Governor Proposes Cutting Medicaid Funding, Not Recipients

Jan 18, 2018


Governor Gina Raimondo has proposed cutting more than $70 million in state funding for Medicaid, the government health insurance for low-income residents, while preserving eligibility for the nearly one in three residents in the program.

The proposed spending plan released Thursday would freeze hospitals’ Medicaid reimbursements rates and eliminate about $14 million in payments for hospital stays covered by Medicaid. The payments help offset the lower reimbursements hospitals receive for Medicaid patients.


The elimination of the payments would mean a $6 million loss to Lifespan, the state's largest health system. The biggest chunk of the payments -- $4 million -- goes to Rhode Island Hospital. David Levesque, a Lifespan spokesman, declined to comment on the cuts, saying in an e-mail, “We  recently received the governor’s budget and will comment once we have had an opportunity to review it in detail.”


The governor’s budget also would charge Medicaid patients fees, or co-payments, ranging from $2.50 for generic prescription drugs to $8 for “non-emergency” visits to hospital emergency rooms. The co-payments are aimed at discouraging patients from seeking costly emergency room care that they could get in a doctor’s offices or urgent care center.  According to the governor’s office, 24 other states, including Massachusetts, already charge such co-payments.

“What’s very good is that the budget does not propose any rollback in eligibility in the Medicaid program, and that’s critical,’’ said Linda Katz, policy director for The Economic Progress Institute. But she said imposing co-payments on low-income residents is problematic.

“Research tells us that even nominal co-pays for some very low income people can result in people not using services,’’ Katz said. “So a $3 copay for a sick visit to a doctor could interfere with the individuals getting care in a prompt manner.”

The governor’s budget for the fiscal year that begins July 1st would shrink the overall Medicaid budget by $165.6 million -- including state revenues of $70 million, said Brenna McCabe, a spokeswoman for the state Department of Administration. The balance, she said, includes reductions in federal funding.

Raimondo’s spending plan also assumes the federal government will reauthorize the federal Children’s Health Insurance Program, or CHIP, which would provide the state with another $28.5 million.

The governor is proposing to increase spending on treatment for opioid addiction, with $1 million to expand mental health care and provide job training for people in recovery.

State Senator Josh Miller, chairman of the Senate Health and Human Services Committee, said that’s good as far as it goes.

“This is a problem that kills hundreds of people every year and there are thousands of people every year that either are addicted and trying to get help or become addicted and need help or become addicted and need help,’’ Miller said. “The amount that’s being budgeted is incentive for expanding programs rather than enough to address the population that it’s looking to service.

The governor also is proposing to raise $5.1 million in revenues by expanding the medical marijuana program. The governor would authorize 12 new compassion centers where patients can purchase the drug -- and expand eligibility for medical marijuana to patients with acute pain. Patients from Connecticut and Massachusetts also would be allowed to buy medical marijuana in Rhode Island.


Updated 11:30 a.m.