Commentary, public health

N.C. House budget underestimates funding needed for Medicaid

Budgeting for anticipated expenses is a key element to fiscal responsibility, just as ensuring that the tax code is adequate to meet those expenses and the needs in communities.

Unfortunately, the N.C. House of Representatives’ budget has failed to pursue this approach in the area of providing quality, affordable health insurance to low-income North Carolinians with disabilities, the elderly, children, and pregnant women.

The budget proposal they approved earlier this month introduced a Medicaid rebase nearly $40 million lower than the Governor’s budget. It also includes a management flexibility cut of $15 million that may result in the need for reductions in administrative oversight at a critical moment in the transformation of the Medicaid system in our state. Last year, the General Assembly underfunded the rebase by nearly $28 million.

While rebase adjustments are only cost estimates based on anticipated changes to enrollment, utilization, costs, rates, and more, there is no advantage to underestimating these costs and, in fact, it compromises the budget process altogether by failing to show the true expenses the state should be meeting.

In years past, inadequate rebase allocations have meant that the General Assembly has to come up with funds at a later date in order to make up the difference, leading to challenges when balancing the state’s budget with available revenue. This is because Medicaid is an entitlement program, meaning that people who apply and meet eligibility criteria are entitled to receive services.

November will also mark the start of North Carolina’s shift to Medicaid managed care, which will involve paying private insurance companies on a per member per month basis to manage the physical and behavioral health needs of those enrollees. While the thinking is that Medicaid transformation will create savings for the state, this expected net savings will take place over time, and it would therefore be prudent for state lawmakers to carefully allocate funds to this area.

Of course, there are also limitations in the state budget thanks to tax cuts introduced since 2013, which have severely limited North Carolina’s ability to generate revenue and invest in our state.

This year alone, the tax cuts that took effect in January resulted in $900 million loss to expected revenue for the upcoming fiscal year, and a current proposal in the Senate would be another blow to the state’s dwindling revenue, worsening the structural deficit.

Suzy Khachaturyan is a Policy Analyst at the Budget and Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

House proposes a budget that still falls short of N.C.’s needs

Note: An earlier version of this post stated that this year’s proposed budget is $13 million less than last year’s enacted budget; however, that did not take into account the funds allocated to the State Capital and Infrastructure Fund, which will take effect with this biennial budget. 

Late on Monday, the North Carolina House of Representatives released their proposed budget for the next two years. Our budget is a reflection of our state’s values, and this vision falls flat. There is no effort to fix our state’s upside-down tax code, and it falls in line with the decades-long trend of decreasing investments in North Carolina as a share of our economy.

After taking into account the monies set aside for the State Capital and Infrastructure Fund – a policy enacted in the 2017 session, which takes effect July 1, 2019 – the house budget spends $721 million, or 3 percent, more than the budget approved for Fiscal Year 2018-19. Due to the statutory nature of this requirement, the funds are not appropriated and therefore are not reflected in the total budget amount.

With our growing population and growing needs, this proposal will fail to serve all North Carolinians and falls short of the investments we need to sustain an economy that delivers prosperity to all.

1. State spending as a share of the economy continues to decrease.

State investments have continued to decline since the recession, largely fueled by our lawmakers’ backwards commitment to lowering taxes, which began in 2013. With fewer revenue dollars as a result, the state’s commitment to funding the basics such as public education, health, and infrastructure diminishes, and so do the quality of such services across our state.

Read more

NC Budget and Tax Center

Medicaid expansion matters to educators and students

Prescription to apply for health insurance with personal computing tablet and stethoscope.

Today, as educators gather in Raleigh, one of their five demands this year is to expand Medicaid to improve the health of students and their families. While students themselves would not gain new health care coverage through closure of the coverage gap, research shows that when parents become newly eligible for Medicaid coverage, they also enroll their children in coverage.

Read more about the benefits of Medicaid expansion for our students in the newly released report from the NC Justice Center here.

Suzy Khachaturyan is a Policy Analyst at the Budget and Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

The real facts on how Medicaid Expansion will help North Carolina

Here are the real facts about how Medicaid Expansion can help people in North Carolina live healthier lives and have the health insurance that they need.

FACT: Medicaid coverage improves health and financial security.

Health insurance provides financial security by protecting people from catastrophic, unexpected medical expenses. Medicaid serves this purpose by protecting individuals and families with low incomes. Numerous studies show that poor health is associated with a higher risk unemployment and job loss.

Many studies, including the Oregon Health Insurance Experiment where low-income individuals were randomly selected to receive Medicaid coverage, point to the benefits of improved health outcomes as a result of health insurance coverage. Research findings on the clinical outcomes from participants in the coverage experiment include an increase in overall health care utilization, self-reported health, and reduced financial strain. Other studies have found reduced mortality rates and improvements in self-reported health among adults.

FACT: Expanding Medicaid will allow North Carolina to serve more people and won’t harm people currently covered by Medicaid. Read more

NC Budget and Tax Center

N.C.’s public health investments lag behind population growth

This past Saturday concluded National Public Health Week 2019, which makes this a good time to revisit the level of investments that North Carolina leaders have made in public health and other areas that are known to affect health.

Last September, we highlighted the ways that public investments are tied to improved health outcomes. A growing body of research shows that funding for local health departments, in particular, is tied to fewer adverse outcomes and improved health, even when controlling for community differences in demographics, socioeconomic characteristics, and medical resources.

And yet, North Carolina lawmakers have agreed to spend fewer dollars on public health efforts in the state, even as the population has increased. Instead, investments should be made in strategies that are proven to help communities thrive, including in public health, in addition to other areas such as education and housing. Together, these cross-sector approaches help to build a culture of health that works to ensure that everyone can live in a healthy, thriving community.

Suzy Khachaturyan is a Policy Analyst with the Budget and Tax Center, a project of the North Carolina Justice Center.