McCrory right to push Medicaid overhaul

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Gov. Pat McCrory last week sought to breathe new life into his Medicaid overhaul plan that was rejected by the N.C. Senate.

Flanked by about 30 doctors in white coats, McCrory beseeched lawmakers to accept the administration’s plan that was developed by the N.C. Department of Health and Human Services. The budget plan recently passed by the N.C. Senate essentially throws out the governor’s Medicaid reform proposal and seeks to cut costs by reducing eligibility, mostly to the elderly, blind and disabled.

The governor’s plan would establish “accountable care organizations” in which doctors and hospital networks would share in Medicaid savings and cost overruns. Such a model is expected to generate savings of about 3 percent of the Medicaid budget when fully implemented, administration officials estimate.

But Senate Republicans say that is not enough. They favor a plan that would bring in a private, managed-care organization to operate the Medicaid program, which serves 1.8 million people and spends $13 billion, about two-thirds of which comes from the federal government. The state currently faces a $60 million shortfall in the current budget, which cannot be covered with federal funding.

The Senate’s notion to basically contract out the Medicaid system to a private, possibly out-of-state entity has been tried in other states and usually with dismal results. For-profit managed-care organizations find their costs savings by denying services and spending less on reimbursements to medical providers. Their objective is to make a profit, not provide quality health care to people who cannot afford to pay for it themselves.

N.C. House Republicans have been more open to McCrory’s idea than their Senate counterparts and are now crafting their budget plan. But they appear to have little appetite to implement any dramatic Medicaid reforms during the short session this year. In the meantime, McCrory should stand his ground against Senate GOP leaders and continue to push his plan.