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Saturday, May 18, 2024

Even if you find Medicaid boring, take time to read this

Unless you are among 18% of North Carolinians who receive Medicaid, the term induces either boredom or despair. The mechanics behind the government’s health insurance for low-income families and individuals are so complex, and the subject so distressing, that it’s much easier to just avoid the topic.

But senior contributing editor Ed Martin took a close look at North Carolina’s Medicaid program, which would be dramatically revised under a law passed by the General Assembly last year. His story is published in the March edition of Business North Carolina, which will be online next week.

Here is a CliffsNotes version of Ed’s story that everyone should understand — even if the topic is Medicaid:

  • States decide who gets Medicaid and how care is delivered, even though the federal government pays most of the bills.
  • North Carolina is among 19 states that didn’t expand Medicaid in concert with “Obamacare,” the federal plan to insure more people. If we had expanded, more than 20% of N.C. residents would receive Medicaid benefits.
  • Medicaid spending accounts for about a third of all state-government spending. That’s right: One third of your state tax bill goes to pay for health insurance for people who are not eligible for Medicare, the federal program for people age 65 and older.
  • The 2007-09 recession sent Medicaid costs soaring. A bad economy causes economic distress and too few people save for a rainy day.
  • North Carolina’s Medicaid program has been well run and cost-efficient, according to Harvard Business School research cited by U.S. Sen. Richard Burr in April 2013.
  • A day later, Gov. Pat McCrory labeled North Carolina’s program as “broken.” Rising Medicaid costs had unnerved state leaders, who wanted more predictability.
  • McCrory’s comments mirrored Republican governors across the U.S., who made “a broken Medicaid system” a well-rehearsed political talking point. They cite research about Medicaid from libertarian-oriented think tanks.
  • Republican lawmakers approved a new plan that will pay insurers a set fee to take care of Medicaid recipients. The risk — if Joe or Janie’s health care costs are much higher than the set fee — will be with insurers, not the state.
  • North Carolina’s hospitals don’t want to be cut out of the game, so they begrudgingly are creating an insurance company to compete with the traditional industry giants.
  • Medicaid is an excellent revenue source for many hospitals. The government pays its bills.
  • North Carolina is submitting its plan to the feds by June 1. The Obama Administration is likely to stew on it, perhaps through the end the president’s term. Most Democrats oppose the reform, which they say will reduce the quality of care as insurers profit.
  • Medicaid spending is $181 million under budget during the first half of this fiscal year. A better economy reduces economic distress.
  • McCrory and Rick Brajer, secretary of the N.C. Department of Health and Human Services, declined Ed’s repeated requests to discuss the state’s new plan — which, again, affects nearly a fifth of N.C. residents. Showing more guts was Sen. Ralph Hise, a Spruce Pine Republican who explained his support for the change in an interview. Thank you, Sen. Hise.
David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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