Time for Medicaid reform in NC

Editor’s note: I am delighted to welcome Sharon Kasica, who will be writing a weekly column for the Guardian. This is her initial salvo.

North Carolina’s budget for Medicaid is second largest in the Southeast, with $8,068 spent per enrollee, or $1,143 per capita.  In 1990, NC Medicaid was approximately 5.5 percent of the General Fund; today, Medicaid has escalated to 15.5% of the General Fund, or $2,958 million for 2012.  In 2008, Medicaid and Health Choice covered approximately 31 percent of all North Carolina children.  Medicaid enrollment among adults under 65 has more than doubled in the last 10 years.  The NC Division of Medical Assistance projects another 500,000 people will enroll in Medicaid by 2016 due to ObamaCare, which states that anyone who earns up to 133 percent of the Federal Poverty Level, which is about $14,000 a year/person, can qualify for the health program.

What has caused the explosion of Medicaid expenditures over the past 10 years? Obviously the poor economy has led families to fall into the 133 percent Federal Poverty Level, which qualifies for Medicaid.  However, there is more to the story.  In the 1990s, North Carolina experienced a 393% increase in the Hispanic population, which was the fastest growth rate in the U.S.  The Pew Center estimates that approximately 330,000 Hispanics, or 65%, are illegal immigrants.

The Federation for American Immigration Reform (Fair) estimated that 3.5 million immigrants were covered by Medicaid as of 2004.  Between 2000 and 2005 state Medicaid spending for illegal immigrants increased from $25.8 million to $52.8 million. One cause is the rise of fraudulent documentation and identity theft to obtain the required documentation to qualify for federal and state services.  Another cause is the overuse of Emergency Services in hospital emergency rooms.

In 2003, North Carolina had $1.4 billion in unreimbursed hospital costs caused mostly by illegal immigrants, which the hospital passed on to other patients and insurers. North Carolina OB/GYN physicians estimate 40 percent of the babies delivered in Hospital Emergency rooms are born to illegal immigrants, at a cost of between $6,800-$18,000 per birth. Eighty-two percent of Emergency Medicaid services for illegal immigrants are for childbirth and related complications. Spending for elderly illegal immigrants is also increasing rapidly.   Annually, NC budget shortfalls leave Medicaid inadequately funded, which means many physicians, hospitals, and pharmacies receive a low reimbursement, and sometimes nothing at all, for the services rendered. Something must change.

Florida and Louisiana faced similar Medicaid challenges.  Both states are pursuing an alternative path to provide healthcare to its poorest citizens.  These states have decided to let private health insurance manage the healthcare for its Medicaid population, at a substantial savings to taxpayers.  Is it time for North Carolina to reform our Medicaid programs using the private sector?   It is certainly something worth discussing, since once again NC lawmakers must find an additional $139,000,000 in the budget to fund the 2012 Medicaid shortfall.

Sources:

www.johnlocke.org/agenda2010/medicaid.html

www.wral.com/news/state/nccapitol/blogpost/10468623/

www.statehealthfacts.org

www.kff.org/medicaid/8220.cfm

Sharon Kasica is a healthcare policy analyst. She writes a weekly column for The Greensboro Guardian.

One Response to Time for Medicaid reform in NC

  1. Tina Forsberg says:

    There are some very interesting reforms going on at the state level. I hope NC will step up to begin to deal with these critical societal challenges. I’d have to learn more about the FL and LA reforms, but I’m willing to consider it. LA is also at the leading edge of education reforms.

    Thanks for bringing some facts of the magnitude of NC’s Medicaid problem to light, Sharon.

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