PROVIDENCE –– Rhode Island will become the first state in the nation granted unprecedented federal authority to overhaul health insurance programs for its neediest residents.

The General Assembly could have voted yesterday to block the Carcieri administration’s ambitious five-year deal with the federal government, known as a “global Medicaid waiver.” But the Assembly took no such vote.

And despite widespread confusion over how the agreement would affect 180,000 elderly, poor and disabled Medicaid recipients, the new system will take effect Monday.

Governor Carcieri has yet to explain in detail how he will reshape health insurance programs with his newfound flexibility, although he says the waiver is necessary to control skyrocketing costs and better serve Medicaid recipients in Rhode Island’s long-term care system.

“This is to make the system better,” he said yesterday, noting that nursing home residents could more easily use Medicaid funds to live with family or friends under the new plan. But when asked about a separate proposal to limit the “benefit package” for thousands of low-income health-care recipients, Carcieri referred questions to a department head.

The governor has consistently promised to consult the legislature on any changes over the life of the agreement, which limits all Medicaid spending to $12 billion through 2013. But Assembly leaders in both chambers introduced legislation yesterday that doesn’t give Carcieri a choice.

“There are real issues and real concerns, and quite frankly, too many unknowns to allow the waiver to fly without substantial oversight,” said Senate Finance Committee Chairman Daniel DaPonte.

The Senate bill states, “No changes in the state Medicaid program shall be made without the express approval by a legislative body...” It allows the governor to unilaterally enact only the most basic administrative changes that don’t affect “beneficiary eligibility, benefits, overall healthcare delivery systems, payment methodologies or cost sharing.”

The Assembly expects to approve the oversight legislation in the next two weeks. The administration has promised not to begin implementing the new system in that time, according to a letter sent yesterday to House leaders from Gary Alexander, the Department of Human Services director.

During a special briefing for House members yesterday, Majority Leader Gordon D. Fox acknowledged the oversight legislation could create a substantial bureaucratic burden as the administration rolls out its new system.

“We’re going to err on the side of having everything come through us. We’ll just have to work hard to get through it,” Fox said.

In a separate interview earlier in the day, the governor said he was open to legislative oversight.

“The idea was to give the state flexibility to not be hemmed in by the feds,” Carcieri said, noting that he preferred to deal with state bureaucracy over federal bureaucracy. “If the legislature mucks this up by making it difficult or dragging out the time period, I still think it would be much better.”

speoples@projo.com