Sudden Deficits and a Need for Better Decision Making

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The surplus with which the Rhode Island government ended last fiscal year has turned into a deficit, this year, according to a story by Randal Edgar in yesterday’s Providence Journal.  Why?  Well, here’s a big reason:

The rising Medicaid costs are the result of increased enrollment under the Affordable Care Act, as well as a smaller-than-expected savings in Rite Care, the state’s health program for poor families, after the state reduced the income eligibility threshold from 175 percent of the federal poverty level to 133 percent.

Also contributing are delayed eligibility reviews for Medicaid enrollees. State officials say the federal government encouraged the delay with the advent of the Affordable Care Act, thinking states were already busy with the Obamacare rollout. The reviews typically identify cases in which recipients are no longer eligible, for reasons ranging from a rise in income to death, so the delay is adding to the state’s costs.

This is really no surprise.  The RI Center for Freedom & Prosperity pointed out the costs of the ACA back when Rhode Island could have avoided them.  There is surprisingly little interest in debating decisions (like the expansion of Medicaid) as they’re made, which is indicative of the degree to which Rhode Island government suffers from a short-term-thinking approach.

An unsigned editorial calling for Rhode Island’s health benefits exchange to be transferred to the federal government points to another one:

As a further benefit to taxpayers, the federal website appears to be much more efficient than the Rhode Island one, covering people for a much lower cost per applicant. And there are other costs associated with the state program. According to Mr. Alexander, a related initiative, the Unified Health Infrastructure Project, is projected to cost state taxpayers more than $51.3 million between now and 2020.

The cost of implementing UHIP is only the beginning.  The project is designed to link social-service programs together, increasing bureaucrats’ ability to find non-paying customers.  Don’t be surprised when the state government finds we suddenly have new deficits and less money to spend on things that government really ought to be doing, like maintaining infrastructure.



  • Gary

    Our financial wizards could not figure out in advance that when Obama raised the Medicaid eligibility threshold to 130% of the poverty level from 100%, that increase would raise the numbers eligible for Medicaid.

    But in fact we all know they did understand that math, they just didn't want to tell anyone in advance things were going to cost more.

  • Tommy Cranston

    Gee and I thought putting millions upon millions of more people on welfare was going to SAVE money.

  • Guest

    Come on, Tommy. Not having to worry about heath care gives me more motivation to find the plentiful RI jobs.

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