JLF Memo
Apr. 18th, 2011: - johnlocke.org

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Why doesn't Gov Perdue like her own budget?
By Joseph Coletti

House budgets less and more for DHHS
Budget subcommittees last week released their spending plans for the next fiscal year. The plans build on Gov. Perdue's recommendations and budget writers clearly indicate those places where they have taken her ideas. In Health and Human Services, the plan calls for $4.4 billion in state appropriations, a reduction of $527 million from the continuation budget, with $335 million of that coming from Medicaid savings. Because of the "stimulus" budget trickeration last year, this cut is actually a $450 million increase in state appropriations from the current fiscal year's budget. So the state ends up spending more but getting less because of the bailout.

Senate overrides veto of governor's health plan changes
One part of the budget is already running into challenges. The State Senate voted last Thursday to override Gov. Perdue's veto of changes to the State Health Plan, even though the changes are almost identical to the changes she proposed in her budget plan in February. The state employees union (SEANC) agreed to the changes, but the teachers union (NCAE) did not.

From page 295 of Gov. Perdue's Recommended Budget (PDF):

It is recommended that the State Health Plan appropriation be reduced through a combination of benefit changes, provider savings, and employee premium adjustments. Active and retired employees would still have a no-cost individual option with the PPO 70/30 Plan. Active employees and non-Medicare retirees who wish to remain enrolled in the PPO 80/20 Plan would pay a monthly premium of $21.50 for individual coverage. Medicare retirees who wish to remain enrolled in the PPO 80/20 Plan would pay a monthly premium of $16 for individual coverage.
The Senate bill is a bit more explicit about the benefit changes.

Update on exchanges
Rep. Jerry Dockham, chief sponsor of the GOP bill to create a state-run ObamaCare Exchange revealed three things about it. An exchange would be

  • Expensive: Dockham would not speculate on cost, but an actuarial estimate from the North Carolina Institute of Medicine put the cost of administration at $22 million per year or more.
  • Intrusive: There are two exchanges in operation today, in Utah and Massachusetts. The Utah exchange is the more market-oriented of the two, but the North Carolina exchange will have a heavier regulatory burden. The only room for flexibility is to have more regulation than the federal baseline.
  • Corrosive: Even though it has a clause to automatically end the exchange if the federal requirement for one disappears, Dockham says it may be "a good way to purchase insurance" and so live on even without ObamaCare.

Latino Dentist/Pharmacist arrested for doing no harm without a license
Galo Alejandro Mendoza practiced dentistry and purchased and dispensed Lidocaine without a license. So he was neither a dentist nor a pharmacist, but took on their duties for his clients. None of the charges against him claim that he injured anyone, gave Lidocaine to anyone with a drug problem, deformed anyone's smile, or in any way left his customers dissatisfied with his work. He expanded access for individuals who were likely uninsured and low income, exactly what ObamaCare supporters say the federal law will do. Instead of awards, however, Mendoza got arrested.

Click here for the Health Care Update archive.


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