What Was Medicaid Doing in a Foreign Policy Debate?

My oldest son was required to watch this week’s presidential debate and report back to his teacher on flawed logical reasoning by the candidates.  I thought my husband, who is somewhat of a foreign policy wonk, would be on homework helper duty and I could just sit back and enjoy the show—after all, it was billed as a foreign policy debate.

Then came this statement from presidential candidate Mitt Romney:

“States like Arizona, Rhode Island have taken these, these Medicaid dollars, [and] have shown they can run these programs more cost-effectively,”

More surprising than the fact that Medicaid came up at all in a presidential debate focused on foreign policy were the states that presidential nominee Mitt Romney cited as models for other states to emulate — Arizona and Rhode Island.

To help my son understand the flaws in reasoning, I first had to give him a history lesson.

A history lesson on Arizona’s experience with Medicaid …

1982 — Arizona was the last state in the nation to put Medicaid in place and didn’t do so until 1982. Given that Medicaid was created by the same piece of legislation that created Medicare in 1965, it does seem a bit odd to point to such a latecomer as a leader but that’s not as important as how Arizona has managed the program after finally putting it in place.

December 21, 2009Arizona imposed an enrollment freeze on the state’s CHIP program, KidsCare and now has the distinction of having the longest running freeze.  It was the only state to have a freeze in place when the Affordable Care Act and its maintenance-of-effort provision were signed into law so it is the only state to have a CHIP freeze grandfathered in.  According to the most current census data, Arizona has a 12.9% uninsured rate for children, which far exceeds the national average of 7.5%, making it the second to the last state in terms of children’s coverage rates.  In 2010, Arizona became the first and only state to pass legislation ELIMINATING its CHIP program, but had to rescind it because the ACA’s maintenance-of-effort provision took effect before the legislation eliminating KidsCare.

July 8th, 2011 — Arizona put a freeze on new enrollment for childless adults.  Since that time, Medicaid enrollment for childless adults declined from 224,492 to 96,325.  The state also engaged in a highly controversial plan that ended coverage for some organ transplants, which was later rescinded. The state deserves credit for being one of a few that cover childless adults but how it managed Medicaid in tight budgetary times is just a hint of some of the choices states would make if more costs where shifted to them under a Medicaid-block grant and the ACA were to be repealed.

Does this sound like a state model you would want your state leaders to follow?

Now for Rhode Island …

 2008 –  In the waning days of the Bush Administration, Rhode Island received a Section  1115 research and demonstration waiver that included a global cap on spending in exchange for a sweet-heart deal for the state allowing it to substitute federal funds for previously state-only funded programs.  The spending cap was set at a very high level and the state received additional funding, a deal that is unlikely to be reached by other states trying to replicate this model.  In addition, the claims of cost-savings have overstated.  A New York Times article points out there is no hard evidence at all to document claims about how much money the state has saved.  A Lewin Group report commissioned by the state explained that the the Global Waiver was not a block grant.  The report found that while it was too early to assess its full impact, the Global Waiver had saved only about $23 million in the first three years — well short of the $100 million in savings predicted when the waiver was approved.  A Center on Budget and Policy Priorities report lays out these issues in greater detail and finds the savings to be modest and unrelated to the federal cap.  As far as being a model to be replicated in other states … well, states should not hold their breaths for a deal similar to Rhode Island’s in the current budget-cutting environment.

I didn’t even have a chance to get into the history of Massachusetts and question why the former Governor of that state wouldn’t point to it as an example before my son’s eyes glazed over and he was begging to get back to the easy stuff like non-proliferation treaties, currency manipulation and Middle East policy.

(Editor’s Note: For more on how states would fare under a Medicaid block grant, read Judy Solomon’s blog on this topic.)

Cathy Hope
Cathy Hope is the Communications Director at the Center for Children and Families