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Editorial & Opinion

We must defeat Governor McKee’s Medicaid cuts

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One of the most important progressive wins of last year’s budget fight was defeating former Governor Gina Raimondo‘s proposal for $58.7 million of brutal Medicaid cuts.  It wasn’t any easy fight, but we won.  And it’s a fight we have to win again.  Because Dan McKee has proposed $7.1 million of Medicaid cuts.

Let me be clear.  I appreciate McKee dialing down the severity of the Medicaid cuts that formed the centerpiece of Raimondo’s budgets.  I deeply appreciate that McKee found many areas to make real savings, as well as important investments in Medicaid.  McKee’s Medicaid agenda isn’t all cuts, and that is such a welcome change.

But we can’t let comparisons with the past distract us from the fundamental principle that Democrats should never cut Medicaid.  A key component of Lyndon Johnson’s War on Poverty, Medicaid provides healthcare coverage to Americans suffering from low income.  It is one of the most important achievements of the Democratic Party.  We must fight to protect it at all cost.  Behind every Medicaid cut is human pain and suffering.  That is why the principle of no Medicaid cuts is so important.  That is why we must defeat Dan McKee’s Medicaid cuts.

It’s also crucial to understand that Medicaid is mostly funded through federal funds.  When states cut Medicaid, we’re mostly giving up federal funding, not saving money for the state.  For instance, Dan McKee’s $7.1 million of Medicaid cuts will only reduce state funds by $3.2 million.  The other $3.9 million will be lost federal funds.

The first of McKee’s two big Medicaid cuts is to entirely eliminate what is left of the Upper Payment Limit (UPL) payment.  Here are some details from the Senate Fiscal Office’s First Look budget analysis:

The UPL payment makes up the difference between low Medicaid rates and the rates offered by Medicaid, but it only applies in very narrow circumstances in our state.  In order to receive federal funds, the UPL payment cannot apply to the privatized portion of the Medicaid program.  Because Rhode Island privatized most of Medicaid, that leaves out most of the program.  Then, in Rhode Island, we limited the UPL payment to just hospitals.  And then, in the 2019 budget, the General Assembly approved Raimondo’s plan to eliminate the UPL payment for all inpatient care.  I voted against that cruel budget for many reasons, and this painful Medicaid cut was one of them.

Because it’s been hacked to pieces, what’s left of the UPL payment in our state only applies to outpatient hospital care, and it only involves $4.9 million per year ($2.2 million in state funds). However, it is still very important.  Our hospital system is still reeling from this pandemic.  When Medicaid rates are too low, patient care gets compromised.  And when low-income people get worse care, there is very real human suffering on the other end of this cold budget language.  So we must stop the total elimination of what’s left of the UPL payment.  In fact, what we really should be doing is repealing the 2019 Medicaid cuts, restoring the inpatient UPL payment.  And we should ideally apply the UPL payment to other providers beyond hospitals, especially nursing homes.

The second Medicaid cut in the McKee budget proposal is to abolish Medicaid’s Graduate Medical Education (GME) program.  Here are the details from the Senate Fiscal Office First Look analysis:


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The GME program helps pay the cost of medical education in the care of low-income people.  Medicaid education isn’t free for hospitals.  Without GME, med students would likely not get sufficient exposure to caring for low-income people, which would reduce the overall quality of healthcare that low-income people receive in the long run.  Although indirect, the effects of GME matter.  Because the funding for medical education in America comes heavily from student debt, eliminating GME would likely mean even higher med student debt.

Fortunately, there are encouraging signs of broad legislative resistance to abolishing GME.  There is legislation from Senate Finance Chairman Ryan Pearson and House Majority Whip Katie Kazarian to expand GME to more hospitals across the state.  Like saving the UPL payment, this is a winnable fight.

With a surge of federal funds from the national Democrats’ stimulus plan, Rhode Island’s budget has a massive surplus like it hasn’t had in years.  Now is a time to be making strategic investments, not devastating cuts.  At a bare minimum, we must defeat McKee’s Medicaid cuts.

About the Author

Sam Bell is a Democratic member of the Rhode Island Senate. His district contains the Providence neighborhoods of Mt. Pleasant, Federal Hill, Olneyville, Cathedral Square, Regency Plaza, and Manton Heights, along with most of Hartford Park, a small portion of Elmhurst, and the northern portion of the West End around Dexter Park.