White House Won't Rule Out Waivers to States on Medicaid

As the cost of Medicaid soars and continues to be a major cause of financial turmoil for the states, the Administration won’t rule out letting individual states get waivers from the 44-year-old program that was originally designed for lower-income patients and welfare recipients.  

With so many people neither in lower-income brackets or on welfare on the Medicaid rolls, the price-tag on the program is nearly $300 billion a year.  Last year, the state of Rhode Island sought a waiver from the federal Medicaid system, which was approved on January 16 of this year and signed by Kerry Weems, acting Administrator of the Center for Medicare and Medicaid Systems (CMS).  

Much like the waivers in the 1990’s that gave states a free hand to deal with ballooning welfare rolls (and were the genesis of the “tough love” welfare plan signed into law by President Clinton in 1996), the waiver on Medicaid permits Gov. Donald Canceri and his health care team to determine eligibility requirements, toughen limits, and reform the system  in Rhode Island.  

Citing the example of Rhode Island at the White House briefing yesterday (July 1st), I asked whether allowing more states to have waivers is something that is on the table with President Obama as he grapples at a time when so many states are in the red because of Medicaid costs.
“Let me talk to the health team,” Press Secretary Robert Gibbs told me, “I don’t know the degree to which that’s something that — how much they’ve gotten involved in that.  Obviously, I think you mentioned Medicaid represents a growing fiscal component for states, especially in harder economic times, and that obviously is something that has to be looked at and addressed in anything that’s comprehensive.

“But again, I think that also strengthens the argument for changing the way health care is done and ensuring that it’s done in a way that’s affordable, again, not just for families and small businesses but for state governments, as well.”

Whatever the Administration does, it is quite likely that, as Medicaid costs go up, the national press and other states will keep an eye on Rhode Island.  There, Bill Felkner and the Ocean State Policy Research Institute (OSPRI) have been the driving force behind the waiver and are in the process of laying out specific proposals to cut costs of Medicaid.  It also seems a good bet that Gov. Canceri will have a lot to say about this during the upcoming National Governors Association (NGA) meeting in Mississippi on the weekend of July 25th.