The forgotten starting point for Medicaid ‘reform’

One of the things holding up passage of a state budget for the next two years and the adjournment of the 2015 session of the General Assembly is Medicaid reform.

Senate leaders stuffed their version of a managed care plan for Medicaid run by out of state for profit companies into their budget bill and vowed not to leave Raleigh until some variation of it is agreed to by the House and Governor Pat McCrory.

House leaders have their own Medicaid proposal, based on accountable care organizations that give a greater role to providers in controlling costs, and it has passed in a separate bill.

The reforms are very different though both would make changes in the current way Medicaid is administered.

Leaders in both chambers but especially in the Senate constantly exaggerate Medicaid’s problems and its price tag– which is rising as all health care costs increase.

The program has grown as more people enrolled during the Great Recession, which makes sense, since eligibility is partially based on income. More poor families means more children signed up for Medicaid.

The much ballyhooed “cost overruns” in recent years that were eagerly demagogued by privatization advocates came from a state budget based on savings in the program that lawmakers were told were unrealistic and one-time repayments that the state owed the federal government.

The right-wing rhetoric has been repeated so often that it is now common to hear Medicaid, an efficient program that delivers lifesaving health care to the most vulnerable people in North Carolina, portrayed as some necessary evil that is stealing money from school children, a “fiscal black hole” as one right-wing group called it during the last legislative session.

(Those would be the same folks pushing for more and more tax cuts that reduce state revenues and limit the availability of money for investments in education and other state services.)

The Center for Budget and Policy Priorities recently published a series of factsheets about Medicaid that ought to be required reading for the budget negotiators and all the naysayers blaming Medicaid for every education budget cut.

Medicaid currently provides health care for almost 2 million people in North Carolina, the vast majority of them children, seniors, and people with disabilities. The more than a million children covered by Medicaid not only can see a doctor when they are sick, they are vaccinated and get health screenings to prevent them from developing serious problems.

Many of the 187,000 seniors in the state on Medicaid receive nursing home care and some of them receive in-home services so they are able to stay out of institutions. The same is true for the roughly 334,000 people with disabilities covered by Medicaid.

That’s where the bulk of the Medicaid dollars currently go in North Carolina, to make sure children can get vaccinated and see a doctor, and to make sure seniors and people with disabilities are cared for at home if possible and in institutions when they need to be there.

That’s not a fiscal black hole. It’s a godsend and ought to be a source of community pride.

As to how Medicaid spends precious public resources, the Center points out that the overall administrative costs of Medicaid are six percent, less than half of the of overhead of private insurance companies.

The growth in spending per Medicaid enrollee since 2007 has been one percent while it’s up 4.4 per person with private insurance. Overall, spending per person on Medicaid remains well below the cost of the private market.

Medicaid not only takes care of the most vulnerable people in the state, it does it more efficiently than private insurance.

Yet that’s the program folks in the General Assembly are trying to “reform” and turn over to out of state for profit companies.

It needs to be tweaked, like any program, but doesn’t need to be radically reformed.

Instead it needs to be celebrated—and yes expanded so 500,000 low-income and currently uninsured adults can afford to see a doctor when they are sick like folks in 29 other states already can, including several with conservative governors and Republican legislatures. And the federal government will pick up 90 percent of the cost.

Medicaid is not the enemy. It is working and we need to build on its success in our communities not dismantle it for private gain.

Chris Fitzsimon is the founder and executive director of N.C. Policy Watch.

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