Senators debated a bill Monday night that would reject all aspects of the Affordable Care Act.

The NC Senate released it’s proposal for the state budget late Sunday night.

By Rose Hoban

Senate leaders rolled out their proposed $20.58 billion budget for the coming biennium late Sunday night with a plan that increases overall state spending by 2.3 percent, including increased spending on Medicaid.

But the plan also includes a lot of cuts.

Data courtesy NC General Assembly Fiscal Research Division
Data courtesy NC General Assembly Fiscal Research Division

The proposed budget adds at least $340 million to Medicaid, an increase driven by increased enrollment in the program that provides care for about 1.58 million of the state’s low-income children and their parents, pregnant women, people with disabilities and the elderly.

That accounts for about 3 percent growth in a program that totals $13 billion in state and federal dollars annually.

The bulk of expenses (64 percent of total costs) in the program cover care for poor elderly and people with disabilities. While children and their parents, pregnant women and other small categories of recipients make up about 74 percent of enrollment, they account for just over a third of total costs.

Earlier this month, budget forecasters said they found errors in the way previous administrations forecasted the costs of the program. They said they would change how Medicaid costs are calculated in a way that would probably increase the budget for the program.

Almost $50 million added to the budget is for the so-called “woodwork” effect of new enrollees who have been eligible for Medicaid but have not enrolled to date. That expansion is required by the Affordable Care Act, even though the state chose not to expand the Medicaid program to include people who earn up to 133 percent of the federal poverty level.


The proposed budget also:

  • cuts funding for the AIDS Drug Assistance Program from $8 million to $6 million;
  • closes three state-funded alcohol- and substance abuse-treatment centers, cutting $37 million and restoring $10 million of that to mental health managed care organizations to cover costs for substance-abuse treatment;
  • moves women who earn more than 100 percent of the federal poverty level, that’s $11,490 for one person or $23,550 for a family of four;
  • reduces the maximum number of doctor visits for Medicaid recipients from 22 per year to 10 per year, limits in-home rehabilitation visits to three per year, increases copayment for care and requires prior authorization for all mental health medications;
  • establishes regional rates for hospital care, requiring all hospitals to bill the same for comparable services;
    reduces payments to hospitals for outpatient treatment from 80 percent of reported costs to 70 percent;
  • and closes the Wright School, a 24-bed residential school for children with mental health or behavioral disorders.

“There’s no fix for the group home situation,” said Jennifer Mahan, vice president for governmental affairs for the Autism Society of North Carolina.

Last year, group home providers who care for people with mental health and developmental disabilities pleaded with lawmakers to restore the ability to bill for up to 130 hours of personal care for their residents, including feeding, dressing, bathing, toileting and mobility.

Medicaid Costs

But the budget last year cut those hours to a monthly maximum of 80 hours.

“There is no additional money to figure out how those individuals with developmental disabilities and mental health problems who live in group homes” can continue living in those homes, Mahan said.

Lawmakers had previously created a temporary fix to the situation, but that runs out on June 30.

Mahan also pointed out that the new budget calls for changing the way the state contracts with not-for-profit agencies such as hers to provide services to vulnerable populations.

In the past, not-for-profits received direct state grants to provide services. Mahan said the Autism Society’s $3.2 million grant has included money to provide housing for adults with developmental disabilities, a camp that provides a week of respite for families of children with autism and information and referrals for those families.

In the proposed budget, not-for-profits would submit request for proposals for the work. Mahan said it’s probable that process will take longer than in the past.

Chart courtesy NCGA Fiscal Research Division
All charts courtesy NCGA Fiscal Research Division

“Unless the Department [of Health and Human Services] has a plan to put in an RFP process as soon as possible, I don’t see how they’d be able to get proposals and award funds by July 1,” she said. “There’s no timeframe in the budget and it hasn’t been passed yet.”

Mahan said if contracts were not awarded by July 1, her organization would be forced to lay off workers and keep programs running past the end of the fiscal year without reimbursement.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...