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May 6, 2021

Congress is passing the buck on Medicaid — but not bucks

NC Policy Watch

While it’s still a work in progress, the broad outline of proposed health care reforms is coming into focus in Congress. The measure as currently drafted holds huge ramifications for all Americans, including here in North Carolina. Many of those ramifications come from proposals to change Medicaid from its current form into a block grant program.

According to Rose Hoban of NC Health News, North Carolina’s share of Medicaid spending was a little over $3.5 billion last year, which accounted for a bit more than 16 percent of the state’s $22.3 billion budget. Statewide there are nearly 2 million Medicaid enrollees — about 55 percent are children, and 25 percent are the aged, blind and disabled.

While the sheer numbers weigh heavily toward children, spending on coverage is the reverse. Hoban received figures from the legislative Fiscal Research Division that show the average cost to the state for each child covered is around $250 per month, while spending on ABD (aged, blind and disabled) recipients averages around $1,400 per month.

A Congressional Budget Office analysis shows the American Health Care Act in its present form would slash Medicaid spending by $880 billion over 10 years by phasing out Medicaid expansion and using per capita caps to transform the program into block grants. The CBO estimates enrollment in the program would shrink by 14 million people.

The legislation continues the current Medicaid expansion program as is until the end of 2019, and at that point enrollment would be frozen. It would cover those grandfathered in; those who have a lapse in eligibility wouldn’t be able to re-enroll. The CBO projects “fewer than one-third of those enrolled as of December 31, 2019, would have maintained continuous eligibility two years later. …”

The proposed metric used in the new legislation increases allotments over time, but at a slower rate than the average increase in Medicaid spending. In North Carolina, Medicaid spending rose at rate of about 5 percent a year, some 76 percent overall, between 2000 and 2012.

From the CBO: “With less federal reimbursement for Medicaid, states would need to decide whether to commit more of their own resources to finance the program at current-law levels or whether to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment, or (to the extent feasible) arriving at more efficient methods for delivering services.’’

… Even if you don’t (rely on Medicaid), odds are good that you turn to facilities that at least in part count on Medicaid revenues, and services provides by those facilities could be curbed if revenue falls short.

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