Rhode Island State Officials to Proceed with Medicaid Expansion Under ObamaCare

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Rhode Island is not content with half-measures where implementation of President Obama’s health care law is concerned.

In addition to setting up a new exchange system, top officials with Gov. Lincoln Chafee’s administration have made  it clear that they intend to proceed with the Medicaid expansion provision of ObamaCare.

“The Governor and Lt. Governor are committed to full implementation of the federal health reform law in Rhode Island in order to provide all Rhode Islanders with access to affordable, high quality health care,” Maria Tocco, the director of public and community relations for Lt. Gov. Elizabeth Roberts, said in a statement.

“As such, the state will pursue the expansion of Medicaid, and the federal government will cover the entire cost for Medicaid expansion for three years,” she continued. “In 2017, the federal government will continue to pay 95 percent of the cost, and starting in 2020 and beyond, the federal government will continue to cover 90 percent of the costs of providing medical coverage to the Rhode Islanders enrolled through Medicaid expansion. Getting these uninsured Rhode Islanders access to coverage will lower the cost of covering the uninsured for the rest of Rhode Islanders who pay for health insurance today.”

But a policy brief from the Rhode Island Center for Freedom and Prosperity argues against this approach. Under the new law, officially titled the Patient Protection and Affordable Care Act (PPACA), childless, able-bodied residents with household income below 133 percent of the federal poverty level will be eligible for Medicaid for the first time.

“The federal aid covering the Medicaid expansion will have phased down from 100% in 2014 to 90% in 2020,” the brief says. “Therefore, in the unlikely event that total Medicaid spending does not increase from 2019 to 2020, the annual cost to Rhode Island taxpayers that year will be about $41.4 million.”

Another critical element known as the “woodwork” effect should also be taken into account, the brief explains. The “woodwork” effect refers Medicaid eligible individuals who have not yet applied, but will be induced into signing up as implementation rolls forward.

The Kaiser Family Foundation has released figures that show that the new Medicaid recipients will cost Rhode Island just over $300 million a year.

When administrative and spending costs are taken into account, the expanded enrollment will result in about $452.3 million in annual Medicaid spending, according to the brief. Out of this amount, Rhode Island will be responsible for almost $60 million beginning in 2020.

“At that time, about one in four Rhode Islanders will be directly dependent on the Medicaid program for health care,” the brief says.