Health Care News (Heartland Institute), May 1, 2009

With his state among those facing growing budget crises due in part to unfunded health care liabilities, Rhode Island Gov. Don Carcieri (R) is asking the federal government for the freedom to reform the state’s Medicaid program.

Carcieri’s proposal, which was blocked for much of 2008 by the Democrat-led state legislature, involves rewriting the Medicaid payment contract between the federal government and the state.

Under the program as currently structured, federal taxpayers are responsible for about 57 percent of every Medicaid dollar spent on Rhode Island enrollees. Carcieri has requested from the federal Centers for Medicare and Medicaid Services a “global Medicaid waiver,” which would allow him to make broad changes to the state’s Medicaid program in exchange for a cap on spending of $12.4 billion annually through 2013.

Waiver Proposal ‘Gutsy’

“Gov. Carcieri is not a career politician but a successful business leader who ran for public office to make a contribution in his home state,” said John R. Graham, director of health care studies at the San Francisco-based Pacific Research Institute.

“I suspect that he is amazed that career politicians [were] blocking his proposal to protect both Rhode Island and U.S. taxpayers in exchange for increasing local autonomy over the state’s Medicaid program,” Graham said.

If Carcieri is successful in making his state’s Medicaid program less costly and more effective, he could be blazing a trail for other states to reform their health care programs for seniors and the poor.

“I think this may be the most interesting—and certainly the gutsiest—waiver program out there,” said Kevin Wrege, president of PULSE Issues & Advocacy, a health care policy organization based in Washington, DC. “If they receive the waiver, keep an eye out for how Rhode Island tackles long-term care costs, which are the fastest-growing component of almost every state’s Medicaid budget.”

2008 Delaying Effort Costly

The state legislature’s effort to delay Carcieri’s waiver request “cost state taxpayers $54 million according to state health and human services,” said Graham.

“While the governors of New York and New Jersey, to name the two most egregious offenders, never cease in their appeals that Congress raid the American taxpayer again and again to bail out their out-of-control Medicaid programs, Carcieri is courageously taking steps to protect both state taxpayers and Medicaid patients,” Graham added.

Thomas Cheplick (thomascheplick@yahoo.com) writes from Massachusetts.