Rhode Island’s Medicaid Experiment Becomes a Talking Point for Budget Cutters

The experiment is the closest to an example of the kinds of changes that Republicans say they want to make — limiting federal spending for Medicaid while giving states more freedom to decide what benefits to offer and how to control the costs.

But an examination of Rhode Island’s experience shows it has not yielded the kinds of savings its supporters claim.

Federal spending on Medicaid continues to rise in Rhode Island, including payments the federal government would not be making otherwise. And unlike a Republican plan that passed the House last month, under which states could lose a substantial amount of federal financing for Medicaid, Rhode Island is virtually guaranteed more money than the state itself has estimated it needs.

Under the experiment, which was born in a 2009 agreement between the state and the federal Centers for Medicare and Medicaid Services, spending on Medicaid was capped at $12 billion through 2013. The state would be responsible for all costs above that amount, rather than sharing those expenses with the federal government.

In exchange, the federal government granted Rhode Island more flexibility in how it runs its Medicaid program.

State health officials predicted the agreement would allow them to offer better and more efficient health care at less cost to taxpayers.

Some Republican governors, members of Congress and conservative commentators have seized on the Rhode Island experiment as proof that the Republican plan to turn Medicaid into a “block grant” program can work. Under such a program, states would get a set amount of federal money to spend on health care for the poor and disabled, along with the autonomy to decide how best to spend it.

Gary D. Alexander, a Republican and former Rhode Island secretary of health and human services, praised the agreement, which he negotiated, in a paper published this year. He said the state had saved more than $100 million in the first 18 months.

But Mr. Alexander’s Democratic successor, Steven M. Costantino, said he “cannot substantiate those savings at this point.”

Still, Mr. Alexander’s estimates have been widely cited by those who support overhauling Medicaid.

Representative Cathy McMorris Rodgers, Republican of Washington State, is the co-sponsor of a plan introduced last week in Congress to lift rules that forbid states from changing Medicaid eligibility requirements. She considers the Rhode Island agreement to be a model for other states, said her press secretary, Riva Litman.

“That plan is supported by both parties in Rhode Island and has saved hundreds of millions of dollars through competition-driven efficiencies and accountability,” Ms. Litman said.

The Rhode Island agreement shares the same goals as the block-grant plan proposed by Representative Paul D. Ryan, Republican of Wisconsin, and contained in the budget resolution that passed the House last month, said Conor Sweeney, a spokesman for Mr. Ryan. The idea is to give states the “freedom to tailor Medicaid to meet the needs of their unique populations,” he said.

“Rhode Island’s experience underscores the positive gains from loosening Washington’s misguided one-size-fits-all approach that ties the hands of too many state governments,” Mr. Sweeney said. “Governors across the country continue to demand less onerous restrictions from Washington so they can better deliver quality, affordable health care to their Medicaid populations.”

During a Senate Finance Committee hearing in February, Senator Tom Coburn, Republican of Oklahoma, also pointed to the experiment in Rhode Island as a success.

“Why don’t we just block-grant every state, take the rules off and let them do these strategies,” he asked. “Rhode Island’s obviously already figured it out.”