The Wall Street Journal editorialized today that the federal waiver under which Rhode Island operates its Medicaid program is a “case study” of the potential benefits of converting Medicaid to a block grant. Hardly.
As we’ve written, the waiver was actually a sweetheart deal between the outgoing Bush Administration and Rhode Island’s Republican governor. No state would get that deal today: the waiver gives the state more federal funding than it would have received under normal program rules. Normally, block grant proposals are designed to shrink deficits by giving states less federal funding and by shifting financial risk and costs to the states.
Several reforms that Rhode Island has instituted under the waiver, like moving seniors and people with disabilities from nursing homes to the community and getting the best possible price for medical services and supplies, are certainly worth supporting. But many states are moving in that direction without a cap on their federal funds, as in the Rhode Island waiver.
And whereas Rhode Island is free to end the waiver with six months’ notice to the federal government, there would be no turning back for states if Congress were to convert Medicaid to a block grant. States should think twice before risking the health of vulnerable seniors, people with disabilities, children, and other adults — along with their own fiscal health and that of health care providers — to a block grant.