Medicaid Block Grants Work

In its final days, the Bush Administration granted Rhode Island a block grant — essentially a waiver allowing the state increased flexibility from federal Medicaid regulations in return for a cap on federal expenditures. An analysis by Rhode Island’s former secretary of Health and Human Services illustrates how a block grant reduced yearly spending growth by half other states. In the process medical services delivered to the needy improved.

At the time of the waiver Rhode Island’s Medicaid program was hemorrhaging dollars. [I]ts costs were growing by 7.6% annually, and more than a quarter of the state budget went to pay these medical bills. Since the waiver, the state’s official Medicaid documents show that costs rose an average of only 1.3% a year from 2009-2012 — far below the 4.6% rate in the other 49 states.

Two provisions in particular saved money: reduced use of the emergency room for privacy care and home-care subsidies as an alternative to nursing home care.

Comments (15)

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  1. Buster says:

    The article went on to say that the Obama Administration is probably not going to renew this waiver without a fight. The current governor inherited the program from the previous republican governor. The current governor is competing for the Democratic nomination and may not be willing to invest enough political capital to continue the program.

    • Jack says:

      This is ridiculous. If it works, it works.

      • Levin says:

        The two party system completely corrodes any type of progress because people are so worried about getting re-elected.

        • Boswell says:

          Especially in this situation, if you are in leadership in a state you should leave your party affiliations behind and enact policy on strictly a cost benefit paradigm.

          • Bosh says:

            You see that would work except for lobbyists etc, and they have no incentive too reject their party affiliation it makes them rich.

  2. Blaine says:

    “At the time of the waiver Rhode Island’s Medicaid program was hemorrhaging dollars. [I]ts costs were growing by 7.6% annually, and more than a quarter of the state budget went to pay these medical bills. Since the waiver, the state’s official Medicaid documents show that costs rose an average of only 1.3% a year from 2009-2012 — far below the 4.6% rate in the other 49 states.”

    We need to do more than this.

  3. John Fembup says:

    “how a block grant reduced yearly spending growth by half . . . medical services delivered to the needy improved.”

    Unfortunately, that’s looking at the results from the wrong end of the telescope. It’s not the way the federales look at it.

    When viewed correctly one sees that block grants didn’t work; don’t work; and can’t work. That’s because they transfer power from the federales to the states.

    That won’t be permitted to continue.

  4. JD says:

    Block grants are a step in right direction. Gradual increases in freedom will get us there, kind of like what the left has been doing with socialism for over 100 years.

    • Dewaine says:

      Like Fabian Socialism?

      • JD says:

        Exactly. It has proven their most effective strategy. Americans don’t even realize all the freedom that they’ve lost.

        • Dewaine says:

          So, the reverse would be “Americans don’t even realize all the freedom that they’ve gained”?

          I don’t like that our kids wouldn’t recognize the gains, but I guess that is better than not having gains at all.

          • JD says:

            We have to try to keep the struggle bloodless while increasing freedom.

            • Dewaine says:

              Right. Violence is not only dangerous to people, but also to the movement. Rarely are the ideals of a movement maintained throughout and beyond a violent period.