by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
After talking with policy experts and state legislators from
across the country last week, some things are clearer than before.
First, North Carolina needs to work on its own and with
other states to stop the immediate budget-killing effects of the Patient
Protection and Affordable Care Act. On her own, Gov. Bev Perdue can go to HHS
Sec. Kathleen Sebelius to seek waivers for Medicaid as we have discussed in
this newsletter before. Working with other states, Gov. Perdue can explain to
Sen. Kay Hagan how important it is to make the entire Medicaid program a block
grant with flexibility for states. Federal legislation would be more desirable,
but the individual state waiver has precedent in the private sector. A waiver
of some kind, however, is particularly important in preparation for the massive
2014 expansion of eligibility.
Second, if North Carolina cannot get a waiver, the massive
amount of federal money the state uses for Medicaid may be significant enough
that it may actually count as commandeering the state’s budget. The state
either must pay for Medicaid as directed and stop paying for everything else,
or it gives up two-thirds of the money it uses to pay for medical care for the
poor. Without a waiver to improve health care access for those on Medicaid,
however, cutting the program entirely might not have a noticeable effect on
most people. The state could then focus its resources on more effectively
providing long-term care and mental health treatment.
Third, since Gov. Perdue and Insurance Commissioner Wayne
Goodwin are committed to imposing a health insurance exchange in North
Carolina, we need to make sure it is as limited as possible. I’ll cover some of
these steps next week, but the General Assembly must asset its role in the
process and limit Commissioner Goodwin’s ability to destroy competition.
Now for the things that are still unclear. Would the health
insurance exchange manager determine eligibility for Medicaid? What kinds of
subsidies would exist for people who are eligible for Medicaid in 2014 and —
exclusive of whether it would be a good idea — could North Carolina simply transfer some or all of its
Medicaid eligible population onto the federal government’s tab? Is any of this
worth the effort since none of it does anything to reduce cost or improve care?