This afternoon Governor McCrory announced that because NC Medicaid may spend between $70 million to $130 million more than the unrealistic budgets created for Medicaid by the GOP-led General Assembly last year he is freezing state employee salaries and limiting other purchases. Sounds like he’s feeling the heat from his disastrous decision to not accept approximately $1.4 billion a year from the federal government to expand our Medicaid program to more poor citizens. This is just a transparent political ploy to once again bash our great NC Medicaid program and deflect blame from his decision to turn down all that federal money. Some facts are called for here:
1. According to the exhaustive, two-year study by the NC Institute of Medicine, if NC took federal $ to expand Medicaid, our state would save $159 million over the next two years. This would easily cover the budget adjustment he is supposedly concerned about. And, as Sarah Ovaska points out below, NC has a $100 million surplus right now, so it’s unclear why McCrory is saying we have a $100 million shortfall!
2. NC deals with these sort of budget adjustments in Medicaid every year. In a program with about $3 billion in state spending, the so-called shortfall McCrory is declaring a crisis over amounts to 2%-4% of total state spending. In a multibillion dollar health program that cares for well over one million North Carolinians, of course these sorts of budget adjustments happen every year. Private insurance companies keep a reserve to deal with exactly these adjustments in their projects as to what they will spend every year. NC Medicaid adjusts its budget in the same way.
3. Fact: NC Medicaid has lowest rate of spending growth of any state in US. We must be doing something right!