Medicaid Overpayment and the Real Outrage of RI Government


We intuitively understand that there’s something scandalous about the state of Rhode Island’s overpaying two health insurers by $208 million for Medicaid services, but the reason may not be immediately obvious.  After all, it’s federal money, the cause appears to have been an error in estimating, not corruption, and the money will likely be reclaimed eventually.  In the long run, no harm, no foul, right?

Well, no.  At the first level, this is $208 million that could have been directed toward actual services, rather than filling out the insurers’ balance sheets.  At the second level, it’s tax money that the government could have let taxpayers keep and spend on some other economically more-productive purpose.  Or (more likely) it’s future tax money that will now have to be collected, plus interest, some day when this piece of the national debt finally comes due.

To my mind, the key paragraph from Katherine Gregg’s Providence Journal article, linked above, is this one:

Although lack of data about the new Medicaid population was the main reason the initial rates had been off, [Executive Office of Health and Human Services Spokesman Michael] Raia acknowledged that the state had been conservative to protect the insurers from financial risk and avoid a scenario where claims were not being paid.

Notice for whom the state — which is supposed to represent the interests of taxpayers — is seeking to minimize risk:  insurers and welfare recipients.  Those are the real clients and constituents of state government.  You and me?  We’re the marks.

See, if the state government is “conservative” — by which officials mean taxing and spending more liberally — and takes $208 million of your money that it doesn’t need for the heart-string-pulling project of providing health care to the poor, then it has increased its baseline by $208 million.  Even if the government held budgets flat going forward, that’s $208 million that it has to spend on something else… something that might not be as compelling from a moral standpoint.

  • Raymond Carter

    The real Medicaid tragedy is that on December 31 the Medicaid Expansion coach turns into a pumpkin and RI working people will now be on the hook for BILLIONS of dollars over the years for the anchor babies and ex-cons who make up the majority of those on the once “free” federal Medicaid Expansion bait money.
    Don’t worry though voters they won’t toll your cars-keep voting Democrat!
    Tommy Cranston

  • SurvivorWoman

    News for you – majority of us on Medicaid RI are WOMEN. Not “anchor babies” And I don’t know from ex-cons. I lived a good clean life. I paid my bills, mortgages, debts, ran a responsible life ALL my life. Not a spot on my record. My husband walked out on me, disabled, increasing his wealth as a business partner, book keeper, homemaker – and left me in the detritus of HIS choices and HIS debts. As a homemaker in RI, we do NOT count in family court. Estranged walks off, starts his OWN business, commits lies, owes taxes in 2 cities – doesn’t pay his taxes – makes money that no bank account will track. Has friends in HIGH places. Put a thumb on me while I lose everything. ONLY thing I do have is health care because I have several incurable, severe illnesses. Oh, I agree about corruption, Mr. Carter – estranged fibbed and HE has an anchor card. Yes, there IS a problem in the state of RI with this money. If Justin Katz wants a good story of people who live clean falling through the cracks and reporting themselves honestly, bring it! I live in fear. Everything I built over a life time is wiped out. In other states, the moment an abandoned spouse receives social services, those states seek reimbursement from the one who made the choice to leave. If the state has to pay for me, then they should seek the one who had the power and choices.

    NOT ALL OF US ARE SCAMMERS. MOST OF US ARE NOT. Thank god I had no minor child at the time