Health care for NC’s needy is being rocked by cuts and change

A state’s most pressing responsibility — and its largest financial obligation — is to care for those who are poor and sick or disabled. But these days, the state is struggling to meet that responsibility.

It begins, of course, with the refusal by state Republican lawmakers to expand Medicaid. By doing what 36 other states have done, North Carolina could provide health insurance for hundreds of thousands of low-income people whose only recourse for health care is the emergency room.

Medicaid expansion is at the center of the impasse over the state budget. Gov. Roy Cooper, a Democrat, wants it. Senate leader Phil Berger, a Rockingham County Republican, says it won’t happen on his watch.

Beyond the standoff are other issues of how the state is managing and funding Medicaid, a program that covers 2.1 million people, or nearly one in every five North Carolinians. The state is embarked on converting Medicaid from a program directly operated by the state on a fee-for-service basis to one contracted out to private providers known as managed care organizations, or MCOs.

Making the conversion — a popular choice among states — was one of the Republicans’ first priorities after they took control of the General Assembly in 2011, with Medicaid costs surging as a result of the Great Recession. The conversion may steady costs, but it could also lead to a reduction in medical care as MCOs try to keep costs within their contracts.

Meanwhile, in the near term, the state budget passed by the Republican majority — and vetoed by Cooper — is creating headaches for the department that administers the Medicaid program, the Department of Health and Human Services. Anticipating savings from the program’s conversion that may be years away, Republican budget writers cut $42 million in recurring funds that support the management of DHHS programs.

The budget also reduces the state share of Medicaid spending by $66 million, which blocks the state from drawing down $132 million in federal matching dollars.

DHHS Secretary Mandy Cohen was blindsided by the management cut — the largest reduction in recurring dollars in the department’s history — and is urgently appealing to Republican budget writers to reconsider. If the management cut isn’t restored, Cohen said it could have serious consequences for the department’s operation.

The prospect for restoring the cut doesn’t look good. Sen. Harry Brown, co-chairman of the Senate Appropriations Committee, said in a statement: “The state is shifting its Medicaid program to managed care where prepaid health plans will administer the program. So the conference report reduces administrative costs in the Department.” Brown noted that the administrative cuts won’t take full effect until the next two-year state budget, but Cohen said Medicaid’s conversion will likely need more DHHS management support — not less — in the first few years.

Along with the complications with Medicaid, there’s the surprising proposal in the state budget to move DHHS’s headquarters from Raleigh to rural Granville County. Cohen said the move would make it hard to recruit doctors, architects, engineers and other specially trained workers who prefer to work in an urban county.

Cohen is telling her Raleigh employees not to think about the move, but “It’s hard to keep people focused on the work. It is something that’s really hurting morale.”

And, collectively, all these developments could hurt those most in need of state-supported health care.

Barnett: 919-829-4512, nbarnett@newsobserver.com