by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
The time has come for the House and Senate to hash out differences between their versions of the Governor’s recommended FY 2014-15 budget.
When it comes to Medicaid, the Senate proposes aggressive policy changes to North Carolina’s program. In their eyes, Medicaid reform means having provider-led organizations or contracted managed care entities bear full financial risk when delivering care to patients on medical assistance. The hope is to achieve budget predictability. The House, meanwhile, does not include specifics for Medicaid reform. It does, however, call for $1 million to study Medicaid reform.
Medicaid costs taxpayers a lot of money (see explanation here.) When a state’s program becomes too much of a financial overload, state leaders resort to reducing provider rates or scaling back on services. Only the Senate has proposed a rollback of optional services, but both chambers have initiated provider cuts.
Although North Carolina reimburses Medicaid providers at a pretty penny compared to a majority of states, a 2-3% rate reduction proposed by the House and Senate is not the way to help solve the access issue for Medicaid patients. This potential outcome along with Medicaid paying significantly lower rates than private coverage explains why one quarter of North Carolina providers do not accept new Medicaid patients.
Imagine what would happen if the state decided to go forth with Obamacare’s tenuous Medicaid expansion?