State Policy and Rising Health Care Costs Push Spending Past Revenues Despite Declining Enrollments Under New Federal Restrictions
Rhode Island’s Medicaid program represents the state’s largest public investment, representing over one-third of total state budget spending. Medicaid provides a critical safety net for nearly three in ten Rhode Islanders and fuels the state’s healthcare sector. However, sustaining this massive program poses a critical fiscal challenge.
RIPEC’s comprehensive report examining Rhode Island’s Medicaid trajectory, finds that state spending on the program is projected to continue to increase nearly three times faster than state revenues.
Find the executive summary here.
Key Takeaways
- Rhode Island ranks 10th highest nationally for the share of residents enrolled Medicaid (28.5% in 2024)—the highest in New England.
- In 2024, the Ocean state ranked 12th highest for total Medicaid expenditures per $1,000 of personal income—5th highest for state-funded spending—despite having relatively moderate expenditures per Medicaid enrollee (23rd highest).
- Policy choices, including high income eligibility ceilings and a broad range of optional adult benefits, drive Rhode Island’s Medicaid expenditures.
- Spending is heavily concentrated on specific Medicaid populations: Elders and Adults with Disabilities represent just 16% of enrollees but consume 49% of benefit funding.
- State spending for Rhode Island’s Medicaid program is projected to grow by 24.1% from SFY 2027 through FY 2031—an average annual increase of 6.0%—far exceeding the expected growth in revenues (2.2% annually).
- Long-term services and supports represent the state’s largest future cost driver. Developmental disability services and home-based personal care (including home health and personal care attendant supports) are projected to increase by 41.1% and 42.0%, respectively, between SFY 2027 and SFY 2031.
- Expenditure growth is projected to persist despite state estimates that over 30,000 Rhode Islanders will lose coverage under new federal rules. Concentrated among primarily lower-cost adults, disenrollments will have minimal impact on rising costs driven by high-acuity long-term care and health sector inflation.
- While Rhode Island has strong national rankings for health outcomes and high insurance coverage rates, there are significant access constraints. Field audits found appointment booking success rates fell below 20% for primary care, pediatrics, and outpatient behavioral health.
Recommendations
- Control the overall trajectory of Medicaid spending
- Modernize network standards to expand access to care
- Enhance public data transparency and managed care oversight
- Expand high-quality jobs and private insurance coverage
