PROVIDENCE –– The state’s congressional delegation warned yesterday that Governor Carcieri’s plans to overhaul Medicaid may create massive budget deficits and “unprecedented cuts” to health-care programs that currently touch 180,000 elderly, poor or disabled Rhode Islanders.

The dire prediction, transmitted in a letter to the governor’s office yesterday, came on the eve of the General Assembly’s self-imposed deadline to block Carcieri’s proposal. Unless the Assembly takes action today, Rhode Island will become the first state in the nation to secure a deal with the federal government limiting all Medicaid spending over the next five years.

The agreement also gives the state unique flexibility to reshape health insurance programs that have long been dubbed “entitlements” because they guarantee services to people who meet certain income thresholds.

“Under this process, the scope of the changes that could be made is seemingly unlimited, and such changes could fundamentally alter the Medicaid program and the safety net on which hundreds of thousands of Rhode Islanders rely,” reads the letter bearing the mark of the Congress of the United States. “There are no protections to ensure that essential benefits are available to those for whom they are medically necessary, and the specific changes that the state will seek remain unknown.”

And in sharp contrast to projections by the governor’s office, the congressional delegation contended that the $12-billion spending cap — the result of months of negotiations between the Bush and Carcieri administrations — could leave Rhode Island government “up to $842 million short of its projected obligations over five years.”

The state Department of Human Services, however, released an analysis yesterday suggesting that Rhode Island would have no problem living within the new spending limit, with $245 million to spare.

In a brief interview, DHS director Gary Alexander dismissed the letter — signed by Senators Jack Reed and Sheldon Whitehouse and Representatives Patrick Kennedy and James R. Langevin, all Democrats — as being politically motivated. The plan, crafted by a Republican governor and a Republican president, has drawn considerable national interest as other states look to rein in skyrocketing Medicaid costs.

“This seems to me as though they’re making it a partisan issue. I don’t think it should be. I think what we’re doing is good for the care of all Rhode Islanders,” Alexander said. “I think it’s politics. We’ve analyzed this … We need to make decisions locally. We don’t need Washington dictating.”

Despite the congressional concern, there was little indication yesterday that the state legislature would block the governor’s plans, dubbed the “global Medicaid waiver,” from taking effect.

“I’m concerned … but now we have our backs against the wall,” said Sen. Juan M. Pichardo, D-Providence, after a lengthy Senate Finance Committee hearing devoted to the waiver.

Indeed, the agreement represents the governor’s only plan to control ballooning Medicaid costs while preserving some services. The alternative, Alexander said, is “deep cuts to programs and services.”

Carcieri once predicted the agreement could save $67 million this fiscal year alone, although Alexander yesterday reduced savings projections to just $13 million because of implementation delays.

The governor briefly addressed the Senate Finance Committee yesterday, as he did in the House Finance Committee the week before, promising to work closely with the legislature.

“There are not going to be changes made to any of these programs without legislative input,” Carcieri said.

But the agreement with the federal government doesn’t require the executive branch to consult the legislature in all cases. The administration is expected to adopt new rules tightening eligibility for seniors in the long-term care system, for example, which would require public hearings, but little else.

But Carcieri said there were plenty of safeguards, including a legislative oversight committee and an advisory council.

“I truly believe this is a historic opportunity to do something that’s never been done,” he said. “With the eyes of the nation on Rhode Island, I don’t want to drop the ball.”

—With reports from Katherine Gregg

speoples@projo.com