NC Senate plan for ’13-’14 budget heavy on Medicaid spending

  • Posted: Tuesday, May 21, 2013 1:05 a.m.

RALEIGH (AP) — Senate Republicans said Monday their two-year budget proposal demonstrates how Medicaid keeps siphoning away money from other priorities, but critics assert that the GOP spending plan keeps taking from the needy and the middle class.

The proposal for state government spending through mid-2015 sets aside $1.2 billion over those two years for additional costs of Medicaid, the federal-state health insurance plan for 1.5 million poor and disabled North Carolina residents.

The state agency running Medicaid would receive $370 million more for the fiscal year starting July 1 compared to the current year’s authorized spending of more than $3.1 billion. The increase comprises nearly all of the 2.3 percent overall spending increase proposed in the $20.6 billion plan for next year, said Sen. Pete Brunstetter, one of the chamber’s chief budget-writers.

The higher Medicaid spending comes even as the Republican-led legislature has rejected expanding Medicaid to cover an estimated 500,000 uninsured people in the state, as allowed by the federal health care overhaul. The federal government would fully fund expanded coverage for the first few years, with its share later dropping to 90 percent. Still, Republicans say the state can’t afford for now its share of the costs in later years.

Brunstetter said higher-than-expected Medicaid costs this year also caused Republicans to scale back other initiatives and contributed to them offering no pay raises this coming year for teachers and state employees. Republican Gov. Pat McCrory’s budget sought a 1 percent pay increase.

“All of these things that we talk about that we want to do in education, justice and public safety and the environment, they’re all running right into the Medicaid juggernaut and we’ve just got to get it fixed,” Brunstetter, R-Forsyth, told reporters.

The bill does reduce some provider rates, attempts to encourage cost savings and efficiencies and directs McCrory’s administration to come up with a Medicaid overhaul proposal for legislators to consider by early next year.

Even without the Medicaid expansion, the budget envisions spending another $50 million next year for almost 70,000 new Medicaid recipients who are expected to enroll after learning about the Affordable Care Act but qualifying under current eligibility rules.

The budget, which the chamber is expected to vote on later this week, includes several public education initiatives previously sought by Republicans, including Senate leader Phil Berger’s effort to eliminate tenure for public school teachers.

The proposal also attempts to rework several environmental and rural economic development programs, many of which had been championed over the years by Democrats when they were in charge. The Clean Water Management Trust Fund, which was a favorite of former Senate leader Marc Basnight, D-Dare, would be merged with another trust fund for land and water conservation projects.

The largest casualty in rural matters could be the private nonprofit North Carolina Economic Development Center, which provides grants to rural areas for infrastructure and other job-creation needs. The center would lose all $16.6 million it receives from the state annually, with the proceeds going to two new state panels instead.

Center director Billy Ray Hall said in a statement the budget “seeks to abolish the one organization dedicated exclusively to delivering a full range of financial resources and technical assistance to rural communities.” The budget also would eliminate all of the regional economic development organizations, replacing them with Commerce Department employees within a new rural economic development division.

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