By JIM BARON

PROVIDENCE — Gov. Donald Carcieri took the extraordinary step of testifying in person before the House Finance Committee Friday.

He was pitching the global Medicaid waiver his administration negotiated with the federal government that he is relying on to help balance the current year’s budget and save the state tens of millions of dollars over the five-year life of the agreement.
He painted the controversial waiver as “a huge opportunity” for Rhode Island to take the same dollars it is currently using for Medicaid and “putting (them) into a level of care appropriate for our citizens.
“There is no place in the country where the federal government has agreed to give a state the kind of flexibility they are agreeing to give us,” Carcieri said.
But not everyone was bullish on the idea.
The committee spent several hours mining much of the minutiae of the agreement, which one committee member noted constitutes a stack of paper approximately five inches thick. Later, several social service providers raised concern and doubts about the program.
None were as vehement as Dr. Robert Carl, a former top official in the Almond administration who is now director of Woonsocket’s Homestead Group, which serves the developmentally disabled.
Carl told the panel it “defies reality and common sense” to think the savings the governor touts won’t come at the expense of Medicaid recipients. He wondered aloud what would become of those individuals once they could not depend on the programs they have become accustomed to.
At about 4:20 p.m., House Finance Committee Chairman Steven Costantino recessed the hearing, which started shortly after 10 a.m. He said it would resume Monday at 1 p.m.
The General Assembly has a short window of time to reject or amend the wording of the waiver, or it will become effective as is 30 days from Dec. 19, the date the federal government gave its approval.
In exchange for accepting a limit of $12 billion in federal dollars over five years, the state will be allowed to in effect make its own rules about how that money should be spent.
Carcieri acknowledged that the human services budget, which he said represents about 27 percent of all state spending, is “the core of our safety net. I am keenly aware that the Medicaid budget is what is supporting our citizens that are vulnerable, who need these services, and the goal of this is to keep this safety net intact and strengthen it, not to do anything to diminish it.
“I can’t say that enough,” the governor added, “because there is a lot of misinformation out there.”
In fact, Carcieri said, the state has been struggling in recent years to keep up with the inexorable increase in Medicaid costs. They have done so by limiting enrollment – raising the maximum income levels that determine family eligibility.
“I don’t want to keep doing that,” he told the panel, adding, “that’s the point of the flexibility of this waiver, so we don’t have to keep reducing eligibility.”
Carcieri stressed several times that the executive branch would not be making decisions unilaterally. He promised that the General Assembly “will be keenly and intimately involved in this. Any changes in these programs that happen are going to be your determination.
“I would rather, frankly, have these decisions coming from us, here,” the governor said. “I don’t want the federal bureaucracy down there taking a year or 18 months every time we want to do something we think is a good thing to do.”
If the program does not perform as expected, Carcieri told the lawmakers, “we can decide to opt out. A new governor or the legislature can say ‘this hasn’t worked out the way we thought it would work.’
“I don’t believe that will be the case, I think we are going to be thrilled with it,” he quickly added, “but if that were to happen, we can opt out. It’s not like this is something we are locked into irrevocably.”
Gary Alexander, director of the Department of Human Services (DHS), assured the committee that the waiver “does not cut eligibility and it does not cut benefits.”
Nonetheless, he said, the waiver is expected to save the state $358 million over five years. “These savings will allow the legislature to focus on other areas of the budget or use the savings to reinvest back into the Medicaid program,” Alexander said.
He added that the change would allow the state to get a federal match for programs that have until now been funded exclusively by Smith Hill.
Alexander likened standard Medicaid service to walking into a McDonald’s, asking for a cup of coffee and getting a Big Mac instead: “Not only is it much more expensive, it is not what you wanted.”
The waiver, he said, will allow the state to “provide the right care to the right people in the right settings,” not forcing people into nursing homes where home care or something short of a nursing home would be appropriate.
On the eve of the committee hearing, the Washington DC-based Center on Budget and Policy Priorities issued a report warning that the waiver “would pose a serious financial risk to Rhode Island.
“With a deepening recession, Rhode Island’s very high unemployment rate, and escalating health care costs, the state would be making a high stakes gamble by agreeing to the waiver,” said Joan Alker, deputy executive director of the Georgetown Center for Children and Families and co-author of the report.
The terms and conditions of the waiver, the report states, “are a bad deal for the state, because they fail to account for the impact of the recession on Rhode Island ... the five-year cap on federal funds is too low, making it likely that the state will have to make cuts in benefits, provider payments, or eligibility to stay under the cap ... (and) fiscal relief from the federal government (as part of President-elect Obama’s proposed stimulus package) is likely to bring hundreds of millions of dollars to Rhode Island, far more than any short-term gain the state might get from the waiver.”