncertainty about this. Maybe we need a year. Maybe we need a year to do this global waiver and start working on it where it’s fully flushed out,” he said. “I don’t want to put the state at so much risk that in the third year, we’ve got a major catastrophe for the state of Rhode Island.”

Vermont is the only state to have arranged something close to what the Carcieri administration is seeking.

In 2005, Vermont secured two broad federal Medicaid waivers to restructure its Medicaid program, becoming the first state in the nation to agree to cap its Medicaid spending. In exchange, the state received greater flexibility to use the federal dollars on non-Medicaid health programs and to reduce benefits, increase co-pays and cap enrollment for some programs.

The agreement has worked out well for Vermont so far. But a report issued by the Kaiser Family Foundation in 2006 warns other states of potential risks.

“As a small state that was willing to set the precedent of accepting an aggregate cap on federal Medicaid funds, Vermont secured a relatively generous financing arrangement and significant fiscal relief,” reads the report. “If other states were to seek similar waivers, they would likely receive more limited financing, making it more likely that they would fall short of federal funding and face pressure to reduce coverage.”

Senior advocates such as Maigret generally support the administration’s plans to reduce the dependence of nursing homes in Rhode Island. The global waiver simply isn’t the best way to get there, she said.

“There’s enough uncertainty on this proposal that we can’t tell seniors that they will have access to services they currently have access to,” Maigret said. “A global cap presents risks to the state. It also puts elders at risk for service denials. This is a risk we do not support.”

-- Steve Peoples of the Journal State House Bureau

Posted by Mike McKinney at 11:59 AM | Permalink

Comments

Yow, that is a LONG 39 pages of legislation, too much to digest at a quick run-through. However, this seems to be the gist of it:

1) Cut back medical services for most of us.

2) Don't worry about a thing as long as you are one of the lucky sods (1/6 of the state, so it seems) with a state or municipal pension plan that also includes full medical benefits.

Is that about right?

Not one of the lucky sods | May 23, 2008 5:26 PM link

There are so many pitfalls to this proposed waiver that it is frightening. As the parent of a severely disabled son who relies on Medicaid for his medical coverage and for the services he receives, I think about the cap first and foremost. What will happen in Year 3, or 4 or 5, when expenditures exceeded the estimates? What will happen to those who rely on Medicaid but are told "Sorry, no, more money?" How will eligibility be changed to decrease the number of people who can use Medicaid? As things stand now, Medicaid is elastic, which means whoever is eligible can receive it; the state pays 48% and the federal government pays the other 52%. With the new waiver the state receives a block of money, must make it last for 5 years regardless of the number of eligible people and there is no additional match from the feds. And what will happen to the set aside funds when there is a shortfall elsewhere? What guarantee do we have that the money will remain untouched?
There are ways to reduce Medicaid spending without resorting to this proposed waiver. This waiver is the most extreme proposal in the country. There are other waivers we could use that would not leave the people of RI at such great risk. If OHHS and DHS would be open to including the Medicaid stakeholders in their planning I am sure alternatives could be found.
I want our state legislators to think seriously about the consequences if this waiver is approved.

Pam Goes | May 27, 2008 10:42 AM link

Many people don’t realize that its likely that someone they know relies on Medicaid funded services: the working family next door; the family whose child has a severe disability and who are able to keep their child at home with Medicaid coverage; the man who suffered a traumatic brain injury in a car accident; the elderly neighbor who has a home maker and other services that allow her to stay in her home instead of moving to a nursing home, the friend with a serious mental illness who avoids long stays in a psychiatric hospital because of the community supports provided through Medicaid.

Medicaid is indeed a large part of the state budget – as it is in all states – but the current funding mechanism, through which the federal government more than matches every dollar spent by the state, helps to assure that Rhode Island can meet the health care and long term care needs of its residents. If caseloads rise, the federal government helps to pay the costs.

The 5 year global capped waiver proposed by the Governor would end this partnership. It’s a very risky proposition for the state which could leave seniors, people with disabilities and working families without health coverage or result in cuts in the services that are vital to seniors and people with disabilities. No other state has requested this type of waiver.

The changes the Governor proposes, including “rebalancing” the long term care system to increase home and community based services, can be achieved by other types of waivers or other Medicaid changes that do not put the state at risk.

Advocates, consumers and providers have largely been left out of the process of Medicaid reform and are ready to work with the state to implement necessary changes. Let’s start that process now.

Barbara Kilcup | May 27, 2008 3:43 PM link

Interesting that the previous poster noted that "No other state has requested this type of waiver."

At the base of the Statue of Liberty in New York is the famous line:

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door.

Well, it seems like Rhode Island is about to erect a Statue of Lucre, and if you ain't got it -- well, then, there's the door, buddy, don't let it slam you on the way out.

Who needs federal dollars, anyway? With the rapidly graying America, there are going to be plenty of paying customers for our hospitals without having to resort to filling beds with public welfare cases. We're talkin' REAL MONEY here, not cheap Medicaid reimbursement rates.

Nope, who needs it. Hey, the principality of Monaco is less that one square mile, and they seem to do alright. Why not the Principality of Providence?

Let them eat zeppole | May 27, 2008 7:06 PM link

May 23, 2008

Update: Medicaid cap plan could affect 186,000+ RIers

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