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Cost of Care

House Passes Bill to Cover Medicaid Shortfall

By Rose Hoban

A bill to cover this year’s shortfall for Medicaid easily passed the House of Representatives Thursday, allocating $401 million to cover the budget gap in the program.

In March, Medicaid head Carol Steckel told lawmakers that the shortfall would fall between $70 million and $130 million. Earlier this month, the Department of Health and Human Services announced that gap had grown to about $248 million.

According to House Appropriations Committee chair Rep. Nelson Dollar (R-Apex), that gap is now at about $283 million, with an additional $118 million needed to pay back the federal government for a drug rebate mistakenly drawn down from the federal government in 2009.

This year’s total Medicaid budget is expected to be more than $13 billion.

According to the bill that passed the Appropriations Committee Thursday morning and then on the House floor that afternoon, about $213 million will come from the general fund. Other funds to pay off the shortfall will come from unspent money in the DHHS, excess tax collections and drug-rebate funds in the Medicaid program.

“When Republicans took the majority, we inherited a $600 million gap in Medicaid,” said bill sponsor Rep. Justin Burr (R-Albemarle). “The following year, we reduced that to $375 million. It was the hope that it’d be down to about $150 million, and we would continue to close that. That is what we were expecting.”

“This is more proof that we need to work with the governor as he has proposed to reform Medicaid and control spending,” he said.

Dollar said the governor had brought in private consulting firm Ernst & Young to assist in the forecasting for the program.

Some Democrats pointed out that overruns are to be expected in an entitlement program that is notoriously difficult to forecast.

“Medicaid serves a huge number of citizens in North Carolina with health care,” said Rep. Joe Sam Queen (D-Waynesville). “It is a $13 billion program, and it will have forecasting issues.

“We saw on the forecasting of hurricanes how many different paths a hurricane can take. In an economy as big as North Carolina’s, when we have unemployment that’s a point and a half higher than the national average, when you have issues of health – whether it’s a flu epidemic in the previous year or the uptake of the Medicaid services – it’s hard to be precise.”

Queen noted that North Carolina’s Medicaid program has had the slowest year-over-year growth in the country for most of the past five years.

“It’s hard to make accurate predictions on it, and you’re going to have shortfalls,” said Rep. Mickey Michaux (D-Durham). “Every state in the union will have a shortfall; it varies depending on the size of their program.”

The bill passed with only one dissenting vote.

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