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Senate too skeptical of Medicaid costs

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Differences over Medicaid spending continue to stymie state lawmakers’ efforts to reach agreement on a budget for the fiscal year that begins Tuesday.

The N.C. Senate last week rejected the amount Gov. Pat McCrory’s administration has recommended to spend on Medicaid for the upcoming budget year. Members of the Senate Appropriations Committee pressed State Budget Director Art Pope on Thursday to explain why McCrory’s spending is substantially less than the Senate’s to cover remaining expenses from the current fiscal year and those for the next.

The skepticism of Republican senators isn’t difficult to understand. The state’s Medicaid program found itself with a $375 million shortfall near the end of the 2011-12 fiscal year and a $487 million one in 2012-13. Senate GOP leaders can’t be faulted for seeking to avoid encountering another such shortfall next spring.

But the current year’s shortfall has been estimated to be about $130 million, much lower than during the previous two years. And Senate Republicans have had much more of a disagreement with the governor this year over Medicaid beyond spending.

The Senate GOP leadership has advocated a plan – not embraced by McCrory – to basically privatize North Carolina’s Medicaid system by hiring a private and most likely for-profit contractor to administer the Medicaid program. Such an approach has proved to be extremely problematic for the states that have tried it.

That difference in approaches could well be an underlying factor in the Senate’s refusal to accept the viability of McCrory‘s proposed Medicaid spending.