N.C. Senate takes wrong step with Medicaid

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The N.C. Senate last week inexplicably approved a Medicaid reform plan that is all but dead on arrival in the N.C. House and opposed by Gov. Pat McCrory.

The Senate took this action as negotiations between the two chambers remain at a standstill over a budget plan for the fiscal year that began July 1.

The Senate bill aims to partially privatize Medicaid, the state and federally funded program that provides health care coverage for 1.8 million low-
income children, pregnant women, low-income elderly and disabled people.

The Senate plan would allow private, for-profit companies – Managed Care Organizations – to compete with doctor- and hospital-led health plans for state contracts to serve Medicaid patients. The bill also would remove the state Medicaid office from the N.C. Department of Health and Human Services and create a new state agency to manage the $13 billion program.

The Senate’s notion to contract out the Medicaid system to private, possibly out-of-state entities has been tried in other states and usually with dismal results. For-profit managed-care organizations find cost 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, which is the main purpose of the Medicaid program.

That’s probably why the Senate plan has faced strong opposition from doctors and hospital administrators across the state.

The Senate’s Medicaid proposal is not only bad policy, but a futile effort. The House and McCrory are unlikely to ever agree to it, thus setting the stage for more legislative gridlock in Raleigh.