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Medicaid system needs revamping

By Staff
North Carolina counties may get some relief from their Medicaid woes.
The question is if it will be enough.
The House budget originally included $60 million in county Medicaid relief for 2007-08 with $30 million going to all 100 counties and $30 million to counties with at least 25 percent of their populations eligible for Medicaid services. An amendment adopted Thursday upped the total relief to $100 million, with $50 million going to all counties, $40 million to counties with at least 25 percent of their populations Medicaid eligible, and another $10 million to counties whose Medicaid-eligible population is at least 20 percent but less than 25 percent.
Remember, North Carolina is the only state in which counties pay a fixed percentage of Medicaid costs. Counties have no say in setting the rules on how the program is operated, but they are forced to pay their shares, no matter how few resources they have.
In Washington County, Medicaid expenses in the first six months of the year totaled $770,000, or $199,000 more than in the same period the year before. In Beaufort County, the Medicaid bill has been running between $3.5 million and $3.8 million, but will jump to $4.5 million next year.
Based on a story published in Budget &Tax News this month, the Medicaid mandate eats up 20 cents out of every dollar in the budgets of Bertie and Hertford counties.
Rep. Bill Owens, D-Pasquotank, made the amendment last week, and many members said Medicaid relief was the most pressing issue facing the General Assembly this session.
Without any relief, North Carolina counties are projected to spend at least $517 million on Medicaid services costs in 2007-2008, an increase of nearly $100 million since 2005-2006.
A 2006 survey by the N.C. Department of Public Instruction found that approximately $9.7 billion of school capital is needed over the next five years to accommodate mandates for smaller class sizes in lower grades. For 2006-2007, 50 counties are budgeted to spend more for Medicaid services than on school construction, renovation and other capital needs.
The issue is one of fairness. Medicaid costs aren’t that big an issue in coastal Carteret County. It spends less than 5 percent of its general fund on the program. But in Robeson County, the figure is 14 percent of the general fund, and 44 percent of the county’s residents are Medicaid-eligible.
Without true Medicaid relief, the state’s poorest counties will continue to get poorer. They will be strapped with state mandates like Medicaid, and won’t have the resources to properly fund schools. Because they have small tax bases to tap, their tax rates will be higher and that will drive some new businesses to other locations where the cost of doing business is less.
The time to revamp the system is now.