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Senate leaders included a surprise in Monday’s budget roll-out – their vision for Medicaid reform.

Sen. Ralph Hise detailed plans that would move Medicaid away from the state Department of Health and Human Services and to a newly created Health Benefits Authority.

The HBA, according to Hise, would contract with three healthcare providers to administer the $14 Billion program.

The new authority would not be subject to the state personnel act, allowing the new entity to set higher salaries for its employees.

Union County Senator Tommy Tucker says this new scenario would allow for greater flexibility, allowing the HBA to more immediately address cost overruns that have plagued lawmakers in the past.

But the change would also see DHHS Medicaid workers lose their positions after this new program is up and running in 2017. Tucker says the changes they are proposing would require a different skill set.

To hear a portion of Monday’s discussion on the proposed Health Benefits Authority, click below. You can also read more about the proposed changes on WRAL.com and NC Health News. Want more? You’ll find the full Senate budget here.

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Commentary

McCrory_budget305-aIt has been a rough couple of weeks for Governor Pat McCrory. First, the House and Senate overrode his vetoes of the so-called ag-gag bill and the legislation that allows magistrates to refuse to marry gay couples if they have a religious objection to marriage equality.

Then Monday Senate leaders rolled out a budget that refuses to restore the state historic tax credit program that McCrory has spent months promoting across the state. The budget also includes a plan to change how local sales tax revenue is distributed that McCrory vigorously opposes, and a proposal to reform Medicaid that McCrory’s appointees at DHHS don’t support.

And to add insult to injury, Senate President Pro Tem Phil Berger told reporters that he does not see the need for a transportation bond issue—another top McCrory priority—preferring instead to stop budget transfers out of the highway fund to raise money for highway projects.

It is the latest reminder that the folks running the Senate believe they are in charge in North Carolina regardless of what the governor of their own party believes.

Commentary

In 2013 the North Carolina General Assembly rejected new federal funds to expand health insurance coverage in the state, but that hasn’t stopped local governments from urging the Governor and legislators to change course.

Counties such as Mecklenburg and Durham have passed Medicaid expansion resolutions as have cities like Greensboro and Winston-Salem. Even Sen. Phil Berger’s hometown of Eden officially went on record endorsing expansion. The Rockingham County towns of Reidsville and Madison have since joined Eden.

This month three more counties — Nash, Edgecombe, and Chatham — joined the chorus.

As retired cardiologist Jim Foster pointed out to the Chatham Commissioners there are tremendous economic benefits to accepting more federal Medicaid dollars. From news coverage of the resolution:

“Anytime money flows into the economy, it ripples through and multiplies,” Foster said.

He pointed to a George Washington University study that broke down the costs and revenues from expanding Medicaid.

The study broke figures down for the state and for its 100 counties.

In Chatham, for example, the study stated that not expanding Medicaid cost 136 jobs and $6 million in gross product.e study Dr. Foster mentions can be found here.

Approval of the Nash County resolution was unanimous and Commissioners added a call for simultaneous reforms to Medicaid. This makes sense. In fact, nearly every expansion state is also reforming the program at the same time.

There is no reason North Carolina’s leaders can’t learn to walk and chew gum like most other states in the country.

Commentary

In case you missed it, be sure to check out Ned Barnett’s column from Sunday’s edition of Raleigh’s News & Observer in which he explains why the myth of runaway Medicaid spending is just that — a myth.

“Refusing to expand Medicaid may look reflexively anti-Obama and hardhearted, but Republicans say it’s a matter of fiscal responsibility. They say that Medicaid’s annual costs are prone to unpredictable surges and that its overall rate of increase means it will soon crowd out the state’s ability to meet its other obligations.

But the Medicaid monster is a myth. A new analysis by the nonprofit Medicaid management organization Community Care of North Carolina found the health care program to be a steady expense. It’s expensive, yes, but it does a lot to improve the health of a vulnerable population and may well head off more expensive medical costs that would inflate premiums for everyone.

John Alexander, Community Care’s vice president for Medicaid financial performance and analysis, sat in a conference room last week and presented the reality behind the illusion. ‘We found that spending on Medicaid isn’t broken, it isn’t unpredictable, it isn’t out of control,’ he said.

Indeed, he said, year-over-year spending on Medicaid is consistent, its administrative costs are relatively low and the cost per patient is going down, falling 9 percent in the last four years.”

The essay goes on to explain how supposed spikes in Medicaid spending in recent years are really just a result of the end of federal stimulus spending in response to the Great Recession:

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Commentary

The wonks at the Center on Budget and Policy Priorities are out with a new and powerful report today on the increasingly-evident benefits of Medicaid expansion. Here’s the lead:

“In the short time since states have been able to expand Medicaid to low-income adults under health reform, a clear divide has emerged between states that have expanded Medicaid and those that have not. Since the major coverage provisions of the Affordable Care Act (ACA) took effect in 2014, insurance coverage rates have improved across the country, but the gains are far greater in the states that have expanded Medicaid. As a result, hospitals in expansion states are treating fewer uninsured patients, and the amount of uncompensated care they are providing is declining steeply. Moreover, contrary to critics’ claims that Medicaid expansion is financially unsustainable for states, there is increasing evidence that expansion has saved states money, and these savings are expected to grow over time.

The Medicaid expansion has had an especially dramatic impact in Arkansas and Kentucky, which both had high uninsurance rates and limited Medicaid eligibility for non-elderly adults before health reform. Both states’ uninsurance rates have fallen by half in just over a year, and the expansion is expected to save each state more than $100 million by the time their current state fiscal years end on June 30.

Meanwhile, the states that have not expanded Medicaid are falling further behind. In the non-expansion states, large numbers of low-income people remain uninsured and without access to affordable health coverage. These individuals are caught in a ‘coverage gap’ because their incomes are too high for Medicaid but too low for subsidies to purchase coverage in the marketplace. Hospitals in these states continue to provide large amounts of uncompensated care, and the states are missing the opportunity to leverage billions of dollars in new federal funding through the Medicaid expansion.”

Click here to see the numbers and read more details about how North Carolina continues to fall farther behind as the result of its stubborn and self-destructive refusal to expand the program.