State could lose $78.5M over the next five years
Thousands of Rhode Islanders could lose their health insurance, and hospitals, health centers, nursing homes and others in the health care system could lose millions of dollars, if Congress approves cuts to Medicaid proposed by the U.S. House and Senate Budget Committees.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
That was the warning from U.S. Sen. Jack Reed, health care leaders and several advocacy groups last week, as the Senate was about to begin debating the budget.
Both the House and Senate plans would cut about $15 billion from the Medicaid and State Children’s Health Insurance Program (SCHIP) over the next five years, half the $7.6 billion that the Congressional Budget Office has estimated that President Bush’s budget would cut.
If Rhode Island’s funding were cut in proportion to its current share of federal Medicaid money, it would lose $78.5 million over the next five years, not counting a $17 million cut due to a change in the funding formula this year. The state’s 2005 Medicaid budget is $1.66 billion.
About 22 percent of Rhode Island’s Medicaid funds go to RIte Care, the managed care program for children and families; one-third to disabled adults, and just over one-quarter to the elderly.
Hospitals get about 14 percent of Rhode Island’s Medicaid funds (not counting RIte Care payments), both for services they’ve provided, and to compensate facilities such as Rhode Island Hospital for treating a “disproportionate share” of poor patients.
Through RIte Care, Medicaid is also a major source of revenue for local health centers, making up nearly half of Thundermist Health Center’s 2004 revenue, for example. And more than one-eighth of Medicaid dollars go to pharmacies.
Just what could be cut is still unclear, but many in Rhode Island fear that the state’s generous use of Medicaid could come back to bite it now. (As of 2001, Rhode Island had the second-highest per capita Medicaid expenditure rate in the nation, second only to New York.)
One proposal being floated in Washington would turn Medicaid into block grants, with less money available overall. And some Republicans have said they want to stem what they call overly “creative” uses of Medicaid by some states to extend insurance coverage to “optional” populations – an assertion that could be applied to Rhode Island’s coverage of disabled adults, children with special needs, and all but the poorest children and families.
“I’m very fearful that this will be a horrific situation for the states in terms of capping or block-granting Medicaid,” said state Rep. Steven A. Costantino (D-Providence), chairman of the House Finance Committee and a key player in health care issues.
Almost one-fifth of Rhode Islanders get Medicaid benefits, including about 125,500 children and parents; 2,300 children in foster care; 9,500 children with special health needs; 26,000 adults with disabilities; and 19,000 seniors. RIte Care in particular is credited for giving the state the lowest rate of uninsured children in the nation.
A new analysis from the state Department of Health’s Office of Health Statistics suggests Latinos could stand to lose the most if RIte Care had to be cut back. From 1997-98 to 2002-03, the analysis shows, Latinos’ reliance on public health insurance grew by 10.4 percentage points, mostly offsetting a 12.5-percentage point drop in employer-sponsored health coverage.
RIte Care also saved many of the poorest Rhode Islanders from becoming uninsured: while 15.4 percent of families earning less than $25,000 a year lost their employer coverage, 15 percent were able to get government coverage.
At a news conference at the Allen Berry Health Center, part of the Providence Community Health Centers network, Reed called the cuts Congress is considering “wrongheaded and very dangerous,” and he made it clear that Rhode Island is in particular peril.
“I’m afraid one of the first places they’re going to look are states like Rhode Island,” Reed said.
The state has been “very forward-thinking,” he added, and its efforts to cover children are “something to be proud of,” but if the current proposals prevail, “they could send thousands of Rhode Islanders back to being uninsured.”
Reed is proposing to hold off on Medicaid cuts this year and instead set up a bipartisan commission to study “what works and what doesn’t work in Medicaid” nationwide.
