State will forgo Medicaid cuts

State will forgo Medicaid cuts

- in Uncategorized

Raleigh News & Observer
Legislators spare the 65,000 at risk of losing coverage and study ways to curb growth

By LYNN BONNER, Staff Writer

The 65,000 old or disabled people who were at risk of losing Medicaid coverage will stay on the rolls, state budget negotiators said Tuesday.

The Senate had pushed for the cut as a long-term strategy to save money on prescription drugs. House negotiators did not want to reduce health services, and the disagreement was a major sticking point in budget negotiations.

"We were just quite adamant that we were going to keep it there," said Rep. Beverly Earle, a Charlotte Democrat and budget negotiator.

Legislators working behind closed doors on a budget compromise agreed to study ways to cut Medicaid growth. Costs are increasing about 12 percent a year, outstripping revenue increases and contributing substantially to state budget growth. The study will be a special provision in the budget bill.

Medicaid, the government insurance program for the poor, covers about 1.5 million North Carolinians. Federal, state and county governments share the cost.

The state needs ideas for holding down Medicaid expenses, said Sen. Kay Hagan, a Greensboro Democrat and budget negotiator. "If we don’t, there won’t be enough money to cover other items," she said.

In calling for the cuts, senators were responding to a side effect of the federal law that added prescription drug coverage to Medicare, the federal health insurance program for the elderly. States must pay the federal government 90 percent of the cost of drugs for people who are enrolled in both Medicare and Medicaid.

Senate Democrats thought it would make sense to pare the 65,000 people from the rolls by ending a benefit first offered in 1999. In that year, the General Assembly allowed people at poverty level, now $798 a month, to receive Medicaid. Previously, they earned too much to be eligible.

Most Medicaid recipients on the cut list, about 57,000 people, also are covered by Medicare. They would have kept most medical coverage, but Medicaid pays for glasses, in-home care and other expenses that Medicare does not.

Hoping to get House members to agree to the cuts, Senate negotiators had proposed a special fund to pay for short-term help for the about 8,000 people who would have lost all health coverage. They also offered to set aside money for in-home care and mental health services.

A central objection to the Senate plan was that the safety net was temporary and wouldn’t be around to offer continuous coverage for poor, disabled people.

"It makes the assumption that no one new ever comes into that category," said Rep. Verla Insko, a Chapel Hill Democrat.

North Carolina and other states that expanded Medicaid to cover more people will suffer a greater federal penalty, said Sen. Walter Dalton, a Rutherfordton Democrat and budget negotiator. The Senate was trying to "cost shift that prescription drug cost to the federal government," he said.

But Adam Searing, project director for the Raleigh-based N.C. Justice Center’s Health Access Coalition, said replacing the federally backed health insurance with state-funded safety nets made no financial sense.

"It seems blindingly simple to me," Searing said. "If you try to provide that same amount of health care, it’s going to cost a lot more money."

Staff writer Lynn Bonner can be reached at 829-4821 or [email protected]